“Sweden is growing and so is the need for wastewater treatment”

NIB’s pipeline of wastewater-related projects is constantly expanding, along with the demand for improvements in growing communities. In 2016, a total of EUR 683 million, 15% of all loans agreed during the year, was provided to enhance wastewater treatment, mostly in Sweden. The need for wastewater treatment reflects the growth of the country’s population, explains Pontus Cronholm from the Swedish Environmental Protection Agency in an interview with NIB Newsletter.

The total increase of the wastewater treatment capacity financed with NIB loans agreed in 2016 will allow up to 1.4 million new inhabitants to be accommodated.

Most of the wastewater projects financed in 2016 were located in Sweden. NIB provided financing for the construction of the world’s largest underground wastewater treatment facility, in Stockholm. In one of Sweden’s fastest-growing economic areas, the city of Luleå received a loan for the construction of a bio-waste digester and a biofuel upgrade facility at a wastewater treatment plant. In the municipalities of Ekerö, Kungälv and Ängelholm in different parts of the country, the Bank’s loans financed larger capacity of municipal sewage networks to collect wastewater from rural or summerhouse areas and take it to centralised treatment plants.

Pontus Cronholm, expert in wastewater treatment at the Swedish Environment Protection Agency, highlights the growing population and growing economy as the main driver behind municipal investments in wastewater treatment infrastructure. “Sweden is growing and so is the need for wastewater treatment”, he says.

“Municipalities constantly invest in improvements of public infrastructure, particularly in environmental protection. The society is becoming more and more aware of the environmental risks and threats and becomes more concerned about the quality of the environment.”

“A large part of the existing wastewater treatment capacity was built in the 1970s is approaching the end of its technological lifetime. These treatment facilities need to be replaced or heavily refurbished. There is also a shift to larger, centralised plants. Municipalities often invest in centralised treatment to replace solutions with limited capacity and smaller service areas.”

Mr Cronholm also points out that the Swedish national regulations in the area of wastewater treatment are generally stricter than those adopted as the minimum requirements at the EU level.

Each treatment plant with a capacity larger than 2,000 p.e. (person equivalent) needs an individual permit. The requirements for permits are becoming stricter all the time in terms of the technology, effectiveness of treatment and cost efficiency of the investments as well as the skills of plant personnel.

“New technologies allow further reduction of phosphorus and nitrogen in effluent. This leads to a need for new investments”, explains Johan Ljungberg, NIB’s Chief Environmental Analyst.

“Investment in wastewater treatment is a necessity for a sustainable city and to protect natural resources. The limits of the existing infrastructure restrict further urbanisation and the economic development of growth areas.”

The pipeline of loans for wastewater treatment improvements continues to grow. New loan agreements for this purpose have already been signed in 2017 with municipalities in Sweden and Finland.

“The demand for financing environmental improvements shows no sign of ceasing”, says Patrik Marckert, Senior Manager Lending, at NIB.

“Some municipalities in NIB’s member countries are still operating sewage networks, where some parts may be as much as 100 years old. Many local communities plan to continuously replace defective pipelines and expand the networks.”

Improving the environment is one of the pillars of NIB’s mandate. In the past fifteen years, the Bank’s financing for projects with positive effects on the marine environment and the quality of surface and groundwater exceeded EUR 1.5 billion.

Among the most important projects financed by NIB were the completion of a wastewater treatment plant and a 12-kilometre sewage collector in St Petersburg in Russia, the largest city in—and once largest polluter of—the Baltic Sea region. The NIB-financed project completed the city’s decades-long efforts to reduce discharges of untreated effluent into the Baltic Sea. Since the early 2000s, NIB has provided more than EUR 100 million for projects to upgrade wastewater treatment in northwestern Russia. The Bank has also financed investments in discharge cleaning projects in Lithuania, Estonia, Poland and Belarus.