The European Investment Bank will provide a loan of EUR 25 million to the St Petersburg water company Vodokanal for the South West Wastewater Treatment Plant and for the execution of the necessary associated works.
The project is the first project in Russia to benefit from EIB financing following a decision of the Stockholm EU Council to authorise activity by the Bank in support of environmental projects in the Baltic Sea Rim of Russia.
The project will improve wastewater services for over 720,000 citizens of the City's population and will contribute to the upgrading of water quality in the Baltic Sea, being thus also important for all neighbouring Baltic Sea countries. It has been developed by Vodokanal of St Petersburg with support from the Nordic Investment Bank. In addition to the EIB, NIB and Vodokanal, cofinanciers include the City of St Petersburg, EBRD, NEFCO, the European Commission, the Finnfund, the Swedfund and the private investors involved in Nordvod, the entity in charge of the Plant.
The loan was signed by Mr. Sauli Niinistö, the Vice-President of the EIB whose responsibilities nclude supervision of the EIB activity in Russia and Mr. Karmazinov, Director General of Vodokanal and will come into force after approval of the security arrangements. In commenting on the signature Mr Niinisto said: The EIB attaches a lot of importance to this loan, and this for more than one reason: First, the loan will help with the financing and completion of an essential environmental project that will have a positive impact on the environment for the City of St Petersburg but also in countries having an access to the Baltic Sea; second, it represents the first ever lending of the European Investment Bank in Russia, a key partner of the European Union; and third, the project brings together private and public actors, including IFIs, into a common effort to accelerate the implementation of priority investments. I should also mention that the project gets also support under the NDEP, of which the Steering Group is currently chaired by the EIB.
The EIB was set up in 1958 for financing sound long-term investments that further EU policies. Its l ending priorities cover regional development, infrastructure, energy, industry and environment. Outside the EU, the Bank contributes to the European development co-operation policy in some 130 countries in Central and Eastern Europe, the Balkans, the Mediterranean region, Africa, the Caribbean and the Pacific, Asia and Latin America. In the Russian Federation, the Bank's current activities fall under a EUR 100 million envelope approved by the Stockholm European Council for supporting selected environmental projects in the Baltic Sea Rim area. An increase in the Bank's lending, to also include other sectors of EU interest, has been approved by the Brussels European Council earlier this month.