OREANDA-NEWS. June 12, 2009. A landmark deal with one of Russia’s leading private water operators has won international recognition at a prestigious water industry awards ceremony, reported the press-centre of EBRD.

The EBRD's Director for Municipal and Environmental Infrastructure (MEI) Jean-Patrick Marquet was congratulated by former US Vice President and Nobel Peace Prize winner Al Gore for the Rosvodokanal project at the Global Water Awards in Zurich in late April.

The project – a 1.5 billion rouble loan to part-fund a EUR465 million capital expenditure programme in Russia – was one of four deals shortlisted for Global Water Intelligence’s Water Deal of the Year prize. GWI is a leading water industry magazine. The winning deal was Abu Dhabi WWTPs.

"A major step forward"
The Rosvodokanal deal, which was signed in April 2008, was shortlisted because it “marks a major step forward in the procurement of Russian water management contracts”, according to the Global Water Awards. A major condition of the loan was the rebalancing of the company’s existing and future contracts with municipalities to bring them in line with international best practice.

"The deal shows vision and leadership on the part of the EBRD, which has worked hard to foster competition in the way Russian water contracts are awarded," the awards body said.

"The Russian water market has historically been closed to international operators. The EBRD’s initiative goes a long way towards opening the market up, which will help to accelerate the rehabilitation of Russia’s ageing water infrastructure by bringing in global players with international experience and access to cutting-edge technology.”

Innovative approach
According to Katya Miroshnik, the EBRD's operational leader for the deal, the accolade shows that the MEI team was right to engage with the client. "We tried to be innovative and find an approach where we could engage with private operators despite the legacy shortcomings in a way that would make the deal comfortable for us to finance and high on transition," Ms Miroshnik says.

"Rosvodokanal has managed to renegotiate contracts in five cities. The new contracts help the municipalities to better monitor the quality of services Rosvodokanal is providing. They also help the company because they oblige the municipalities to commit to objective and balanced criteria in dealing with the private contractor."

Since the Rosvodokanal deal, the MEI team with support from Natasha Khanjenkova, EBRD Director for Energy and Infrastructure in the Russia business group, has prepared guidelines for well-balanced long-term contracts in the municipal sector, with a focus on Russia. The guidelines, which were drawn up in close collaboration with the EBRD's Office of the Chief Economist and the Russian Urban Institute, are to be published on the EBRD web site.

“These contractual guidelines will serve as a template for Russian local authorities and Russian clients so as to ensure a sustainable public-private partnership model is established in Russia,” Mr Marquet says. “The Rosvodokanal deal and these contractual guidelines involved a broad-based team work and are typical of the global approach taken by the EBRD's MEI team in addressing sector and transition challenges.”