The project will finance critical infrastructure investments necessary to improve the water supply and waste-water services in the city of Kaliningrad, and will improve the financial and operational performance of the municipal water utility company, Kaliningrad Vodokanal.
The project will improve the supply of safe and clean drinking water for the population in Kaliningrad, and lead to a significant reduction in the environmental pollution of the Baltic Sea. Further objectives are to restructure Kaliningrad Vodokanal into a financially self-sustaining and efficient utility company.
The project will:
create the basis for Kaliningrad Vodokanal to operate on a commercially sustainable basis;
develop skills in Kaliningrad Vodokanal through a strong corporate development component; and
strengthen financial management, budgeting and fiscal administration capacity of the City of Kaliningrad.
The borrower will be the Russian Federation. The proceeds of the loan will be on-lent to Kaliningrad Vodokanal.
EBRD financing will comprise a sovereign loan of US$ 18 million (ECU 15.3 million). The project will be co-financed with the Nordic Investment Bank, the Nordic Environment Finance Corporation, the Swedish International Development Cooperation Agency and the Danish Environmental Protection Agency.
US$ 62.6 million (ECU 53.2 million).
The project concerns the modernisation of the water and waste-water system in the City of Kaliningrad. The project was screened B/0, requiring an Environmental Analysis, which was carried out within the framework of the project feasibility study. Kaliningrad has been identified as a priority area under the Baltic Joint Comprehensive Environmental Action Programme.
The project will bring significant environmental and public health and safety benefits to the local population, by: (i) improving drinking water quality; (ii) reducing water losses; (iii) reducing leakage of sewage into soil and groundwater; and (iv) improving the quality of discharges into public watercourses. The improvements in sewage treatment will not only be of local benefit, but will also bring about improvements in the water quality of the river Pregol and the Baltic Sea. The project will help in achieving European Union environmental standards, which cannot be met by the existing facilities.
Technical cooperation funding of ECU 2.6 million will be provided.
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Text of the PIP