Project number:


Business sector:

Municipal and environmental infrastructure

Notice type:


Environmental category:


Approval date:

29 Jul 2003



PSD disclosed:

16 Sep 2002

Project Description

To provide a sustainable solution to the sludge disposal problem at the Northern Wastewater Treatment Plant, which produces about 230,000 cubic meters of dehydrated sludge annually. Currently sludge from this plant is disposed in the landfill, which is approaching its maximum capacity. Moreover, it is planned to double the plant’s capacity by 2010 and therefore the construction of an incinerator is regarded as one of the top environmental priorities in St. Petersburg.

Transition Impact

The transition impact of this project is expected to be derived mainly from supporting TC programmes, including the preparation of a Performance based Service Agreement between the City and Vodokanal to improve quality of municipal service provision and to support the legal and institutional development.

The Client

St. Petersburg Vodokanal is a state unitary enterprise wholly owned by the city of St. Petersburg. It is the second largest water and waste water system operator in Europe.

EBRD Finance

A senior loan to Vodokanal of EUR 23.8 million to cofinance the construction of the Northern Wastewater Treatment Plant Incinerator. Additional financing of up to EUR 20 million is proposed as bridge facility to secure timely commencement of the project implementation.
The Project is co-financed by NIB and PNB Paribas and has also received grant approvals from NDEP and the Finnish Ministry of Environment. In addition, EIB is considering cofinancing. The proposed transaction is to guarantee full financing of the project until the EIB loan becomes effective.
The city of St. Petersburg is supporting this project with an annual payment undertaking. The Project Support Agreement is signed and the Special Purpose Programme Law governing the City project undertaking is effective.

Project Cost

EUR 90.35 million.

Environmental Impact

The objective of the project is to provide an environmentally acceptable and sustainable solution for the treatment and disposal of residual sewage sludge at the St Petersburg Northern Wastewater Treatment Plant (NWWTP). The Project is a priority environmental investment under Northern Dimension Environmental Partnership (“NDEP”).
The original Project was screened B/0 and an Environmental Analysis was carried out in spring 2003 by independent consultants under a TC funded assignment of the Bank. The investigations showed that a sludge incinerator equipped with appropriate flue gas cleaning is fully capable of operating in compliance with Russian and EU emission standards, and is a viable and environmentally sustainable sludge disposal option. The Loan Agreement and the Design & Build contract require that the incinerator will be designed to meet flue gas emission limit values set out in Russian law and in the EU Directive (2000/76 EC) on the Incineration of Waste.
The proposed provision of an additional loan facility to a Board approved project is not associated with any new environmental issues and, therefore, has been classified C/1. A review of the Client’s compliance with the loan conditionality to date, including the conduct of an Environmental Impact Assessment and associated public consultation in accordance with Russian law, has been undertaken.
An Environmental Management Plan (EMP), developed on the basis of the findings of the environmental investigations, was agreed between Vodokanal and the Bank in November 2004. The EMP includes measures for (i) mitigating adverse environmental impacts, enhancing environmental benefits and ensuring regulatory compliance of the project; (ii) environmental and safety precautions to be taken during construction, maintenance and operation of the facilities; (iii) worker health and safety; (iv) alleviation of public health concerns in the vicinity of the incinerator plant; (v) contingency planning/emergency response; and (vi) monitoring of the environmental impacts of the project and of the environmental performance of the sludge incineration plant. Vodokanal will also need to carry out a public information programme to inform public on the project implementation and its environmental impacts. Vodokanal has had satisfactory progress in the implementation of the EAP to date.
The project concept was approved by the City authorities following two public meetings held in April and July 2004. The assessment of impacts on the environment (OVOS), including public consultation, was carried out by independent Russian experts in accordance with the Russian law in January-June 2005. The public meeting on the environmental impacts of the project was held in April 2005. At the meeting, public’s concern for the air emissions and management of incineration waste materials was expressed. Also a number of comments on procedural aspects of the project approval were made. All questions of the public were answered at the meeting and no further issues have been raised. The project documentation is currently being reviewed by a number of authorities, who will set conditions for the project final design and execution. The State Environmental Expertise, which is the final review stage preceding the issuance of all permits, licences and approvals required for Project, is anticipated to be carried out in the first quarter of 2006.
The Bank continues to monitor closely the Project's compliance with the applicable environmental and social requirements.

Technical Cooperation

EUR 46,370 for environmental analysis and EUR 250,000 for the development of a service agreement between Vodokanal and the City including legal and institutional support.

Business opportunities

For business opportunities or procurement, contact the client company.

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Public Information Policy (PIP)

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Text of the PIP

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