International lenders and donors gathered in St. Petersburg today for a milestone event that creates the conditions for Russia’s second city to achieve its long-standing goal of ending the discharge of untreated sewage into the Baltic Sea.
Stopping this pollution, long an issue of major concern for the 55 million people living around the rim of the Baltic, has been made possible thanks to close cooperation between Russia, its neighbours and the international community.
This joint effort is symbolically reflected in the two closely linked projects inaugurated today as part of the celebrations marking the 155th anniversary of the foundation of St. Petersburg’s water authority, Vodokanal.
The main one is the Northern Sewage Collector Tunnel (NTC), funded by the Russian Federation and the City of St. Petersburg, while the international community has financed an unique pumping station 90 metres below ground, without which the NTC could not function. The pumping station will initially operate in test mode.
The NTC completion will allow the closure of 57 sewers that are currently discharging municipal and industrial wastewater, as well as storm water, directly into the Neva River. Their closure means nearly 500,000 cubic metres of wastewater a day will be biologically disinfected rather than pour out untreated into the Baltic.
This will help bring the treatment of wastewater by St. Petersburg in line with the recommendations by the Helsinki Convention which seeks to protect the Baltic Sea’s marine environment by reducing land-based pollution. With a population of nearly five million, St. Petersburg is the Baltic’s largest city.
Betsy Nelson, the EBRD’s Vice President for Risk and Resources, who represented the Bank at the Vodokanal event, paid tribute to the city’s clean river project as setting a perfect example of how much can be achieved for the benefit of all by cooperation between Russia and the international community.
Previous internationally-funded projects had by 2005 already cut to 15 percent the proportion of St. Petersburg’s wastewater that is discharged untreated into the Baltic. Since then, Vodokanal has managed to reduce that portion even further so that now only 1.6 percent of the city’s wastewater flows into the Neva untreated.
The EBRD has to date invested over EUR 90 million in various projects supporting St. Petersburg’s efforts to stop the discharges of untreated effluent into the Neva. This includes the largest single grant made by its Shareholder Special which donated EUR 6 million for the new pumping station.
The key actor in this programme has been the Northern Dimension Environmental Partnership (NDEP), launched in 2001 to mobilise international help in order to tackle the biggest environmental problems in Northwest Russia. The EU and Russia are now the largest contributors to the NDEP’s Support Fund.
Other major international contributors to the overall project have been the European Union, including through its TACIS programme, the Nordic Investment Bank (NIB), the European Investment Bank (EIB), the Swedish International Development Agency (SIDA), THE Nordic Environment Finance Corporation (NEFCO) and the government of Finland.
Role of the EBRD in Russian Infrastructure
- EBRD is one of the largest investors in infrastructure in Eastern Europe and the source of the largest investments by an IFI in Russian infrastructure where the Bank has been investing about USD 1 billion a year in various projects. Long–term financing is still scarce and the EBRD, together with other IFIs, plays an important role in developing this sector.
- In Russia alone, the EBRD has financed over 40 municipal infrastructure projects in more than 20 regions. In addition to modernising infrastructure and improving operational performance, EBRD projects also aim to introduce best financial practices and discipline through cost recovery at the level of operational companies, as well as budgetary sustainability at the level of municipal or regional administrations.
- EBRD also has a strong presence in the Russia water sector. Since 1997 the Bank has invested more than EUR 450 million in 22 water projects across Russia. On top of that, EBRD is engaged in a policy dialog with federal and regional authorities aiming to improve legislation and promote international best practice in water sector.
Cooperation with Vodokanal and NDEP
St.-Petersburg Vodokanal is a long-standing partner of EBRD. Our cooperation started in 1997 with a EUR 9 million loan to finance wastewater infrastructure improvements combined with technical assistance for preparation of a corporate development plan for Vodokanal. Since then EBRD financed a number of Vodokanal’s projects together with NDEP, international donors and IFIs such as NIB and EIB, to include the Northern Wastewater Treatment Plant, Southern Wastewater Treatment Plant, and the Neva Discharges Closure Project.
In total EBRD provided over EUR 90 million in loans to Vodokanal. We are pleased that owing to our joint efforts the wastewater treatment ratio in Saint-Petersburg reached 98 per cent – an outstanding achievement of the company and its management, which is highly appreciated by all international community.