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EBRD's first environment loan will reduce Baltic Sea pollution
Pollution into the Baltic Sea will be reduced as a result of a waste water and water supply project in Estonia's capital city, Tallinn, approved Monday by the Board of Directors of the European Bank for Reconstruction and Development (EBRD). The loan of DM 44.4 million (ECU 23 million equivalent) will be made to the Tallinn Water and Sewerage Municipal Enterprise (TWSME).
Jacques de Larosière, President of the Bank, said: "This project is a landmark on several fronts. It is the EBRD's first investment in environmental infrastructure. It is the first project by an international financial institution to reduce pollution to the Baltic Sea. It is also the first project in the region to combine financing from an international institution with substantial donor grant financing, namely from Finland and the European Union's PHARE programme."
The project consists of a programme to rehabilitate the existing system, and investments to develop new ground water well fields and expand the waste water treatment plant. The programme will improve the reliability of water supply services and drinking water quality and reduce waterborne pollution from Tallinn to the Gulf of Finland in the Baltic Sea. It will also bring about substantial reductions in operation and maintenance costs through technical improvements and the restructuring of TWSME.
One aim of the project is to continue to restructure TWSME into a self-managed, self-financing water utility enterprise independent of any state or municipal subsidies. To this end, a Twinning Arrangement has been established between Helsinki Waterworks and TWSME. Helsinki Waterworks will help TWSME to achieve operational autonomy by providing long term advice in enterprise development, day-to-day advice in project implementation and advice on streamlining the financial management of the company.
The total cost of the project is estimated at DM 91.5 million, with a foreign component of DM 56 million, DM 44.4 million of which is the EBRD loan, DM 6.6 million in Finnish grants and DM 5 million from EU-PHARE. The local component will be met by TWSME. The donor co-financing from Finland and EU-PHARE is the result of the Lucerne "Environment for Europe" initiative.
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