Ukraine – Water & Waste 2019

Kiev Sewage Treatment Plant Seeks Main Contractor for Billion-Dollar Project

Published: 24 May 2019

 

Japanese development agency finances restoration of sewage treatment plant

People driving from the Kiev airport Boryspil towards the city center usually notice an unpleasant smell on their way. It is caused by the huge sewage treatment plant Bortnytska stantsiya aeratsii, which treats the wastewater of 5 million persons in the greater Kiev area. Especially residents who live near the sewage treatment plant around the subway stations Charkiwska and Posnjaky suffer from the odor nuisance.

However, the situation is expected to improve in the near future. According to an agreement reached in 2015, Japan International Cooperation Agency (JICA) is providing around US$ 970 million for the overhaul of the plant. The financing comprises a term of 40 years with an interest rate of 0.1 percent and a ten-year interest-free phase.

Kyivvodokanal seeks general contractor

After several years of preparation, the operator of the large sewage treatment plant, the municipal company Kyivvodokanal (https://vodokanal.kiev.ua), published a tender for the selection of a general contractor on 15 March 2019. Only Japanese companies or joint ventures between Japanese and Ukrainian companies are allowed to participate. The tender text is available at https://vodokanal.kiev.ua/zaproshennya-do-uchast%D1%96-v-torgax.

Construction is scheduled to start in February 2020 and should be completed by August 2025. Even after the end of the JICA-financed project, further stages of modernization are planned for the wastewater treatment plant. A solution needs to be found for the treatment of the sewage sludge. The construction of a mono-combustion plant would be an option. Kyivvodokanal is also involved in phosphorus recovery.

 

Ukraine: Selected projects in water management

Project (Company) Investment Status Contact
Rehabilitation of the sewage treatment plant Bortnytska stantsiya aeratsii (Kyivvodokanal) US$ 1 billion Tender for selection of general contractor published in March 2019 TEC International (http://www.teci.jp), Nihon Suiko Sekkei (http://www.n-suiko.co.jp), Nippon Koei (http://www.n-koei.co.jp)
Investments to improve potable water supply in Mariupol (Mariupolskoje PU WKCh) EUR 64 million Signing of a credit agreement with the French government in January 2019 http://www.mvk.org.ua/
Modernization of water supply in Mykolayiv (Mykolayiv Vodokanal) EUR 37.3 million Financing contract signed with European Investment Bank (EIB) in October 2018 https://www.vodokanal.mk.ua/
Construction of a biogas plant (4.8 MW) (Dniprovodokanal) US$ 11.2 million Planned commissioning: summer 2019 http://vodokanal.dp.ua/

Source: GMI research

 

Across the country, investments in the water sector are necessary

The Ukrainian water sector has a considerable modernization backlog. The investment requirement for the most urgent tasks alone is estimated at US$ 20 billion, the total requirement at US$ 40 billion. A large part of the pipeline networks, pumps and water treatment and purification plants are worn out or do not meet the necessary standards. The waterworks can hardly cope with investments due to the fact that tariffs do not cover costs. The funds are often sufficient only for the most necessary repair work. Accidents repeatedly occur in the pipelines.

Water supply companies complain about sharply rising electricity costs, the brain drain and delays in the adjustment of tariffs for water and wastewater by the national regulatory authority NKREKP (http://www.nerc.gov.ua). They call for the adoption of a new program. The previous program “Drinking Water 2011 to 2020” (Ukrainian: “Pytna woda Ukrajiny”) is underfunded. Of the originally estimated 3 billion Ukrainian Hryvnia (UAH; about US$ 112.8 million), only 208 million UAH have been made available so far. In the governmental budget for 2019, no funds are earmarked for the program.

With regard to investments, water supply companies are usually dependent on international donors. In addition to JICA, the World Bank is also active. As part of the Second Urban Infrastructure Project, which has been running since 2014, it is providing a total of US$ 350 million by 2020. The funds will be used for infrastructure improvements in various cities. In addition, the European Investment Bank will provide EUR 400 million for the municipal infrastructure.

The waterworks are looking for potential investors for further projects. The Ukrainian Association of Water Companies Ukrwodokanalekolohija (https://ukrvodokanal.in.ua/) presented a number of projects during a water management exhibition in November 2018. The country relies heavily on know-how and technology from abroad for the planning and implementation of water management projects.

 

Ukraine: Overview of projects in the water sector for potential investors

Company (Location) Project Investment (US$ million) Website
Charkiwwodokanal (Charkiw) Rehabilitation of pumping stations for supply and distribution systems, renovation of water networks 60.0 https://vodokanal.kharkov.ua
Ternopilwodokanal (Ternopil) Rehabilitation of pumping stations, renewal of sewerage, construction of biogas plant at sewage treatment plant 40.0 http://www.vodokanal.te.ua
Bilozerkiwwoda (Bila Zerkwa) Modernization of water supply and sanitation 37.6 http://bcvoda.com.ua
Dniprowodokanal (Dnipro) Refurbishment of pump and filter station 35.3 http://vodokanal.dp.ua
Waterworks of Sumy Rehabilitation of sewer networks 30.0 http://vodokanal.sumy.ua
Waterworks of Kamjanske Refurbishment and modernization of water supply and wastewater treatment systems 28.2 http://mvk.dp.ua
Chmelnyzkwodokanal (Chmelnyzkj) Refurbishment of sewage treatment plant 26.3 http://www.water.km.ua
Schytomyrwodokanal (Schytomyr) Rehabilitation of pumping stations and renewal of sewer networks 25.0 https://vodokanal-zt.org.ua
Tschornomorskwodokaal (Tschornomorsk) Refurbishment of sewage treatment plant 23.9 http://www.ivk.od.ua
Waterworks of Uschhorod Refurbishment of sewage treatment plant and surface water treatment plant 21.1 http://voda.uz.ua
Chersonskyj Wodokanal (Cherson) Treatment plants for water from Dnjepr 15.0 http://water.kherson.ua
Luzkwodokanal (Luzk) Modernization of water supply and wastewater treatment 12.8 http://www.vd.lutsk.ua
Pawlohradwodokanal (Pawlohrad) Modernization of water networks 12.3 http://vodokanal-pvk.org.ua
Tschernihiwwodokanal (Tschernihiw) Construction of water purification plants 7.2 https://water.cn.ua
Waterworks of Dolyna Rehabilitation of water networks 5.8 http://rada.dolyna.info
Miskteplowodoenerhija (Kamjanez-Podilskyj) Rehabilitation of water networks and underground water reservoirs 3.4 https://mtve.kp.km.ua

Source: Ukrwodokanalekolohija Association