RUSSIA: EBRD loan funds Kaliningrad wastewater infrastructure

Citizens of the Russian city of Kaliningrad are set to enjoy cleaner drinking water as a result of a loan from the European Bank for Reconstruction and Development (EBRD). A substantial reduction in pollution levels in the Baltic Sea is also expected to result from the US$ 18 million (EUR 16.5 million) loan to improve the city's wastewater collection and treatment infrastructure.

“The long-term discharge of untreated wastewater into the Baltic Sea has left a legacy of serious environmental contamination,” said Johan Bastin, EBRD’s Business Group Director for Infrastructure. “The Helsinki Commission includes the city of Kaliningrad on its list of major polluters of the Baltic Sea. With the help of the EBRD’s loan, the Russian government can remove Kaliningrad from this list of environmental offenders. Significant energy savings and improved quality of drinking water in Kaliningrad will also result.”

The loan will be made to the Russian Federation, to be lent on to the municipal water and sewerage company Kaliningrad Vodokanal. It will finance the upgrading of a groundwater treatment plant; completion of a new wastewater treatment plant; and the rehabilitation of pumping stations, wastewater collectors, water mains and the water supply network. It will also supply technical services and help to finance the installation of water-meters.

The total project cost will be US$ 62 million (EUR 63 million). Additional financing will be provided by the Swedish International Development Agency (SIDA), the Danish Environmental Protection Agency (depa), the Nordic Investment Bank (Nib) and the Nordic Environment Finance Corporation (Nefco). The project will be implemented over a four-year period from 2000 to 2003.

An important component of the project is a comprehensive institutional strengthening and capacity building programme. This will improve the financial and operational performance of Kaliningrad Vodokanal and strengthen the city’s capacity to administer and regulate the sector. It will also help the city to review its tariff policy for water and wastewater services, which is needed to ensure a sustainable financial basis for the provision of the services.

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