IRRIGATION

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PÚBLICOS DEL AGUA FCC AQUALIA

AN INTERNATIONAL CASE STUDY

Mark Muller

Aqualia New Europe.

ACLIMA JANUARY 2014

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1.Aqualia’s International Strategy

2.EBRD

3.ANE; The Vehicle

4.The Reform Cycle

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Aqualia’s International Strategy

1

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Global Implementation Today

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(Moravia-Silesia)

Caltanissetta

Abrantes

Elvas

Campomaior

Cartaxo

Fundao

Bruntal

aqualia in Europe

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Mission (del Plan de Comunicación)

European Bank for Reconstruction and

Development (EBRD)

2

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What is it?

International Financial institution established in 1991 and headquartered in London,

Working in 34 Countries from Central Europe to Central Asia,

Owned by 63 countries and 2 intergovernmental institutions (EU and EIB),

Capital Base € 35 bn. Spain’s share in EBRD Capital is 3.4%,

AAA Rating,

Largest single investor in the Region: It has invested €79 bn. in 3.600 project since 1991.

EBRD

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Where does it operate?

EBRD

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What sectors?

Agribusiness

Climate Finance

Equity Funds

Financial Institutions

Legal Reforms

Manufacturing and services

EBRD

Municipal Infrastructure

Natural Resources

Nuclear Safety

Power and Energy

Property and Tourism

ICT

Transport

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Position

ANE: THE VEHICLE

3

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ANE

A 63 m.€ Equity Joint Venture between Aqualia & EBRD

(European Bank for Reconstruction and Development) .

ANE B.V is based in Holland, managed from Aqualia’s HQ Office

(Madrid).

ANE’s operates with a Private Equity approach, where Aqualia is

both Manager and Sponsor, and EBRD acts as a Financial Partner.

ANE’s Time-frame: 10 Years lifespan (4 Years investment period,

4-6 Year Maturity, exit strategy EBRD)

Scope: Invest in Sub-Projects in the Water & Wastewater sector.

Sub-Project type of operations:

• Management: Concession Tenders, Acquisitions

• Project Finance: BOT’s & Industrial projects.

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ANE

Recent Activity:

We have created a Joint Venture with Romania’s largest

regional operator, to participate in 3 projects in RO, MD and

BG…,

We are going to make a €13,3m. purchase in Orasqualia.

We are negotiating with Danone Unimilk ( Russia) to build

them 9 WWTP Plants,

We are negotiating with ViK Dobrich an overhaul of their

water meter park, metering processes, commercial cycle.

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Position

THE REFORM CYCLE

4

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The Reform Cycle

• Improve Sector Governance

• Price Water Correctly

• Improve Public Expenditure

• Deliver Services more Efficiently

- Reduce OPEX

- Increase Revenue

- Strategic Planning

- Budget Execution

- Subsidy Targeting

Transparency

Independence

Accountability

Procurement

- Internalize Externalities

- Keep up with Inflation

- Conservation

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ROLE OF SERVICE PROVIDER

The Water Manager early morning Blues….

o If I increase the pressure on the network, I

will get so many burst pipes I will be front

news in national TV!

o This month I will be able to pay wages, just!,

but for sure I won’t pay the electricity bill,

o The Major just called me: I have to hire 50

new people or start looking for a job in

Antarctica…

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ROLE OF SERVICE PROVIDER

How can a SP improve a Water System?

Removing technical inefficiencies

NRW is not a country, it’s our biggest

nightmare…

Improving Management inefficiencies

Metering, Billing, Collecting, Asset

Management, Education, Leadership….

Choose the right Technology

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Sound Sector Governance; political stability, rule of law,

regulatory quality, quality servive provision.

Identifying all Actors involved and indicate their roles in;

policy formulation,

asset management & infraestructure development,

service provision,

financing the sector,

regulation of the service.

Clear Procurement policies

COMMON ROLES FOR THE SECTOR

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A Private Service Operator can help bring Private Finance

to bridge the financial gap left by Public Expenditure and

Donors,

It can help bringing new Management culture,

It can bring the adequate Technology to a Company,

A Private Service Operator is a Flexible, Efficiency and

Benefit driven Organization,

By implementing a Cost Recovery Focus mentality,

it helps Governments and Regulators establish sustainable

Water systems and Infrastructure.

CONCLUSIONS

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Thank you!