The European Bank for Reconstruction and Development (EBRD), the Nordic Environment Finance Corporation (NEFCO) and the Eastern Europe Energy Efficiency and Environment Partnership (E5P) provide a financing package of EUR 27.5 million to Lviv city to implement a project on the upgrade of wastewater treatment in the city, the EBRD said in a press release on Friday.

"The new project would enable municipal enterprise Lvivvodokanal to rehabilitate and upgrade the wastewater treatment infrastructure, install a biogas production capacity in the city," the bank said.

The project is supported by an EBRD loan of up to EUR 15 million, a EUR 5 million loan from NEFCO and an investment grant of up to EUR 7.5 million from E5P.

"The proceeds will be used to significantly improve the efficiency and environmental performance of Lvivvodokanal, the major municipal utility which operates a 1,000-kilometer network of water supply systems and water treatment facilities and provides services to 760,000 residential and industrial users," the EBRD said.

The investment programme will enable Lvivvodokanal to install a wastewater biogas combined heat and power plant (CHP), which will be able to generate up to 39,400 MWh of electricity annually thus allowing the company to achieve significant energy savings and will also lead to the reduction of greenhouse gas emissions equivalent to approximately 128,600 tonnes of CO2.

"Other environmental benefits for the city and the region will be achieved through the installation of grit chambers and a chemical precipitation plant, which are expected to improve overall wastewater treatment in Lviv and reduce the pollution discharged to the Poltva River," the bank said.

Technical assistance, necessary to accomplish the feasibility study and the environmental due diligence, was provided by the Swedish International Development Cooperation Agency (SIDA).

As reported, referring to the EBRD, on December 16, 2015 the board of directors decided to provide a loan of EUR 15 million to Lvivvodokanal to realize this project. It was planned to sign the agreement in January 2016.

The total cost of the project is estimated at EUR31.5 million. Lvivvodokanal will finance up to EUR 4 million.

The EBRD is the largest international financial investor in Ukraine. As of July 1, 2015, the bank had a total cumulative commitment of EUR 11 billion in 345 projects in the country.