OREANDA-NEWS. February 16, 2010. Volzhski, an industrial city in southern Russia, boasts Europe’s largest hydropower plant, a population of some 300,000 and a water infrastructure badly in need of modernization, reported the press-centre of EBRD.     

The city was established in 1954 on the east bank of the Akhtuba River, a tributary of the Volga, to settle those who were building the hydropower plant. Nowadays its factories also make large quantities of tires, pipes, ball bearings, rubber and chemical products.

Volzhski’s population and industrial activity long ago outstripped its water supply and wastewater treatment systems. Corroded and leaking water pipes are literally a drain on municipal water company Volzhski Vodokanal’s finances: it has to spend more money on maintaining the quality and reliability of the water supply than it would if the pipes were in good working order. And the extra chemicals needed to purify the city’s drinking water increase the strain on the local environment.

Furthermore, Volzhski’s outdated wastewater treatment technology results in high levels of polluting substances being discharged into irrigation fields, which are connected to the Akhtuba River. Ultimately, this places greater pressure on the Volga’s ecosystem.

The EBRD is lending RUB 360 million (approximately EUR8.2 million) to Volzhski Vodokanal for investment in improving the reliability of the city’s drinking water supply and in making its wastewater treatment processes more modern and environmentally friendly.

The project, which is expected to cost RUB 450 million (approximately EUR 10.2 million) in total, will give Volzhski residents drinking water on demand at all times, improve the safety of water treatment procedures (some of which involve the use of potentially dangerous chemicals) and reduce the risk of waste fluids contaminating the local environment.

The operation also benefits from donor funding provided by the European Union and Germany. The European funds were used to help Volzhski Vodokanal prepare the project, for example by drawing up an Environmental Action Plan.

Funding from the German government will allow Volzhski Vodokanal to hire consultants who will carry out the company's financial and operational performance review and support the project's implementation. As part of the project, Volzhski Vodokanal will introduce gradual tariff increases until it manages to recover all costs and no longer needs municipal subsidies.

The deal is the first EBRD project in the water supply and wastewater treatment sector in Russia’s Southern Federal District and the first Municipal and Environmental Infrastructure deal of 2010.