The Northern Dimension Environmental Partnership (NDEP) has been highly successful in co-financing projects to improve wastewater treatment in North West Russia. As a result of NDEP’s 14 year cooperation with St Petersburg Vodokanal, the city is now treating 98.4% of its wastewater. NDEP grants of EUR 40 million, combined with loans of EUR 220 million from the EBRD, EIB, NIB and NEFCO have helped to leverage investments worth over EUR 860 million. Since 2011, all major wastewater treatment plants in St Petersburg have been treating wastewater in full compliance with HELCOM recommendations. NDEP has financed similar investments also in other cities in Russia to protect the fragile ecology of the Baltic and Barents Seas area.
During our operations we have learned three important lessons. First of all, in order to have a successful project, there needs to be a committed client. St Petersburg Vodokanal has been a forward looking company committed to invest in order to improve their services and environment. We have also worked well with committed clients in Sosnovy Bor, Pskov, Vologda and other cities in the Leningrad Oblast achieving good results. On the other hand, the construction of a wastewater treatment plant in Kaliningrad, despite greatest efforts of all the stakeholders, is still far from completion due to the lack of commitment of the client (Kaliningrad Vodokanal) and the regional government in Kaliningrad.
Secondly, grants are usually the starting point to discuss a potential project with a client and they act as a catalyst to bring all other sources of financing together. Grants from NDEP and other bilateral sources, ease the financial burden of loans as well as finance project implementation and corporate development of the client company.
Thirdly, it is clear that projects cannot be financed by grants alone. There needs to be a combination of loans, grants and also local financing from the regional or federal budgets. A good mixture of committed local and foreign stakeholders has worked well in the case of NDEP.
Manager, NDEP – Northern Dimension Environmental Partnership
European Bank for Reconstruction and Development
Associate Manager, NDEP – Northern Dimension Environmental Partnership
EBRD – European Bank for Reconstruction and Development