The deal for the sale of several European water supply and treatment businesses from United Utilities, including Bulgaria's Sofijska Voda, to France's Veolia Environnement, has been finalized.
Veolia, the world's biggest listed water company, unveiled the deal, with an enterprise value of about EUR 199 M in June. United Utilities sale of non-regulated businesses included subsidiary United Utilities Australia and investments in the UK, the Philippines, Bulgaria and Poland.
The French utility will take a 77.1% stake in Sofiyska Voda, the company operating water supply and treatment services for the city of Sofia in Bulgaria, which serves 1.3 million inhabitants. The acquired stake includes the share of the European Bank for Reconstruction and Development.
The company plans to invest BGN 240 M by 2013, BGN 50 M of which come from a loan from the European Bank for Reconstruction and Development.
The concessioner invested last year BGN 52 M in an upgrade of no more than 1% of the sewage system.
More than twenty years after the fall of the communist regime, Bulgaria's water sector remains one of the least reformed systems in the country.
Except for Sofia municipal water supply, which has been granted on concession to a foreign investor, all other units in the sector are either owned by the state or the municipalities.
The company in Sofia however has been harshly criticized for shortage of investments in the upgrade and maintenance of the system.
An average 60% of water pumped in the pipes never reaches Sofia consumers, while in some regions losses account for up to 90 %.