|
St Petersburg improves water supply and waste-water services with EBRD financing
A large investment programme is being undertaken upon by the City of St Petersburg to improve the quality of drinking water and sewerage systems for its 5 million inhabitants. To help finance the first stage, which comprises a priority programme of DM 300 million, the European Bank for Reconstruction and Development (EBRD) is providing a loan of DM 127 million (ECU 65 million) to Vodokanal St Petersburg, the City-owned water and sewerage company.
"This financing marks a historic step," said Johan Bastin, Director of the EBRD's Municipal and Environmental Infrastructure Team, in St Petersburg today. "It is the first time that a multilateral financial institution has provided a loan to a municipal utility on a non-sovereign basis, without any state or commercial bank guarantee."
Mr Bastin continued: "In doing so, the EBRD not only builds on its unique mandate but it also underpins its key strategy of supporting the decentralised provision and financing of municipal services and infrastructure. Vodokanal's operational performance, the quality of its management and the strong support it has from the City of St Petersburg allow the EBRD to rely solely on Vodokanal's financial strength to repay the loan."
"Vodokanal is one of the best performing municipal utility companies in St Petersburg," said Igor Artemiev, City of St Petersburg's First Vice Governor. "The improvement of water and sewerage services is a key objective of the City, which fully supports the investment programme. The City's international financial standing was crucial in Vodokanal attracting EBRD financing."
The priority programme will improve the quality of drinking water in St. Petersburg, reduce pollution from municipal waste-water discharges in the Gulf of Finland and the Baltic Sea and enhance Vodokanal's operational efficiency. The project will improve Vodokanal's creditworthiness, strengthen its financial and operational performance and create the right conditions for the company to embark on its long-term investment programme on a financially sustainable basis.
Felix Karmazinov, Vodokanal's General Director, added: "By starting this important capital development programme and by taking on the EBRD's loan, Vodokanal demonstrates its commitment not only to improving the basic living conditions of the local population but also to reducing the environmental pollution of the Baltic Sea."
The EBRD's loan, divided into two tranches of DM 55 million and DM 72 million respectively to be paid back over ten years, is guaranteed by the City of St Petersburg and will be backed up by a separate project support undertaking from the Russian Government. The proceeds will be used to finance the construction of a water purification plant; the supply and installation of consumer and network water meters; the rehabilitation of the sewerage and water supply network; and the connection of open sewage discharges to the waste-water treatment plant.
Besides the EBRD's loan, there will also be a loan from the Nordic Investment Bank and financial contributions to the investment programme from Vodokanal, the Governments of Denmark, Finland, Germany and Sweden, and the Nordic Environment Finance Corporation.
|
