DUSHANBE, May 21, Asia-Plus  -- Based on successful experience with implementation of Phase I, the European Bank for Reconstruction and Development (EBRD) is providing a new Euro 1.5 million loan to further improve the water supply infrastructure and distribution network in Khujand, Tajikistan’s second-largest city.

According to the EBRD Dushanbe Office, the financing is part of a larger investment package which includes a Euro 3.5 million grant from the Swiss Government and a Euro 1.365 million technical cooperation grant from the EBRD’s Early Transition Countries Fund and Switzerland.

The loan, backed by a sovereign guarantee, will improve Khujand’s drinking water by installing new equipment - including more water meters to cover the whole city - that should reduce water leakages and generally make the water supply more reliable. A “stakeholder-participation program” will encourage greater public participation and ensure that poverty and subsistence issues are reflected in tariff reforms.

Khujand is located in north-west Tajikistan and has about 150,000 inhabitants. The city is situated at the mouth of the fertile Ferghana valley, a region in Central Asia spreading across eastern Uzbekistan, Kyrgyzstan and Tajikistan.

Jean-Patrick Marquet, EBRD Director for Municipal and Environmental Infrastructure, said the loan will support Tajikistan at a crucial time when the country is intensifying its efforts to achieve continuous and sustainable growth. “Infrastructure improvements and dependable supplies of essentials such as water or electricity are key to achieving this goal”, he added.

To date, the EBRD has invested in more than 30 projects in Tajikistan with a total value of more than Euro 100 million.  Support for infrastructure development is one of the Bank''s priorities in the country. A first loan to Khujand was provided in July 2004.