Paris, January 9, 2008 - The International Financial Corporation (IFC), the private sector arm of the World Bank Group, and PROPARCO, the subsidiary of Agence Française de Développement (AFD) in charge of financing private investments in developing countries, acquired a shareholding in Veolia Water Africa, Middle East and India (Veolia Water AMI).

This Veolia Water subsidiary operates water, wastewater and electricity services in Africa, the Middle East and the Indian subcontinent. The aim of the transaction is to support infrastructure development in these world regions.

The shareholding was acquired under a capital increase. IFC and PROPARCO took 13.89% and 5.56% respectively of the capital stock of Veolia Water AMI.

IFC's investment comes in the form of €25 million in capital stock and a loan facility of €35 million. Veolia Water AMI intends to allocate this holding to its share capital and to the financing of its program to extend infrastructure and supply services through its local subsidiaries.

Proparco is investing €10 million to encourage the development of Veolia Water AMI projects to provide access to water, sanitation and electricity throughout the regions where it operates.

"The IFC will play a major role in supporting Veolia Water AMI's projects in these regions,"

said Raschad Kaldany, head of the IFC's infrastructure department.

"There are enormous needs to be met and access to local financing is primordial to obtaining permanent investments in water infrastructure."

In some countries, non-existent or outdated infrastructure is the main component in the problem of providing people with water and electricity and holds back their social, environmental and economic development.

"Veolia Water AMI's business enables governments to modernize their infrastructure and face up to the challenges of population growth and urban concentration. By helping people have access to water, sanitation and electricity in the countries where we work, we are supporting the United Nations' Millennium Development Goals,"

said Antoine Frerot, Chief Executive Officer of Veolia Water.

In Gabon, for example, the percentage of the population with access to water increased from 68% to 85% between 1999 and 2004 according to the WHO. Behind the figures are thousands of families who now have access to safe drinking water.

"Access to water and the environment in Africa constitutes a strategic priority for the AFD Group. By initiating this partnership with Veolia Water AMI, PROPARCO acts in favour of economic growth in a region that has been too neglected, while meeting the social objectives that were set and promoting French expertise and partnerships with other sponsors. Veolia Water AMI can play a major role in facilitating access to drinking water and clean environment to a great number of African people. PROPARCO is there to support this,"

said Luc Rigouzzo, Managing Director of PROPARCO.

International Finance Corporation

The International Finance Corporation, the private sector arm of the World Bank Group, is the largest multilateral provider of financing for private enterprise in developing countries. IFC finances private sector investments, mobilizes capital in international financial markets, facilitates trade, helps clients improve social and environmental sustainability, and provides technical assistance and advice to businesses and governments. From its founding in 1956 through financial year 2006, IFC has committed more than $56 billion of its own funds for private sector investments in the developing world and mobilized an additional $25 billion in syndications for 3,531 companies in 140 developing countries. With the support of funding from donors, it has also provided more than $1 billion in technical assistance and advisory services.

Between 1990 and 2006, IFC financed 568 investment projects in Africa for a total of $4.5 billion. IFC invests in private businesses across sectors. In Africa its committed portfolio includes mining industries (28%), financial institutions (25%), infrastructure (16%), and manufacturing and services (16%). For more information, visit www.ifc.org, www.ifc.org/africa.

PROPARCO

Proparco is a subsidiary of Agence Française de Développement (AFD) and a member of the European Development Finance Institutions (EDFI). Its aim is at finance private investments in developing countries to promote economic growth, sustainable development and the achievement of the Millennium Development Goals (Proparco's committed investments totaled €370 million in 2005). Proparco's public/private shareholding structure and its specificities as compared to other EDFIs offer innovative solutions to meet the investment gaps in developing and emerging countries. Proparco offers a wide range of financial products: equity (from €0.5 M to €20 M per project); medium- and long-term loans (from €2 M to €100 M per project) ; and loan guarantees (from €2 M to €100 M per project). Proparco also offers access to products and capacity building services from its parent company, AFD.

Veolia Water

Veolia Water, the water division of Veolia Environnement, is the world leader in water and wastewater services. Specialized in outsourcing services for municipal authorities, as well as industrial and service companies, it is also one of the world's major designers of technological solutions and constructor of facilities needed in water and wastewater services. Veolia Water serves 108 million people worldwide. With 77,800 employees, its 2006 revenues amounted to €10,1 billion. Veolia Water AMI (Africa, Middle East and the Indian sub-Continent) serves 8,5 million inhabitants in more than 9 countries and has invested more than €110 million in 2006 in these regions.

Veolia Environnement (Paris Euronext: VIE and NYSE: VE) is world leader in environmental services. With more than 300,000 employees the company has operations all around the world and provides tailored solutions to meet the needs of municipal and industrial customers in four complementary segments: water management, waste management, energy management and freight and passenger transportation. Veolia Environnement recorded revenue of €28.6 billion in 2006. www.veolia.com

Caroline Clopet

Tel. + 33 (0)1 49 24 32 74
caroline.clopet@veoliaeau.fr

Marie-Claire Camus

Tel. + 33 (0)1 71 75 06 08
marie-claire.camus@veolia.com