WASHINGTON, June 30, 2000 - The World Bank today approved a US$12 million equivalent credit for the Mostar Water Supply and Sanitation Project in Bosnia and Herzegovina.
Prior to the war, a single Mostar Water Supply and Sewerage utility served the entire city of Mostar. As a result of the war, the utility was split into two parts: the Eastern Utility serving the Bosniac part of the city and the Western Utility serving the Croat part. The division of the utility and war damage resulted in substantial inefficiencies in management and operations. The project seeks to support a series of measures allowing for incremental improvement of the management and performance of the utility, which has now been reunified.
The project will establish a modern planning and management system, carry out major improvements in financial management and bill collection, and rehabilitate the water and sewerage network. The project will use the following components to achieve this:
· Priority Investments for Water Supply Rehabilitation and Improvement-high priority investments that are economically justified and already prepared such as security of the supply and protection zone for four of the five existing water sources and purchase of computers and related equipment in support of project implementation.
- Water Distribution Network Rehabilitation and Improvement Fund-least-cost priority investments for source and consumption metering, leak detection and repair, network rehabilitation and optimization, pressure zoning, and equipment for operations.
- Sewerage Network Rehabilitation Fund-urgent rehabilitation and repair of selected sewers and sewer maintenance equipment and pipe replacement.
- Institutional Strengthening Fund-equipment and materials, software, office, and computer equipment in support of institutional strengthening and capacity building program, and training of Mostar Water Supply and Sewerage personnel.
- Technical Advisory/Engineering Services-assistance to the Water Supply and Sewerage Utility in the identification, planning, design, and implementation of programs.
The total cost of the project is US$13.38 million, including US$1.38 million from counterpart funding.
The credit will be disbursed on standard IDA terms and will be repayable in 35 years, including a 10 year grace period. Since Bosnia and Herzegovina joined the Bank in 1996, commitments to the country total US$735.2 million for 33 projects.