EBRD water loan to help construction of affordable housing in Siberia

By Richard Wallis

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The European Bank for Reconstruction and Development is advancing a 10-year loan of up to 1.6 billion roubles (equivalent to €36 million) for additional water projects in the Siberian city of Surgut to make possible the construction of affordable housing for nearly 23,000 people.

Once completed, this new project will provide the infrastructure needed to handle the sewage to be produced by some 700,000 square metres of affordable housing to be built in a new district of Surgut by 2015.

To make that possible, Surgut will have to build a gravity collector, a pressured wastewater main and a special pumping station to improve both the collection and evacuation of sewage. The lack of this infrastructure is at present preventing further expansion of the city, which currently has a population of 300,000.

This new project builds on three earlier ones financed by the EBRD to improve the city’s infrastructure for which the Bank has already earmarked an additional 2.5 billion roubles (equivalent to €56 million) since 2002. The total cost of the new EBRD-financed project, the fourth such one in Surgut, is estimated at 2 billion roubles (equivalent to €45 million).

Earlier this month, the EBRD lent Surgut 200 million roubles (the equivalent of €4.5 million) to improve the collection of sewage. The EBRD’s investments in municipal water improvements throughout Russia since 1997 now total €472 million, spread over 18 projects, including this one.

The other two Surgut projects on which this new one builds are a 700 million rouble (equivalent to €16 million) housing loan signed in 2007 and a 1.65 billion rouble (equivalent to €36 million) loan which in 2002 created a framework for municipal service improvements in the city.

The borrower is Gorvodokanal, the Surgut water utility, and city is guaranteeing the latest EBRD loan. Surgut is part of the Khanti-Mansy Autonomous District, which produces 60 percent of Russia’s oil output.

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