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$259 mln for St Pete Flood Barrier and Moscow TV tower
Flood barrier loan is EBRD's biggest ever
The European Bank for Reconstruction and Development is undertaking two important Russian public-sector deals worth a total of $259 million, including the Bank's largest-ever loan for a single project - the planned completion of the St Petersburg Flood Protection Barrier.
In a move underlining the EBRD's commitment to help Russia modernise its infrastructure, the Bank is providing an 18-year loan of $245 million for the flood barrier project and a 10-year loan of $14 million to repair Moscow's main television broadcasting tower, damaged by a fire in 2000. Both are loans to the Russian Federation.
Last summer's European floods have shown that in an era of climate change, it is important to be prepared, said Noreen Doyle, First Vice President of the EBRD. The barrier that this loan will help complete will have important economic benefits by preventing flood damage, she added. In a worst-case scenario, it is estimated that a major flood could cost St Petersburg nearly $4 billion in terms of physical damage alone, not counting the human and cultural price of such a catastrophe.
The international financing secured for this flood barrier gives the Russian authorities an opportunity to demonstrate that large, public-sector projects can be completed in time and within budget on the basis of open and transparent procurement practices, Ms Doyle said.
Turning to the Ostankino Tower project, she said that in addition to helping restore Moscow's main communications tower to its pre-fire condition, the loan would contribute to creating a level playing field in Russia's electronic media. Ms Doyle welcomed the commitments made by the Russian authorities to guarantee open access to the broadcasting facilities and to implement a clearly defined timetable for the market-driven tariff overhaul needed to make the Ostankino Tower project financially viable.
Ms Doyle signed both deals at a ceremony at the Russian Finance Ministry. For the Russian government, the flood protection barrier deal was signed by First Deputy Minister of Finance Sergei Viazalov, and the Ostankino Tower deal by First Deputy Minister of Finance Alexei Ulyukayev.
The signing of the Flood Barrier project officially launches an ambitious EU programme known as the Northern Dimension Environmental Partnership (NDEP), conceived in 2001 to mobilise help from the international community in tackling the main environmental problems of Northwest Russia.
Within the framework of that programme, the completion of the flood barrier will be co-financed by the European Investment Bank (EIB) which is expected to lend Russia €40 million, and the Nordic Investment Bank (NIB), which is expected to lend $40 million. In addition, the flood barrier project benefited from technical assistance worth over €2 million in donor funds provided by the Netherlands, Japan, Taiwan, the United Kingdom and the European Union.
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