St. Petersburg environmental project goes ahead despite impact of crisis

The city of St. Petersburg will cut the amount of untreated sewage discharged into the Baltic Sea to just six percent of total effluent in three years’ time thanks to a new project being jointly financed by the EBRD, the international community the Russian budget, the local government and the city water utility.

At present 85 percent of all effluent being discharged into the Gulf of Finland is already being biologically treated, thanks to a series of projects funded by Russia’s neighbours and international institutions, including the EBRD, over the last 12 years. A new project signed in St. Petersburg 2009-05-22 will push this figure to 94 percent by 2012.

The city’s ultimate goal is to eliminate all discharges of untreated sewage in order to cut pollution and safeguard the Baltic Sea, around whose shores 50 million people live.

The EBRD will contribute a 15-year loan of €17.5 million and a €6 million grant from its Shareholders’ Special Fund to the €187.1 million cost of this project. This is the fourth EBRD loan made by the EBRD to increase the city’s capacity to treat waste water.

The borrower is the city water utility, officially known as the State Unitary Enterprise Vodokanal of St. Petersburg. The Nordic Investment Bank (NIB) is also lending €25 million and the European Investment Bank (EIB), another €17.5 million to the borrower. The project is also receiving financial support from the governments of neighbouring Finland and Sweden.

The Neva Discharge Closure project, like several previous major environmental ones in the area, is part of a programme launched by the Northern Dimension Environmental Partnership (NDEP) and is backed by a €24 million grant, the largest ever allocated for a single project by the NDEP Support Fund.

The NDEP was set up by the international community in 2001 to tackle the region’s main pollution problems, particularly in Northwest Russia.

The EBRD funds will be used to upgrade St. Petersburg’s Northern Wastewater Treatment Plant and to finance the construction of a tunnel pumping station in the main underground sewage collector for the north of the city.

The fact that this key project is going ahead despite the impact of the current economic and financial crisis on local government revenues demonstrates the long-term commitment of the EBRD and its partners in this transaction, as well as the authorities, to safeguarding the environment, said Thomas Maier, the EBRD’s Business Group Director for Infrastructure.