The agreement is being signed. From left: Volskyy Valentyn Volodymyrovych from Lviv Vodokanal and Magnus Rystedt and Bo Nyhus from NEFCO. Photo: Julia Shevchuk

NEFCO and Lviv Vodokanal have signed a loan agreement for the construction of a biogas unit for sludge digestion at the wastewater treatment plant in Lviv in western Ukraine. The city has over 700,000 inhabitants.

Lviv wastewater treatment plant treats approx. 400,000 m3 of wastewater per day. The plant consists of two sites with four treatment lines. The treatment facilities are located in the north-eastern part of the city beside the Poltva River, and the treated wastewater flows into the Baltic Sea.

The intention is to invest in two sludge digesters of 15,000 m3 each and a cogeneration unit for the production of electricity and heat. The construction of sludge digesters will have several positive effects on both the quantity and the quality of the sludge produced. The sludge volume will be reduced by 30% and the management of the sludge will be easier. The operational costs of the plant will also be reduced, as the methane from the sludge digestion will be used for electricity and heat production, which can be used for operating both wastewater treatment sites. This will result in annual savings of approx. EUR 2.1 million.

The environmental benefits of the project will be significant. The annual reductions of carbon dioxide are 155,00 tonnes, including methane reductions of 5,000 tonnes. Other improvements at the wastewater treatment plant, in connection with the project, will be to upgrade the grid chambers on all sites and to install a chemical precipitation plant for neutralising the otherwise negative phosphorus impact of the digesters.

The savings from these improvements will enable Lviv Vodokanal to make further investments in upgrading the wastewater treatment facilities to improve the overall operation of the wastewater treatment plant. This project is therefore a first step in a long-term plan that aims to reduce the amounts of nutrients in the effluent waters that flow all the way to the Baltic Sea.

The total investments in the upgrade of the wastewater treatment plant will be EUR 31.5 million. NEFCO will provide EUR 5 million in loan financing for the project. Other financers will be the European Bank for Reconstruction and Development (EUR 15 million) and the John Nurminen Foundation (EUR 510,000), together with the city itself (EUR 3.9 million). The Eastern Europe Energy Efficiency and Environment Partnership (E5P), to which the European Union is the largest contributor, will also provide a grant totalling EUR 7.5 million for the project.

The Eastern Europe Energy Efficiency and Environment Partnership (E5P) is a €180 million multi-donor fund managed by the EBRD and designed to promote energy efficiency investments in Ukraine and other eastern European countries. The fund was established under an initiative of the Swedish government during its presidency of the European Union (EU) in 2009. E5P complements energy efficiency loans provided by financial institutions including the European Bank for Reconstruction and Development, the European Investment Bank, KfW, NEFCO and the World Bank Group. Contributors to E5P are the EU and the US, as well as Denmark, Estonia, Finland, Germany, Iceland, Ireland, Latvia, Lithuania, Norway, Poland, Sweden and Ukraine.