|
EBRD lends EUR10 million for water project in northern Russia
International support mobilised for Arctic environmental project
The European Bank for Reconstruction and Development and the international
community are banding together to help a city in the north of Russia improve
waste-water treatment and put its municipal services on a financially sound
basis.
The EBRD is lending the rouble equivalent of €10 million (Euros) to the water
and waste-water utility company of the city of Syktyvkar in Russia’s Arctic
Komi region. The loan is part of an infrastructure programme under which the
Bank is pioneering the financing of Russian municipalities without requiring
sovereign guarantees.
The EBRD loan is backed by a financial guarantee from the Republic of Komi,
one of Russia’s 89 regions. Syktyvkar, capital of the sparsely populated
region, is a city of 245,000 in southwest Komi and is located 1,400 km
northeast of Moscow.
The total cost of the work to be carried out is estimated at €21 million
(Euros), of which €3.7 million (Euros) will be financed with a grant from the
Northern Dimension Environmental Partnership (NDEP) Support Fund. The
governments of Canada, Finland and Sweden, as well as the European Union, are
providing an additional €850,000 (Euros) in grant support.
The NDEP was set up in 2001 to mobilise investments from the international
community to tackle the main environmental problems of northwest Russia. It
has identified 13 potential Russian environmental projects, requiring an
aggregate investment of about €1.3 billion (Euros). The Fund is administered
by the EBRD.
Thomas Maier, Director of the EBRD’s Municipal and Environmental
Infrastructure Team, said the project demonstrates how the EBRD can help
municipalities implement tariff reform, improve billing and apply better
management procedures.
The EBRD’s Municipal and Environmental Infrastructure operations in Russia
focus on local infrastructure investments. It works with local authorities and
their utility companies to enhance their creditworthiness by improving
budgeting, debt management and investment planning. A project similar to the
Syktyvkar transaction, involving the Arctic coal-mining town of Vorkuta in the
far north of Komi, is under consideration.
|
