AS Tallinna Vesi concluded a 313 million kroons (20m EUR) loan agreement


AS Tallinna Vesi has concluded a 313 million kroons (equal to 20m EUR), 10-year
maturity loan agreement with the Nordic Investment Bank on 9 April. 

Negotiations for this loan started in June 2008. AS Tallinna Vesi's Chairman of
the Management Board Ian Plenderleith said: “Given the current market
conditions these have been challenging discussions but we are pleased to
successfully agree this new loan facility.” 

Securing this loan will enable AS Tallinna Vesi to complete the network
extensions programme for 2008-2010. „The investments will significantly 
improve Tallinners' access to clean drinking water and modern wastewater
disposal services  by connecting approximately 3,500 households to the Tallinn
water and sewerage system,” added Plenderleith. 

The necessity for this additional loan resources was triggered by the extensive
3-year network expansion program, the costs of which will be compensated to the
company over a period of ten years. „When defining our loan requirements we
carefully planned this large investment program and long term cash influence
into our business plan to establish this solution,“ said Ian Plenderleith. 

The network extension program was agreed upon with the City Government of
Tallinn in 2001, stating that AS Tallinna Vesi would construct the network
extension as per funding granted annually by the Tallinn City Government. To
make the process and procurements more effective the parties agreed to a 3 year
construction program at the end of 2007. AS Tallinna Vesi shall complete the
network extension program by March 2011, assuming all risks and liabilities
related to construction and funding. The Company will receive the compensations
for the network extension program over a course of ten years between 2008 and
2017. 


Building new sewage pipes will decrease the risk of pollutants flowing into
surrounding water sources and will also facilitate proper treatment of the
wastewater, as the sewage that previously flowed to small septic tanks will now
be transported straight to a treatment plant. “Continuous investments to water
pipes constructions and reconstructions will help to further improve water
quality and reduce leakages,” added Plenderleith who stressed that water
quality indicators in Tallinn already exceed the requirements established by
the European Union. Drinking water quality in Tallinn currently meets 98% of
requirements, compared to a standard of 95% and the leakages level has been
reduced to 18% against a target of 26%. 

Priit Koff
Head of Communication
AS Tallinna Vesi
6262 209
priit.koff@tvesi.ee