SWTP: NIB's largest project in Russia completed
Completed wastewater treatment plant to cut pollution load to the Baltic Sea
On 22 September, the Nordic Investment Bank’s largest project in Russia, the Southwest Wastewater Treatment Plant (SWTP) in St. Petersburg is being inaugurated.
This is the first project completed within the Northern Dimension Environmental Partnership. The completion of SWTP is expected to provide a major contribution to improving the quality of water in the Baltic Sea.
Of EUR 194 million invested in the new wastewater treatment complex, NIB has provided a loan of EUR 45 million, which is the largest individual contribution to the project.
“This is a state-of-the-art facility, which gives a fair chance of saving marine life in the Baltic Sea. It makes the project important for both Russia and its north-western neighbours,” says Johnny Åkerholm, President and CEO of NIB.
“We are very much aware of the needs Northwest Russia has in terms of environmental improvements-both in St. Petersburg and in other regions. Modernising wastewater treatment and water supply requires considerable investments and it lies within NIB’s strategy for the neighbouring regions to grant long-maturity loans to serve these needs.”
Since 2000, NIB has been coordinating the financial structuring of the project and acted as lead bank for the project financing. The structure of the project is unique as it is established as a private public partnership-PPP, and based on cooperation between international financial institutions, European and Nordic donors, Nordic contractors and local authorities.
The investment is set to significantly reduce the effluent load of untreated and contaminated wastewater. Particularly, it is expected that discharges of phosphorus and nitrogen in effluents through SWTP will be cut by 370 tons and 2,200 tons per year respectively, which corresponds to treatment efficiency of 70 per cent. Discharges of organics through SWTP will be reduced by 14,800 tons per year, which corresponds to treatment efficiency of 90 per cent.
“The project enjoys strong political support from the Russian Federation and a significant financial contribution from the City of St. Petersburg. Cooperation between Nordic and international financial resources, as well as local partners has provided concrete and significant results for environmental improvement in the Baltic Sea,” concludes Mr Åkerholm.
For more information about SWTP, its financing structure, expected environmental effects, as well as NIB’s projects in Northwest Russia see next pages.
NIB is a multilateral financial institution owned by eight member countries: Denmark, Estonia, Finland, Iceland, Latvia, Lithuania, Norway and Sweden. The Bank finances private and public projects within and outside the member countries. NIB has the highest possible credit rating with the leading rating agencies Standard & Poor’s and Moody’s.
Financing of the Southwest Wastewater Treatment Plant
The project costs are covered by a combination of equity, credits, grants and local funding. The funding is organised within the framework of the Northern Dimension Environmental Partnership (NDEP). Apart from the NIB loan, the financial structure involves loans from the European Investment Bank (EIB), the European Bank for Reconstruction and Development (EBRD), Finnfund and Swedfund. The project has also been funded through subordinated loans and share capital from the Nordic Environment Finance Corporation-NEFCO, the municipal water utility Vodokanal St. Petersburg, the Nordic construction companies NCC, Skanska and YIT. Other financiers are bilateral assistance from Finland and Sweden (Sida), EU assistance channelled through TACIS and a grant from the NDEP support fund. Both the City of St. Petersburg and Vodokanal has financed the building of the treatment plant’s inlet structure.
Northern Dimension Environmental Partnership-NDEP
– The aim of the NDEP is to coordinate and support the financing of urgent environmental investments with cross-border effects in the Baltic Sea and Barents regions, with the focus on Northwest Russia.
– The partnership combines the expertise and resources of the EBRD, the EIB, NIB, the World Bank, the European Commission and the Russian Federation.
– Currently, the partnership encompasses fifteen traditional environmental projects in Northwest Russia with an estimated investment need of around EUR 1.8 billion. NIB is leading the financing and preparation of seven NDEP projects.
– www.ndep.org
Southwest Wastewater Treatment Plant
– The plant will treat daily 330,000 cubic metres of wastewater. Approximately 85 per cent of municipal wastewater will be treated with the completion of SWTP.
– The quality of the treated wastewater effluent will meet the requirements established by the international Helsinki Commission for Baltic Sea water-HELCOM and EU environmental standards.
– The completion of SWTP is being implemented by a special purpose enterprise, Nordvod, established under Russian law and owned by the St. Petersburg water utility Vodokanal, the Nordic Environment Finance Corporation-NEFCO and a consortium comprising the Nordic construction companies: Finnish YIT, and two Swedish builders-Skanska and NCC.
– SWTP Construction Oy, a consortium of NCC, Skanska and YIT, has been responsible for building work.
– Construction work on SWTP started in the 1980s, but was suspended in the 1990s. At that time approximately one-fifth of the plant’s concrete structures were completed. The construction was resumed in March 2003.
– The wastewater treatment complex also includes the construction of the sludge incineration plant to be completed in early 2007.
– www.swwtp-project.se
Estimated environmental effects
– The plant’s treatment efficiency in reducing noxious emissions is set at 90 per cent for oxygen-consuming substances, BOD5, (or by 14,800 tons a year), and 70 per cent for both nitrogen (370 tons a year) and phosphorus (2,200 tons a year).
– The treatment plant will reduce the total phosphorus load into the Gulf of Finland by 4-5 per cent and BOD5 by 8 per cent.
– These effects will benefit in easing of problems caused by the excessive growth of algae, which reduce dissolved oxygen in the water and thus endanger marine life.
NIB in Northwest Russia
Northwest Russia is a priority area for NIB, with the activities mainly directed towards large environmental projects. NIB provides financing to public and private projects with focus on environmental improvements. On 31 August 2005, the amount of the outstanding loans and commitments in Northwest Russia totalled EUR 225 million.
| Project | NIB loan | Total cost of the | |
| in EUR m | project, | ||
| in EUR m | |||
| Southwest Wastewater Treatment Plant | 45 | 194 | NDEP |
| Flood barrier in St. Petersburg | 32 | 492 | NDEP |
| Norilsk Nickel, Kola Peninsula | 25 | 100 | |
| Loan programmes with Vneshtorgbank | 20 | ||
| Loan programmes with Industry & Construction Bank | 15 | ||
| Murmansk district heating | 15 | 30 | NDEP |
| Kaliningrad solid waste management | 14 | 50 | NDEP |
| Kaliningrad water and wastewater treatment | 14 | 51 | NDEP |
| Northern sludge incineration plant in St. Petersburg | 9 | 90 | NDEP |
| Sestroretsk wastewater treatment | 7.7 | 45 | |
| Leningrad Oblast water and wastewater programme | 5.3 | 20 | NDEP |
| Segezha PPM (NDEP Ladoga Programme) | 15 | 55 | NDEP |
| Kondopoga PPM (NDEP Ladoga Programme) | 12 | 38 | NDEP |
Projects under development:
| Novgorod cross municipal project | 20 | NDEP | |
| Vyborg rehabilitation project | 15 | NDEP | |
| St. Petersburg elimination of remaining direct discharges | 200 | NDEP |