EBRD lends roubles to protect Barents Sea
The European Bank for Reconstruction and Development is making a loan to help cut the flow of the untreated effluent into the Barents Sea.
Project will target municipal water services in the city of Archangelsk
Dec. 11, 2003 -- The European Bank for Reconstruction and Development is to help cut the flow of untreated effluent into the Barents Sea through a long-term loan targeting one of the priority areas in northwest Russia singled out by the country's neighbours as needing an environmental cleanup.
The Bank is advancing a 15-year rouble loan equivalent to €10 million which will, in conjunction with a grant of over €8 million under the Northern Dimension Environmental Partnership (NDEP), help the city of Archangelsk upgrade its water treatment facilities and take steps to eliminate discharges of untreated sewage into the Barents Sea basin. The exact size of the NDEP grant is still subject to review.
This is the third Russian municipal infrastructure project for which the EBRD is providing rouble financing and the fourth rouble loan in the Bank's history. Local currency is being raised through the issue of promissory notes on the Russian market.
The Archangelsk signing follows a number of other NDEP priority projects. These include support for the €166 million St Petersburg Southwest Waste Water Treatment Plant to reduce effluent dumped into the Baltic Sea; and construction of the St Petersburg Northern Incinerator, for which the EBRD last week advanced a 13-year, €23.8 million loan. The NDEP was conceived in 2001 to mobilise help from the international community to tackle the main environmental problems of northwest Russia.
Today's project is the fourth EBRD commitment under the NDEP, which began in December 2002 with the signing of the project to complete the St Petersburg Flood Protection Barrier.
The total cost of today's project exceeds the equivalent of €25 million and the borrower is Vodocanal, the Archangelsk water management company. The project has also received €1 million in donor support from the government of Finland, the UK's Department for International Development, the government of Luxembourg and the European Union.
This project is the first step in a long-term capital investment programme by Vodocanal which apart from urgent ecological priorities such as the one signed today also aims to strengthen the creditworthiness of an agency serving a population of 370,000, said Thomas Maier, Director of the EBRD's Municipal and Environmental Infrastructure team.