Public banks and the remunicipalization of water services in Paris

ABSTRACT

We investigate the role of public banks in the remunicipalization process in Paris, France, in addressing the financial needs of the new public municipal water company, Eau de Paris (EDP). We find that EDP has, until recently, eschewed reliance on debt financing, which explains the peripheral role of public banks in the transition from private to public. We emphasize that the financial ecosystem for water utilities established by the water basin agencies in France accounts for a reduced need to borrow from credit institutions, but that declining water consumption and climate change are making debt financing necessary.

KEYWORDS:

• Paris
• public management
• private sector
• public banks
• water supply

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

1. Source: AESN, https://www.eau-seine-normandie.fr/.

2. Source: EIB, https://www.eib.org/fr/index.htm/.

3. Source: CDC, https://www.caissedesdepots.fr/.

4. Source: CDC, https://www.caissedesdepots.fr/.

5. According to data collected by the Office Français de la Biodiversité. The greater increase of wastewater prices (relative to drinking water prices) is in line with national trends and reflects, among other criteria, higher taxes and more stringent regulations.

6. This followed a previous €263 million five-year investment plan launched by one of EDP’s predecessor entities, the SAGEP, in 2007.

7. For information, the regional audit committee mostly explained this superior performance by the ‘gravitational’ nature of the network infrastructure, which lowers exposure of the network to leakage risks (Chambre Régionale des Comptes d’Île de France, 2014).