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EBRD helps secure heating for remote settlements in Eastern Siberia
1-billion rouble loan to help Yakutia cut highest cost of municipal services in Russia
The European Bank for Reconstruction and Development is providing a long-term
local currency loan to help Russia’s largest region, Yakutia in eastern
Siberia, cut costs by using locally available coal instead of specially
delivered oil to fuel district heating, particularly in remote northern
settlements where the heating season averages 10 months of the year.
A one-billion rouble loan signed by the Bank and the State Unitary Enterprise
for Housing and Communal Services of the Republic of Sakha (Yakutia) will
finance the modernisation of the systems providing heat and hot water to
settlements which have no all-year road links. They can only survive thanks to
deliveries during a short season when the sea or rivers are ice-free in summer
(the so-called Northern Delivery system).
The 14-year loan has been guaranteed by the Republic of Sakha (Yakutia), a
permafrost area rich in mineral resources which covers 20 percent of Russia’s
landmass but whose less than 1 million inhabitants represent only 0.7 percent
of the Russian population. Winter temperatures in Yakutia fall below -50
Centigrade for extended periods of time and may sometimes dip below -60
Centigrade.
The costs for municipal services in Yakutia are the highest in Russia.
Equipment is often inefficient and worn out, especially in the heating sector.
There is a potential for significant cost savings as fuel and transportation
account for around 75 percent of operational costs of municipal services in
the northern settlements.
This transaction highlights the EBRD’s commitment to help Russia modernise its
infrastructure and opens possibilities of replicating this kind of deal in
similar areas of the country, said Thomas Maier, Director of the EBRD’s
Municipal and Environmental Infrastructure.
The State Unitary Enterprise which the EBRD is funding provides approximately
95 percent of the heating and water and wastewater services in the region, not
including Yakutia’s four main cities, which have their own independent
systems. It also operates the special delivery system for fuel and other
essentials to remote settlements during the short transport season in
August-September.
The EBRD-financed rehabilitation programme will focus on replacing boilers
with a view to reducing fuel consumption; installing individual heating
substations in municipal housing blocs and public buildings and modernising
distribution networks, as well as investing in IT upgrades.
The EU’s TACIS fund has financed feasibility studies worth €500,000 towards
the preparation of this project and the Japanese government is ready to
contribute €1.8 million towards project implementation and the building of
institutional capacity.
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