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NEFCO has in total financed 24 renovations of wastewater treatment plants with environmental reductions. In total, NEFCO's investments in the wastewater sector have reduced the releases of phosphorus into the Baltic Sea with approximately 1000 tonnes per year. On top of that NEFCO finances wastewater treatment projects in the Barents region.

Prioritized environmental effects when up-grading of municipal waste water treatment plants are reduced emissions of BOD, nitrogen and phosphorus, but also increased energy efficiency is an important criterion for this kind of projects.

Case study from Kaliningrad

NEFCO has jointly with the European Commission financed a pilot study of wastewater treatment in Kaliningrad and the surrounding area. The study, which has been prepared by the consulting firm COWI, identifies a large number of desirable investments at the 20 locations inventoried.

At present, there is practically no modern wastewater treatment at the investigated locations which are home to approximately 220,000 people. The authorities in Kaliningrad calculate that some 160 tonnes of phosphorous and 700 tonnes of nitrogen enter the county’s watercourses from the 20 communities. As at other locations in the county, rapid modernization of water and wastewater management is required to curb eutrophication in the Baltic Sea.

To date, the Russian authorities have reserved EUR 20.6 million for the prioritized projects. Some improvements have already been made at existing treatment plants with local financing, such as in Pravdinsk, close to the city of Kaliningrad. A treatment plant was completed there some time ago, although it cannot be used at present due to a lack of electricity. Another treatment plant, financed by the EU and Russia, is ready to go on line at Gusev. Nevertheless, regional authorities have so far deferred start-up of the plant; they maintain that it does not comply with Russian environmental requirements.

The EU and several international financial institutions, including NEFCO, are now holding discussions with regional and local authorities and local water and sewage companies about financing for the projects proposed in COWI’s pilot study.

If the projects are carried out, combined reductions of phosphorous are expected to be just over 58 tons per year, which can be compared with Finland’s commitments to reduce national phosphorous emissions by 150 tonnes per year within the framework of the Baltic Sea Action Plan. Kaliningrad, according to the Baltic Marine Environment Protection Commission (HELCOM), is responsible for one of the largest point emissions of nutrients into the Baltic.

“What’s positive in this gloomy situation is that there are forces among the Russian authorities that are strongly signaling a will to invest in these projects and that the Russian government has reserved funds for these purposes. Now the plans have to be realized, beginning with the prioritizations established by Kaliningrad county administration and working further from there,” says senior investment manager Ulf Bojö at NEFCO.

Case study from Murmansk

Water and wastewater issues have been in focus for many years in Murmansk. The water quality in the Kola River and Lake Bolshoye, which both supply drinking water to the city, is listed as one of the Barents environmental hot spots. The water in the river is affected by pig and poultry farms located upstream from the water intakes. In later years the water quality has already become better although it is a strategic aim in the region to secure good quality drinking water from underground sources in the future. Still, clean water in the lakes and rivers of the Kola Peninsula is an obvious environmental priority that also affects the Barents Sea.

 

In October 2005, the Northern Wastewater Treatment Plant in Murmansk was taken into operation. This investment was achieved with partial financial support from NEFCO to Murmanskvodokanal, the local operator. It was part of an investment programme identified by a World Bank report that was terminated in 1997 before it was fully completed. Murmanskvodokanal struggles with a situation similar to many other cities in Russia with an outdated and run-down network that does not correspond to today’s demand or environmental standards. Important measures have been taken but neither tariffs nor budget contributions have been sufficient to cover more than a fraction of the needs reflected in Vodokanal’s own ambitious investment programme.

With funding from the Barents Hot Spots Facility, NEFCO has hired Nordic consultants that have helped Vodokanal to work out a prioritized short-term investment programme that will deal with some of the most needed issues in a cost-efficient way. This will include the connection of the central sewerage area of Murmansk City to the Northern WWTP and provision of disinfection of supplied water and effluents from outlets along the Kola River. Today, three quarters of the local population are still not connected to any WWTP, meaning that about 37.0 (of 45.5) Mm3 of untreated wastewater per year is discharged into the Kola Bay.

After upgrading the Northern WWTP and connecting it to the central part of the city some two thirds of the population will eventually be connected to a wastewater treatment plant. These investments are quite cost-efficient related to the waste load they reduce from the currently untreated water that is released into the Kola Bay. However, some small investments along the River Kola may also be needed to avoid the impact of larger environmental effects due to the collapse of the existing facilities at the plants.

NEFCO will continue to work with Murmanskvodokanal and the local environmental authorities to work out a financial solution for the prioritized investments. In doing so, it is very important to ensure that the population can afford the tariff increases that will be necessary. Luckily, the consultants’ affordability analyses show that this will be the case even in the more adverse future economic scenarios. So the future of the Kola River and the Kola Bay does look a little cleaner after all.