EU supports modernisation of water infrastructure in the Czech Ústí nad Labem Region with € 14 million grant and € 56 million EIB loan under the Just Transition Mechanism

The European Union supports a major investment in water infrastructure in the Ústí nad Labem Region in north-western Czechia to enhance the local water management systems. The project, with an estimated budget of € 77 million, receives support under the Public Sector Loan Facility (PSLF), combining an EU grant of €14 million with a €56 million loan from the European Investment Bank (EIB).

Severočeská vodárenská společnost, the Czech water utility company, implements the project, which focuses on modernising water infrastructure in a region undergoing a structural transformation as it moves away from its historical reliance on mining and heavy coal-based industry.

The project includes a comprehensive set of upgrades across the regional water system, including the reconstruction of water treatment plants and wastewater treatment facilities, upgrades to water distribution infrastructure, modernisation of water mains and storage reservoirs, and the elimination of untreated sewer outfalls.

The project will deliver significant social benefits by improving access to safe drinking water for approximately 300 000 inhabitants. It will strengthen public health protection through better water quality and more reliable water services.

The investment also supports the long-term economic transformation of the Ústí nad Labem coal region, contributing to a more sustainable and resilient economic model. It will improve the efficiency of water services, reduce water losses, and strengthen the overall performance of the regional water network.

In addition, the project will bring significant environmental benefits by optimising wastewater treatment processes and eliminating untreated sewer outfalls, thereby reducing pollution in local watercourses. The intervention will deliver benefits for the Bílý Potok Brook and Elbe River catchments in the Ústí nad Labem Region, improving ecological conditions and biodiversity. As these waterways also supply drinking water to Dresden in Germany, the project will generate important cross-border environmental benefits. Furthermore, the project will contribute to climate mitigation, with estimated CO₂ emissions savings of approximately 1,300 tonnes per year, equivalent to removing around 300 cars from the road annually or offsetting the annual carbon footprint of approximately 280 EU residents.

Bronislav Špičák, CEO of Severočeská vodárenská společnost (SVS), stated:

"Thanks to the secured funding, we will be able to take better care of our water infrastructure, introduce modern technologies, and, last but not least, adapt our processes to meet increasingly strict legislation and the new challenges facing the water sector. This includes improving the energy efficiency of water operations, the necessary reinforcement of both cyber and physical security, as well as requirements for responsible water management and climate change adaptation."

Emma Toledano, Deputy Director-General for Programme Implementation at the European Commission's DG REGIO, added:

"Supporting regions most affected by the climate transition is at the heart of the European Commission's commitment to a fair transition for all. We are proud to support this important project in the Ústí nad Labem Region through the Public Sector Loan Facility to modernise essential water infrastructure, improving the quality of life for local communities and the protection of the environment. It shows how EU cohesion policy is helping such regions build a more resilient and sustainable future together with the support from the Just Transition Fund and the PSLF in the Czech Republic, including in sustainable transport, urban infrastructure and the Ostrava concert hall."

Paloma Aba Garrote, Director of CINEA, said:

"The project is an excellent example of how EU support can contribute to strengthening regional water services and delivering lasting benefits for citizens, the environment and the local economy. By investing in resilient water infrastructure, the project will improve water safety and security, protect the environment and support the region's transition towards a more sustainable future."

EIB Vice President Marek Mora said:

"The Ústí nad Labem Region is a long-standing EIB partner. We are already working with the region on its urban revitalization. This new €56 million loan builds on that cooperation and will help modernise the region's water treatment infrastructure, making it safer, more reliable, and ready for the future. Cohesion is at the core of the EIB's mission for just transition across Europe. We help regions invest in modern infrastructure, strengthen competitiveness, and improve quality of life for their citizens. Reliable water and wastewater systems are a key part of that effort."

Background information

The Public Sector Loan Facility (PSLF) was established by the European Union as one of the three pillars of the Just Transition Mechanism (JTM) to ensure that the transition towards climate neutrality leaves no region behind. By supporting investments in territories facing the most transition challenges, the PSLF contributes to a fair transition for all, while strengthening competitiveness.

The PSLF supports public and public-mandated entities in implementing investments that address the social, economic and environmental impacts of the climate transition in the most affected EU regions. It combines loans from the European Investment Bank (EIB) with grants from the European Commission, enabling projects aligned with the Territorial Just Transition Plans (TJTPs) prepared by EU Member States.

The first call for proposals, organised around ten intermediate cut-off dates and implemented based on national allocations, was open from 19 July 2022 to 31 December 2025. Read about its results in the CINEA article on Advancing the Just Transition in Europe: Results of the first PSLF call for proposals - European Climate, Infrastructure and Environment Executive Agency

Building on the first call, a second call for proposals was launched on 23 October 2025. The call is open to all EU Member States on a competitive basis, without pre-allocated national shares.

The implementation of PSLF has been entrusted by DG REGIO to CINEA.

DG REGIO

The Directorate-General for Regional and Urban Policy (DG REGIO) is the department of the European Commission responsible for EU policies on regions and cities. It develops and carries out the Commission's policies on regional and urban policy. It assists the economic and social development of the developed and less developed regions across the European Union.

CINEA

The European Climate, Infrastructure and Environment Executive Agency (CINEA) is an Executive Agency established by the European Commission to implement parts of EU funding programmes for transport, energy, climate action, environment and maritime fisheries and aquaculture. CINEA aims to assist its beneficiaries, establish strong partnerships, deliver high-quality programme and project management, foster effective knowledge sharing and create synergies between programmes - to support a sustainable, connected, and decarbonised Europe.

EIB

The European Investment Bank (EIB) Group is the financing arm of the European Union, owned by the 27 Member States, and one of the largest multilateral development banks in the world. In 2025, the EIB Group signed €100 billion in new financing and advisory services for over 870 high-impact projects under eight core priorities that support EU policy objectives: climate action and the environment, digitalisation and technological innovation, security and defence, territorial cohesion, agriculture and the bioeconomy, social infrastructure, strong global partnerships and the savings and investments union. Beyond long-term loans for large infrastructure, the EIB Group crowds in private investment for high-risk innovative projects and businesses, with a growing role in Europe's markets for venture debt, venture capital, guarantees and securitisations.

SEVEROČESKÁ VODÁRENSKÁ SPOLEČNOST

Severočeská vodárenská společnost a.s. (SVS) is the largest water utility company in the Czech Republic in terms of the volume of assets under its management. Among other things, it ensures wastewater collection and treatment, primarily for the residents of the Ústí and Liberec regions. On behalf of its shareholders-458 North Bohemian cities and municipalities-it has assumed responsibility for supplying the population with drinking water and for the collection and disposal of municipal wastewater. SVS is the 100% owner of the operating company Severočeské vodovody a kanalizace, a.s. As a result, the municipalities and cities of the North Bohemian region have had full control over their water supply and related utility operations since 2019.