Danilovgrad municipal infrastructure, financial and operational performance improvement programme

The Municipality of Danilovgrad (the "Municipality") is located in the valley of the Zeta River in central Montenegro, 16 kilometres northwest from the capital of Podgorica and 40 kilometres from Niksic, the second largest town in Montenegro. Danilovgrad town is the centre of Danilovgrad Municipality (population of 16,523).

The Municipality has been recognised by foreign and domestic companies as a good place for investments due to pro-business attitude of the local government management, cheap land, low municipal fees and proximity of Podgorica, which is the business and administrative centre of Montenegro. The Government of Montenegro will sign a loan with the European Bank for Reconstruction and Development (the "EBRD" or the "Bank") in an amount up to EUR 5.35 million. This loan will enable Public Utility Company Danilovgrad, ("PUC" or the "Company"), which is fully owned by the Municipality, to finance improvements in their water supply infrastructure and the development of wastewater collection and treatment in Danilovgrad.
While the Company is managed adequately, a number of operational problems persist: (i) high levels of technical losses due to prolonged under investment in the water supply infrastructure. (ii) high energy and maintenance costs of the water supply due to the poor physical condition of the water supply pipes. (iii) urgent need for rehabilitation of the water supply and construction of wastewater collection and treatment facilities.     
          
Technical Assistance for the development and implementation of a Financial and Operational Performance Improvement Programme ("FOPIP") will achieve the transition objectives of the Project and enhance commercial viability and administrative and managerial capacities of the Company.
Since the existing company will be split into two new companies : 1) water and wastewater company and 2) solid waste and other utility services by mid 2011, the Consultancy support will be provided to Water and wastewater company. The overall objective of the Assignment is to improve the Company’s operational efficiency and financial management in order to improve and strengthen its capacity to provide high quality water and sewerage services.

News source: EBRD link: article