IFC, Proparco invest in Veolia Water Africa, Middle East and India
The International Financial Corporation (IFC), the private sector arm of the World Bank Group, and Proparco, the subsidiary of Agence Française de Développement (AFD) in charge of financing private investments in developing countries, acquired a shareholding in Veolia Water Africa, Middle East and India (Veolia Water AMI). This Veolia Water subsidiary operates water, wastewater and electricity services in Africa, the Middle East and the Indian subcontinent...
• Transaction aims to support infrastructure development in these regions
PARIS, Jan. 9, 2008 -- The International Financial Corporation (IFC), the private sector arm of the World Bank Group, and Proparco, the subsidiary of Agence Française de Développement (AFD) in charge of financing private investments in developing countries, acquired a shareholding in Veolia Water Africa, Middle East and India (Veolia Water AMI).
This Veolia Water subsidiary operates water, wastewater and electricity services in Africa, the Middle East and the Indian subcontinent. The aim of the transaction is to support infrastructure development in these world regions.
The shareholding was acquired under a capital increase. IFC and Proparco took 13.89% and 5.56% respectively of the capital stock of Veolia Water AMI.
IFC's investment comes in the form of €25 million in capital stock and a loan facility of €35 million. Veolia Water AMI intends to allocate this holding to its share capital and to the financing of its program to extend infrastructure and supply services through its local subsidiaries.
Proparco is investing €10 million to encourage the development of Veolia Water AMI projects to provide access to water, sanitation and electricity throughout the regions where it operates.
"The IFC will play a major role in supporting Veolia Water AMI's projects in these regions," said Raschad Kaldany, head of the IFC's infrastructure department. "There are enormous needs to be met and access to local financing is primordial to obtaining permanent investments in water infrastructure."
In some countries, non-existent or outdated infrastructure is the main component in the problem of providing people with water and electricity and holds back their social, environmental and economic development.
"Veolia Water AMI's business enables governments to modernize their infrastructure and face up to the challenges of population growth and urban concentration. By helping people have access to water, sanitation and electricity in the countries where we work, we are supporting the United Nations' Millennium Development Goals," said Antoine Frerot, Chief Executive Officer of Veolia Water.
In Gabon, for example, the percentage of the population with access to water increased from 68% to 85% between 1999 and 2004 according to the WHO. Behind the figures are thousands of families who now have access to safe drinking water.
"Access to water and the environment in Africa constitutes a strategic priority for the AFD Group. By initiating this partnership with Veolia Water AMI, Proparco acts in favour of economic growth in a region that has been too neglected, while meeting the social objectives that were set and promoting French expertise and partnerships with other sponsors. Veolia Water AMI can play a major role in facilitating access to drinking water and clean environment to a great number of African people. Proparco is there to support this," said Luc Rigouzzo, Managing Director of Proparco.
The International Finance Corporation, the private sector arm of the World Bank Group, is the largest multilateral provider of financing for private enterprise in developing countries.In Africa its committed portfolio includes mining industries (28%), financial institutions (25%), infrastructure (16%), and manufacturing and services (16%).
Proparco is a subsidiary of Agence Française de Développement (AFD) and a member of the European Development Finance Institutions (EDFI). Its aim is at finance private investments in developing countries to promote economic growth, sustainable development and the achievement of the Millennium Development Goals.
Veolia Water, the water division of Veolia Environnement, is a world leader in water and wastewater services. Veolia Water AMI (Africa, Middle East and the Indian sub-Continent) serves 8,5 million inhabitants in more than 9 countries and has invested more than €110 million in 2006 in these regions.