Russian Minster of Regional Development and World Bank Country Director for Russia Sign Loan Agreement for the Housing and Communal Services Project

Published: Sat, 19 Sep 2009 19:56:47 GMT

Moscow, September 16, 2009 - Minister of Regional Development Victor Basargin, on behalf of the Russian Government, and Klaus Rohland, World Bank Country Director, today signed the Loan Agreement between the Russian Federation and the International Bank for Reconstruction and Development (The World Bank) for the Housing and Communal Services Project.

"Signing of this agreement is of special importance now. Funds allocated under the project are going to be channeled immediately to reform the HCS sector in the regions. Municipalities with a population from 90,000 to 600,000 citizens, where the authorities have already prepared projects aimed at reforming the housing and communal services sector, will be eligible for funding," said the Minister of Regional Development.

As noted by Klaus Rohland, World Bank Country Director and Resident Representative in Russia, "this Agreement provides an opportunity to share with Russian regions the World Bank's international experience in support of municipal reforms. The main goal of the project is to ensure that Russian citizens feel positive changes from reforms undertaken in the HCS sector."

In accordance with the Agreement, IBRD will provide a loan in the amount of USD 200 million (6.2 billion Rubles). to finance the Housing and Communal Services Project. For its part, the Russian Federation will provide co-financing in the amount of about USD 6 million (185 million rubles).

The project is aimed at improving the efficiency, financial viability and quality of housing and communal services in municipalities selected on a competitive basis in July 2008.

The main difference between the HCS project and other similar projects implemented earlier in cooperation with IBRD is a totally new, comprehensive approach to reforming Russia's housing and communal services sector. The municipalities that participate in the project will have access to grant money totaling USD175 million (of 5.3 billion Rubles) in support of their respective HCS investment programs. However, in order to receive grants, each participating municipality will first need to implement an HCS sector reform program that has been developed by the Ministry of Regional Development in cooperation with World Bank experts.

The HCS sector reform program was developed based on the experience gained by leading communal service providers that successfully implemented a number programs. These include modernization, rehabilitation, and optimization of technology processes in the housing and communal sector, as well as improving procedures for provision of communal services to citizens, and introducing metering and advanced information technologies to monitor consumption of resources.

The project will be implemented in accordance with IBRD procedures and rules.

One of the core provisions of the Agreement is to allocate more than USD 30 million (915 million rubles) for technical assistance to train project participants in the area of housing and communal service reforms and the social safety net. In addition, the Agreement provides for:

public information campaigns on progress in reforming HCS;
developing on a pilot basis of a national HCS monitoring system;
supervising implementation of the investment programs by project participants;
developing the HCS regulatory and legal framework in support of the reforms and training at the federal level;
disseminating project results in other cities and regions across Russia;
operational expenditures.


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