Bank President Philippe Maystadt signed the loan deal with Finance Minister Sebastian Vladescu and Bucharest Mayor Adriean Videanu, the government said in a statement.
The bank is the European Union's financing institution.
The first loan for euro 25 million (US$31.8 million), is meant for restoring a water sanitation facility to the capital, Bucharest.
The project is also being supported by EU funds and a loan from the European Bank for Reconstruction and Development, the statement said.
Money from a second loan will go toward modernizing infrastructure for supplying water in small and medium-sized cities
The bank would invest in infrastructural, environmental and health projects in Romania, which most bring its utilities up to EU standards like this the country may be more prepare for the joining the EU in 2007.
