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EBRD backs project to cut Baltic Sea pollution
€35.4 million loan under EU-backed plan to clean up Northwest Russia
The European Bank for Reconstruction and Development is lending €35.4 million as part of a major international effort to help finish construction of a sewage treatment plant in St Petersburg needed to stop the discharge of untreated effluent into the Gulf of Finland.
The project, whose total cost will be nearly €166 million, is being co-financed by the EBRD and the Nordic Investment Bank, which is leading the deal with a €45 million loan. The European Investment Bank is to participate through a separate €15.5 million loan to the St Petersburg city water utility Vodokanal. Other lenders and investors include Sweden's Swedfund International, the Finnish Fund for Industrial Cooperation, and the Helsinki-based Nordic Environmental Finance Corporation.
About €50 million in donor funds is due to be contributed by the EU's Northern Dimension Environmental Partnership (NDEP) Support Fund, the Swedish International Development Agency and the Finnish government, as well as through the EU's TACIS programme. The project, aimed at cutting pollution of the Baltic Sea, is being implemented under the NDEP, conceived in 2001 to mobilise help from the international community in tackling the main environmental problems of Northwest Russia.
The project is also part of a broader environmental safety plan being considered by the Bank for Russia's second biggest city. It will remove a major source of pollution threatening its Baltic neighbours, said Gavin Anderson, EBRD Business Group Director, Infrastructure, at a signing ceremony in St Petersburg.
The first project under the NDEP was signed last December when the EBRD committed $245 million towards the completion of the St Petersburg Flood Protection Barrier. Other upcoming projects include the construction of an incinerator north of the city to burn sludge produced by sewage treatment, for which the EBRD and Vodokanal recently signed a mandate letter.
The EBRD previously signed two local environmental projects that fit into this strategy - one in 2001 to rehabilitate St. Petersburg's sole official toxic waste dump located close to the main catchment area for the city's water, and another in 1997 to support Vodokanal with capital investments.
Work on the St Petersburg Southwest Waste Water Treatment Plant was started in 1987, but abandoned for lack of money. When completed, it will be able to handle 330,000 cubic metres of sewage a day and is the No 1 environmental project in the Gulf of Finland. Two key related projects - construction of inlets to collect the sewage for treatment (€15 million) and the Southwest Waste Water Treatment Plant's separate sludge incinerator (€22 million) - are earmarked for financing by the EIB and EU-TACIS.
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