EBRD extending largest municipal loan in Belarus

By Anton Usov

EBRD extending largest municipal loan in Belarus

  • Sovereign loan of €84 million to Minsk Vodokanal  
  • Project to be co-financed by EIB
  • Largest municipal project by EBRD in Belarus to date
  • First project under EBRD Green Cities in Belarus

The EBRD is implementing the first EBRD Green Cities project in Belarus by financing the introduction of state-of-the-art wastewater management systems in the City of Minsk. The project will have significant environmental benefits for the country’s largest municipality with a population of more than two million inhabitants.

A sovereign loan of €84 million to Minsk Vodokanal (MVK), the country’s biggest municipal water utility, will be the largest loan in the municipal sector provided by the EBRD in Belarus to date. It will help finance the rehabilitation and optimisation of MVK’s wastewater treatment plant and the construction of a cost-efficient, modern sludge-management facility to ensure the company’s compliance with national and EU standards for effluent treatment quality. These measures will improve the city’s environment by reducing greenhouse gas emissions by over 130,000 tonnes of CO2 equivalent annually, which can be compared with removal of 28,000 cars from the streets of the capital.

The project will be co-financed by a parallel loan of the same amount provided by the European Investment Bank (EIB) which will be its first signed project in Belarus.  

The project is the first transaction under the Minsk Green City Action Plan (GCAP) which is part of  EBRD Green Cities. The GCAP is financed by the government of Sweden and supports actions and investments designed to address priority environmental issues in the capital of Belarus.

 EBRD Green Cities is a €950 million facility that offers a comprehensive business model for green urban development, combining strategic planning with investment and associated technical assistance.

Green Cities is one way in which the Bank is scaling up its green finance as a part of its Green Economy Transition (GET) approach. The GET approach seeks to increase the Bank’s volume of green financing to 40 per cent of the EBRD’s annual investment by 2020.

The EBRD and EIB will also allocate significant technical assistance funds to support technical, financial, environmental and social implementation aspects of the project. 

The project is the seventh waste water treatment plant financed by EBRD in Belarus.

Since the start of its operations in Belarus in 1992, the EBRD has invested over €2 billion in 95 projects in various sectors of the country's economy.