Central and Eastern Europe – a rising market for water industry business

Central and Eastern European accession countries are providing good opportunities for water and wastewater treatment for companies faced with a maturing western European market, with Bulgaria, for example, required to spend €4.1 billion on replacing half of its water supply network.

So says international market research company Frost and Sullivan’s Industry Analyst for the water sector in Europe, Matthew Barker. Desires for accession to the European Union are playing a major role in driving the region’s water infrastructure towards higher standards, he says.

“Most of the countries in Central and Eastern Europe have been left with the legacy of a seriously damaged environment and unwisely spent natural resources from the days of old Regimes,” says Barker. “Until 1989, the emphasis was on the development of heavy industry, the use of outdated and highly polluting technology and low efficiency in the use of energy and raw materials.”

Water losses from pipelines in Bulgaria, for instance, are currently standing at 60%, well above the EU average of 15%. The situation may result in a need to increase water prices by up to 80% for modernisation to occur within 15 years, says Barker.

The money for the Bulgarian up-grade is expected to come from two Japanese banks, with €50 million being sought from the European Union’s Structural Policies for Pre-Accession (ISPA) funding scheme. The German water supply and sewerage company Berliner Wasserbetriebe (BWB) will be co-financing a €14 million wastewater treatment facility in the northeast of the country.

Romania is in a similar situation, with an estimated €300 million required to bring Bucharest’s wastewater infrastructure up to EU standards. Three-quarters of the money is expected to come from a non-reimbursable EU loan, and the rest to be covered by public funds.

The main problems for countries in the region are in gaining the necessary funding; implementing the large number of pieces of EU legislation; enabling the enforcement of legislation; and revising national water and wastewater management legislation for EU harmonisation, says Barker.

Enforcing environmental legislation, in particular, is a key problem for the region, Barker told edie. This is because the countries have higher priorities, particularly with building up their economies, and because there are not the structures in place for enforcement.

However, it is not all doom and gloom as the region heads towards the first 2004 targets for accession. Poland, Slovenia and Slovakia, in particular, have all implemented environmental law pretty well, says Barker.

Edie recently reported on investment opportunities for all sectors of the environment industry in the Baltic states of Latvia, Lithuania and Estonia (see related story). And last year we reported on opportunities in Poland (see related story).

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