nORdIC InVEsTMEnT BanK nOVEMBER 2009
Keep on turning
putting a price on our future
letter from the president
The situation in the world economy
is adding to the economic concerns. It is
evident that measures in these fields are,
despite all the lip service, high on the
cost-cutting lists, and it is estimated that
investments in renewable energy will fall
by two-thirds in 2008-2009.
The fact that it is thought to be too
expensive to invest in measures mitigating
climate change and at the same time also
too expensive NOT to invest, as claimed
in the Stern Review on the Economics of
Climate Change, shows that there is some-
thing fundamentally wrong in the relative
prices of emissions.They do not reflect
the externalities related to climate change,
and we should not expect them to do so
without resolute policy measures.
It is only when carbon emissions are
properly priced that we can see the
trade-off between the long and the short
term. Needless to say, if no price is
placed on emissions, or the price is too
low, outlays targeted to reduce emissions
will appear as costs and not as invest-
ments. This is also true for the situation
in emerging economies, where it seems
on the basis of current relative prices
unfeasible to invest in best available, but
undoubtedly rather expensive, tech-
Photo: Johannes Jansson/noRDen
Many countries try to get around
this by applying different kinds of sup-
port schemes. This is, however, neither
an effective nor a lasting solution. These
schemes are typically temporary in na-
ture and they lack transparency. Hence,
they do not provide a proper guide to
R&D. Also, they rest on the assumption
that the providers of support have a
crystal ball and can judge which solu-
tions should be supported, despite the
fact that many solutions are just evolving
Find a way to
and others not yet known. Moreover,
the subsidies are not free, and the cost
burden is distributed in the economy
in a highly opaque way.
price emissions Hence, we need to be able to pro-
vide the markets with a price on carbon
emissions, which in a relatively short
period of time reflects the true external
costs of emissions. This is a global task
The UN Climate Change Conference lective effort is emerging to avoid the and thus the biggest challenge facing
in Copenhagen is rapidly approaching, necessary adjustment costs, and in many the Copenhagen conference.
and different kinds of tensions are grow- quarters decision-makers are demanding
ing. It seems that we all agree on the external financial support as a prerequi- October 2009
target, but we do not agree on how to site for participation in activities dealing Johnny Åkerholm, President and CEO
get there. Even more importantly, a col- with climate change.
2 BULLETIN NovEmBEr 09
letter from the president
BuLLetin noveMBer 2009
4 Where the water flows
hydropower generated from the rivers of lapland is crucial in
Finland’s expansion of renewable energy production
8 putting a price on our future
climate economist Klas eklund calls for a uniform price on emissions
10 Fund ensures post-2012 carbon trading
credit trading will continue after the expiration of the Kyoto Protocol
12 Fuel for debate
Delegates at coP 15 will be driven by cars tanked on waste-based biofuel
14 region gets a strategy
the baltic sea region needs integration and a strategy
16 neva programme will withstand no delays
sewage tunnel to reduce direct discharges into the neva
18 trendy travelling by tram
the city of helsinki invests in rail services
20 From waste to wealth
a new waste-to-energy plant is being built in eastern norway
Photo: Pamela schönbeRg/nIb
21 integrated environmental procedures reduce financial risks
Interview with hilde Kjelsberg, vice President and head of the
credit and analysis Department at nIb
22 shrinking eco-footprints
Recycling centre and biopower plant to reduce carbon dioxide emissions
24 new sewage pipe eases daily life
25 niB in brief
BuLLetin printed by cover pHoto
nIb bulletin is published in english. erweko Painotuote oy, helsinki Installation of new turbine in
Pirttikoski hydropower plant.
teaM puBLisHer Pamela schönberg/nIb
Director of communications noRDIc Investment banK
Jukka ahonen, nina monsen (editor) Fabianinkatu 34 neW suBscriptions
Dimitrijs alehins, Kyra Koponen, P.o. box 249 telephone +358 10 618 001
linda lindfors, Joan löfgren, FI-00171 helsinki, Finland or www.nib.int
nina näsman, Pamela schönberg telephone +358 10 618 001
Fax +358 10 618 0725 cHange oF address
Layout Internet www.nib.int Fax +358 10 618 0723
mccann helsinki e-mail email@example.com
BULLETIN NovEmBEr 09 3
Where the water flows
Hydropower generated from the rivers of Lapland is crucial in
Finland’s strategy to expand its production of renewable energy.
Photo: Pamela schönbeRg/nIb
The sun is shining in a perfectly blue sky tion work almost drowns out the voice we will have started a new cycle for
over the serene river and lake landscape of our guide, Kemijoki Director Kari our plants,” says Mr Jokinen.
of Finnish Lapland. It is a late September Jokinen. He tells us that the fifty-year- The new generators will increase the
day, and the surrounding countryside is old turbines in the plant are swallowing plant’s output of renewable and emission-
showing its finest autumn colours to the their last gallons of water this year. They free energy by 20-40%. The increase in
visiting NIB crew. We are standing on are now being replaced by modern, output will be enough to recoup the
the bank of the longest river in Finland, state-of-the-art equipment. One of the investment.
the Kemijoki, admiring the beautiful two turbines in the plant is already being
mountains reflected in the calm waters. replaced, and the other one still in use More green energy needed
But the peace and quiet exists only will be replaced next summer. In 2008, the Finnish government
on the surface. Underground, directly The installation of the new turbines submitted its new national energy and
below us, a giant water turbine is run- is part of a renovation programme that climate strategy to parliament. The strat-
ning at full capacity. We are about to visit Kemijoki started already in 1996. All egy is Finland’s answer to the European
Finland’s largest tunnel hydropower of the company’s hydropower plants are climate action and renewable energy
plant, Pirttikoski, run by the Finnish being renovated and the machinery package, in which the EU has commit-
hydropower company Kemijoki. replaced. Pirttikoski and its neighbour- ted itself to reduce greenhouse gas emis-
ing plant Vanttauskoski are the last two sions by 20% by 2020.
under construction. The country-specific target for Fin-
Massive construction “The life cycle of a hydropower land is for renewable energy production
Inside the plant, 60 metres down by plant is about 40 to 50 years and when to cover 38% of the end use of energy
elevator, the sound of heavy construc- this renovation project is completed, within the same time limit. This will put
4 BULLETIN NovEmBEr 09
Photo: Pamela schönbeRg/nIb
the first new turbine is now being installed in the Pirttikoski plant.
pressure on green energy producers such The Finnish state is the major stakehold- Mr Takala points out that there are
as Kemijoki. In 2008, renewable energy er with half of the company’s total share several positive environmental effects
accounted for about 27% of the total capital, while private owners account for of the project:
end use. the other half. “The new turbines will not need any
“Finland’s role in the strategy is ex- hydraulic fluids for lubrication, only air
tremely challenging,” says Aimo Takala, green eFFects and water. This will eliminate the risk of
CEO of Kemijoki. The variable and unstable nature of oil leakage into the environment.”
“Finland will need to turn over every wind power makes hydropower a requi-
stone there is to reach this goal, and site complement as a power source. a perFect MatcH
Kemijoki is contributing by adding Wind and other weather conditions NIB has participated in the financing
more hydropower capacity. But hydro- cannot be regulated; when the wind is of the renovation programme with a
power alone will not be sufficient to not blowing, there is no output from the loan of EUR 25 million to Kemijoki.
meet the new requirements for renewa- wind power plants. Sebastian Påwals, Senior Manager at
ble energy production. Finland will also “Hydropower production, on the NIB, says that the environmental effects
have to develop substantial production other hand, is superior in balancing of the project are important for the
capacity in wind power and biofuels.” power output, since water can be stored Bank:
Kemijoki is Finland’s largest produc- in dams and used when needed. The “Clearly, there are substantial
er of hydroelectric power. The company output from the turbines can be changed reductions of greenhouse gas emissions
owns twenty hydropower plants con- within seconds, compared to other pow- to be gained from investments like this,
nected to three river systems in Finland. er plants that need hours to increase or since any increase in renewable energy
Sixteen power plants and eight dams are decrease the produced power,” explains production crowds out fossil fuel
operated along the river Kemijoki, Mr Takala. production.”
which has given its name to the compa- The replacement of the turbines in But he also points out that the Kemijoki
ny. The aim of the Kemijoki company is the Kemijoki plants will result in a con- loan in fact fares well vis à vis both of
not to maximise its profits, but to supply siderable increase in the output of such the Bank’s operational mandates—to
hydropower to its owners at cost price. flexible, green energy in Finland. But
BULLETIN NovEmBEr 09 5
Photo: KemIJoKI oy
enhance the environment and competi- projects, for example from an environ-
Photo: Pamela schönbeRg/nIb
tiveness. mental point of view. It gives us a cer-
“The operational idea of Kemijoki, tain merit—apart from the direct fi-
to supply its owners with hydropower at nancial side of the cooperation,” he
cost price, increases the competitiveness comments.
of the owner companies. And the new And according to Mr Påwals, more
technology in the plants will make pro- NIB-financed investments in green
duction even more cost-efficient. So energy production can be expected in
mandate-wise, this is a very strong the future.
project for NIB, and we are happy to “The European climate action sets
participate.” new standards for emission-free energy
Mr Takala agrees that the coopera- production, and NIB is pleased to assist
tion has been rewarding. He points out in financing relevant investments.
that NIB’s involvement provided the Projects like this are really almost
project with added value: tailor-made for us,” he concludes. Kemijoki ceo aimo takala says that the
“For us as a company it is important renovation project will result in increased
to have international financial institu- power output and environmental benefits.
tions like NIB as partners. It gives credi-
bility to the project. And it is also of
great value to us that NIB assesses the
6 BULLETIN NovEmBEr 09
Photo: Pamela schönbeRg/nIb
Photo: KemIJoKI oy
pirttiKosKi—a piece oF FinnisH industriaL History
The Pirttikoski plant was built between in the tunnel was carried out by 2,000
1956 and 1959. The plant’s turbines were men labouring around the clock. A whole
placed 60 metres underground, in order for community of workers with their families,
the water to fall from a sufficient height. a total of about 4,000 people, was esta- the construction work is well under way, 60
metres underground, in the Pirttikoski plant.
The water was then channelled through a blished around the plant construction site
2.5–kilometre–long tunnel before being in Pirttikoski.
rejoined with the Kemijoki river.
Today, the residential area in the Pirttikoski
The building of the plant was a project of village is mostly deserted, as most of the
enormous proportions for Finland in those maintenance work of the plant is done
days. The heavy drilling and blasting work remotely from the city of Rovaniemi.
IllUstRatIon: KemIJoKI oy
the turbines in the Pirttikoski plant are placed 60 metres underground and the water is channelled through a 2.5-kilometre-long tunnel.
BULLETIN NovEmBEr 09 7
putting a price
Mr Eklund’s appeal to the world’s deci-
sion-makers due to gather at the UN
Climate Change Conference in Copen-
on our future
hagen (COP 15) in December 2009 is
clear: “We need to get a global deal
against climate change as soon as possi-
ble or the consequences will be fatal.”
Uncertainty and long time horizons,
Mr Eklund continues, delay responses to
the climate crisis. “The financial crisis
has been acute and people have seen the
collapse happening. The bankruptcy of
the global climate, on the other hand, is
a slower process. So some people still
find solace by hoping in future solutions.
And too many politicians do not nor-
mally care about what will happen long
beyond their terms,” he says.
Mr Eklund hopes putting a price on
carbon emissions will be at the top of
the delegates’ agenda at COP 15.
“Instead of having one carbon tax
system in China, another in the US and
yet another in the EU, we should ideally
have one system regulated by a global
authority,” he explains.
However, the starting point for COP
15 is challenging and Mr Eklund does
not expect the meeting to actually reach
such a conclusion. There is still no pre-
liminary agreement on how much we
should reduce emissions.
“The EU has promised to decrease its
emissions by 20%, based on 1990 levels,
by 2020, while the US has promised
nothing more than a net zero per cent
decrease. China, however, is demanding
that the rich countries decrease emissions
by 40% before they expect China and
other poorer nations to follow,” Mr Ek-
lund says, highlighting the gap of 40 per-
centage points between the two biggest
polluters in the world.
The economist raises two key pre-
requisites that should form the basis of a
successful climate conference: worldwide
the most important weapons in the fight scope and carbon pricing. Emissions
against the climate crisis are economic, should ideally have the same price every-
where to avoid carbon leakage from rich
says Klas eklund, sweden’s well-known nations’ moving their “dirty industries” to
climate economist, in an interview with the poorer nations with lower carbon taxes.
niB Bulletin. He calls for a uniform price COP 15 would need to look at cli-
on carbon emissions worldwide and better mate aid and global finance deals, as a
skilled finance personnel to help build standardised price for carbon emissions
a greener economy. would be unfair to the poor countries.
Either way, COP 15 must be both deep-
er and broader than the Kyoto Protocol,
the previous effort to reach a worldwide
agreement against global warming.
8 BULLETIN NovEmBEr 09
HopenHagen opportunity for economists to regain
Copenhagen, upcoming host to the world’s some of the status they have lost due to
biggest climate conference, has nicknamed the financial crisis.
itself Hopenhagen and proudly declares “The International Energy Associa-
itself “the most important city in the world tion has estimated that some USD 50
in 2009” in connection to the event. Mr trillion needs to be invested to make the
Eklund is concerned about the concrete energy sector less dependent on fossil
outcome of the meeting. fuels during the next few decades.
“We have to keep hopes high, but I am Financial institutions like the Nordic
afraid we will merely get a skeleton deal in Investment Bank will face the huge task
Copenhagen,” he remarks. of channelling the investments. In addi-
Mr Eklund recently met with Chinese tion, savings and bond trading are areas
officials and economists at a top-level where both commercial banks and inter-
Photos: PeR-anDeRs JöRgensen
climate seminar in Beijing and is optimistic national financial institutions will be
about China’s efforts in the long run. “I see important players,” he explains.
a new awareness of the threats of climate The economist continues on the
change, and also a new willingness to push challenges in his profession: “Once there
for a transition to a low-carbon society. No are political decisions on carbon taxes or
doubt the next five-year plan will include cap-and-trade systems, we can start
ambitious targets for a greener China,” he says. calculating the return on green tech
Mr Eklund’s colleague, Sir Nicholas projects and let our analyses affect stock
Stern, author of the Stern Review on the markets and credits. Then economists
Economics of Climate Change—who also and financial analysts should make sure
participated in the recent seminar in China that the good players are rewarded while
—warned earlier this year that the world laggards are punished with higher market Klas EKlund
cannot afford to allow COP 15 to become rates. The financial sector can then con-
another eternal negotiation system like the tribute to a greener market economy.” Prior to his position as senior
World Trade Organization. Mr Eklund has recently published economist at SEB focusing
a book on climate change, Vårt klimat, on the global economy and
econoMic tooLs (Our climate) outlining possible ways to climate, Eklund worked as
Carbon pricing is linked to other eco- alleviate global warming. In the book, chief economist in the same
nomic tools against climate change. The Mr Eklund discusses another economic financial institution between
more expensive it is to base production means of handling emissions, the Clean 1994 and 2007. He started
on fossil fuels, the stronger the incentive Development Mechanism (CDM). This his career as a teacher and
could be to invest in green technology. is an arrangement under the Kyoto researcher in macro economy
“I am an economist, so I focus on price Protocol which allows net global green- at the Stockholm School of
mechanisms; but putting a price on carbon house gas emissions to be reduced at Economics in 1975. He was
should be done in combination with in- a much lower global cost, as industrial the economic policy advi-
vestments in R&D,” Mr Eklund argues. He nations can reach their targets by financ- ser to the Swedish Minister
cites the current research on Carbon Cap- ing emission reduction projects in coun- of Finance, Kjell-Olof Feldt,
ture Systems (CCS) as a good example. tries where costs are lower. However, in between 1982 and 1984
CCS faces scepticism on safety issues recent years, criticism against the rather and to Prime Ministers Olof
and for possibly prolonging the life of cumbersome mechanism has increased. Palme and Ingvar Carlsson
coal, but Mr Eklund feels there are more “I believe this is one way the Nordic between 1984 and 1987. He
arguments on the plus side. and Baltic regions could collaborate to has served on various boards
“There are poor nations that will still cut emissions without decreasing indus- for research institutions on
rely on coal for a long time, and we can- trial output. However, this system will the environment and climate
not prohibit any country from using fossil only work if receiving countries put a and in the early 1990s chai-
fuels. The two-degree target, the increase ceiling on emissions,” Mr Eklund says. red the Swedish Government’s
in global warming that most scientists “Growth the way we know it today— Commission on Productivity.
agree is the maximum our Earth can based on fossil fuels—cannot go hand in He has acted as an adviser to
handle, is much more likely to be met hand with a greener environment. Global Sweden’s EU Presidency and
with CCS technology,” he points out. warming is a sign that economic growth is currently a member of the
is not sustainable at the moment. With European Commission’s Group
eco investMents economic tools like carbon pricing and of Economic Policy Advisers,
Mr Eklund agrees when Mr Stern calls the CDM, and by always striving to find chaired by the Commission’s
the climate crisis the biggest market new and improved mechanisms, it is pos- President.
failure of all time, and says that the threat sible to make growth sustainable,”
of global warming provides a perfect he concludes.
BULLETIN NovEmBEr 09 9
Fund ensures post-2012
as the expiration of the emission reduction agreement of the Kyoto protocol
approaches, interest in the post-2012 credit carbon Fund is clearly increasing.
the Fund sends strong signals to companies and investors that credit trading
will continue after the Kyoto protocol ends.
The commitments under the Kyoto the Post-2012 Carbon Credit Fund, only purchases carbon credits deliver-
Protocol, the international agreement on jointly investing EUR 125 million. able from the beginning of 2013.
decreasing greenhouse gas emissions, will The aim of the Fund is to ensure that
end in 2012. In December this year, the emission reduction trading will extend strong signaLs needed
UN Conference on Climate Change in beyond 2012, even if there is no Christopher Knowles from the Europe-
Copenhagen (COP 15) will seek to agree agreement in place yet. an Investment Bank, who also chairs the
on the continuance of emission reduction “For the future it is essential that Fund’s Supervisory Committee, explains
activities beyond the Kyoto Protocol. Be- the emissions trading continues, and the Fund’s raison d’être:
fore new commitments have been agreed that we can further engage developing “The strength of the Carbon Credit
on, it is unclear which regulations and rules countries in this market,” says Harro Fund is that it is backed up by well-
will be applied after 2012.This uncertainty Pitkänen, Senior Director at NIB. known financial institutions, which gives
is constraining the mobilisation of financ- The Fund will acquire carbon the Fund good credibility in the market.
ing for projects through emissions trading. credits from environmentally sustaina- The Fund can send a strong signal to
Together with NIB, the European ble projects in developing and transi- companies and investors that credit trading
Investment Bank (EIB), Kreditanstalt tion countries and trade them onward will continue also after the end of 2012
für Wiederaufbau, Instituto de Crédito to companies within the European even if a new international agreement
Oficial and Caisse des Dèpots have set up Emissions Trading System. The Fund has not yet been concluded by then,” he says.
10 BULLETIN NovEmBEr 09
Trading emission reductions is one way of ensur- rights to other companies that need them to cost-effective, reducing the total cost of climate
ing further investments that contribute to redu- meet their own targets. Companies that reduce change mitigation.
cing greenhouse gas emissions, mainly from their emissions can profit by selling the rights
Companies can also purchase carbon credits
industry. In the European Emissions Trading and companies that need more emission rights
issued by the United Nations to projects located
System, authorities set a cap by issuing a certain will have to buy more rights on the market. It is,
in developing and transition countries, i.e.
number of emission rights to companies which, therefore, good business to reduce emissions
outside the European Emissions Trading System.
if their actual emissions are lower, can sell the and investments will be made where it is most
Photo: lInDa lInDFoRs/nIb
Urs Brodmann of First Climate, a
company that focuses on structuring
carbon transactions and which is ad-
vising the Fund Manager, says that all
in all five so-called emission reduction
purchase agreements have been
signed, and another five are imminent.
He gives some examples of projects
that have already signed agreements
with the Carbon Credit Fund. markus van der burg, christopher Knowles and Urs brodmann think that some kind of
consensus will be reached at the climate change conference in copenhagen on how to
“We have bought carbon credits continue mitigating climate change.
from various projects involving, for
example, the building of a wind farm
in China, waste management in Ni-
geria and a landfill in Mexico. They
will all help climate change mitigation deaLing WitH cLiMate cHange
by reducing carbon dioxide emissions
Greenhouse gas emissions from industries and Denmark, are examples of projects that aim to
on a global level. On top of this, they
individual consumption are heating the world and mitigate climate change. The clean, renewable
will also bring various local benefits,”
changing its climate. By dealing with negative energy generated by the new parks’ 180 turbi-
Mr Brodmann explains.
environmental impacts today, we are mitigating nes will be enough to power 400,000 homes.
Markus van der Burg of Conning
climate change that may threaten our way of life
Asset Management, the Fund Manag- NIB also financed the upgrade of hydropower
er of the Post-2012 Carbon Credit plants in Sweden and Finland, which will help
Fund, adds: NIB is committed to supporting actions for com- increase the output of renewable and emission-
“We can clearly see that the inter- bating and adapting to climate change. The Bank free energy. The increasing efficiency of existing
est in the Fund is increasing as we are assesses the carbon emissions of all projects it hydropower plants will help reduce reliance on
getting closer to 2012. The market is finances and identifies their potential for reducing fossil fuel-based electricity production. In Nor-
becoming increasingly aware that the emissions. NIB welcomes opportunities to finance way, a high-grade silicon metal factory for the
Fund can provide payment certainty investments promoting: solar cell industry has been financed with a NIB
to projects such that the value of their loan. Modern technologies used in the produc-
• renewable energy;
carbon credits will not fall even after tion process consume significantly less energy
the expiration of the Kyoto protocol,” • energy efficiency; than traditional methods, lowering production
he says. • cleaner production technologies reducing
costs as well as air and water emissions.
The gentlemen are carefully opti- greenhouse gas emissions; CLEERE, which stands for Climate Change,
mistic about the results of COP 15.
Energy Efficiency and Renewable Energy, is a
Though the outcome is rather uncer- • the upgrading of power networks and other
NIB lending facility with a framework of EUR 1
tain, they all think that some kind of infrastructure to cope with the effects of climate
billion. Funds for the facility are earmarked
consensus will be reached on how to change, such as extreme weather conditions.
within the Bank’s ongoing lending activities.
continue mitigating climate change In addition to NIB’s investment in the Post-2012 Since CLEERE was launched in February 2008,
through carbon reduction trading also Carbon Credit Fund, the Bank’s loans to Horns loans under this facility have been provided for
after 2012. However, negotiating such Rev II, the world’s largest offshore wind turbine about 25 environmental projects with a total
an agreement is likely to extend be- park being built in the North Sea, and the wind commitment of over EUR 750 million.
yond the Copenhagen conference. farm Rødsand II on the island of Lolland in
BULLETIN NovEmBEr 09 11
researCh and development
enzyme production at novozymes’ fermentation
Fuel for debate
factory in Kalundborg, Denmark.
When hundreds of politicians and decision-makers production relying on waste and residues
gather in copenhagen in december for the un climate from crops, known as biomass.
The NIB financing will be used to
change conference, many of their cars will be tanked ensure that the bioethanol campaign
on bioethanol. denmark’s enzyme technology company, being carried out during the climate
novozymes, has provided the enzymes needed to conference will not just remain a PR
produce the waste-based biofuel, hoping it will stunt. The aim of the R&D project is to
also provide fuel for the climate debate. produce enzymes that can convert bio-
mass into bioethanol in an affordable
manner and to reach a broad market.
“People intuitively understand that ener- cars to run on biofuel made from waste. Today the production process is very
gy based on biomass, wind and solar It is not just a dream. It will not take 30 expensive.
power is good for the environment. The years to get the technological break- “The goal of this research is to make
challenge is to make people realise that through, it is happening now,” Ms Jensen bioethanol production based on biomass
these alternatives are economically feasi- adds enthusiastically. a big industry. To make it commercially
ble in the very near future,” explains viable,” Ms Jensen says, adding that the
Camilla Kinch Jensen, Head of Investor Big Business NIB loan will help in the final push
Relations at Novozymes, from her office In June 2009, NIB and Novozymes signed towards this goal. Novozymes plans to
at the headquarters in Copenhagen. a loan agreement totalling EUR 30 million have the technology for making bio-
“We want the public and the politi- to finance research and development ethanol based on biomass commercially
cians to understand that it is possible for (R&D) in enzyme technology for biofuel relevant by 2010.
12 BULLETIN NovEmBEr 09
researCh and development
Bioethanol based on biomass is a very modate upcoming needs and reduce the According to Ms Jensen, the huge
environmentally friendly biofuel. Not use of oil,” says Ms Jensen. potential of the future bioeconomy
only are enzymes needed for the conver- could fall victim to the current econom-
sion of biomass, but with the use of en- More For Less ic crisis, unless governments and finan-
zymes, the conversion process can also Novozymes invests 14% of its turnover cial institutions act to support the devel-
become increasingly energy- and re- into R&D, a high percentage compared opment of biotechnology solutions more
source-efficient. Biofuel based on waste to chemical companies and other en- vigorously, particularly in the fields of
is able to reduce carbon dioxide emis- zyme producers. agriculture and energy.
sions by as much as 90% compared to “Innovation is the core of our busi- “In order to address global climate
fossil fuels. ness and is the key to our lead position. and resource problems, biotechnology in
“It is important to remember during Our competitors are both enzyme and agriculture and industry should be sup-
the current debate surrounding bioethanol, chemical producers,” she says and cites ported and not decreased due to eco-
soaring food prices and energy crops, an example from everyday life: “The nomic crisis or the belief that the cli-
that in order to reduce the carbon foot- public can spare the environment and mate crisis is coming in the remote
print of global transportation we should save money by washing on lower tem- future. Governments need to trigger
turn to bioethanol. It is one of the few peratures. Enzymes work well at lower research in this field and channel the
alternatives to oil today and will continue temperatures, unlike most chemicals. To investment financing through institu-
to be in the coming years. Further into get the same washing results at lower tions like NIB,” Jensen concludes, with a
the future, however, the world will need temperatures, enzymes in the detergents clear challenge to the delegates attending
a lot of different technologies to accom- are simply needed.” the upcoming climate conference.
on the road to copenhagen: the Danish enzyme technology company, novozymes, has provided enzymes
to produce waste-based biofuel for the cars to be used by the delegates at coP 15.
BULLETIN NovEmBEr 09 13
region gets a strategy
it takes at least 40 hours to travel 1,000 kilometres from
Helsinki to Warsaw by train. the Baltic sea is one of the
most threatened marine ecosystems on the planet. the
Baltic countries’ power grids are still essentially isolated
from the rest of the eu. the Baltic sea region needs
integration, a common approach, a strategy.
The Baltic Sea region is the focus of the objectives: to improve the marine envi- tion of the Baltic Sea is very
Swedish EU presidency in July–Decem- ronment, enhance prosperity, make the strong in Sweden. Together with
ber 2009. It logically puts the adoption region more accessible and attractive and climate issues, this is the highest
of the European Union’s Baltic Sea improve safety and security. environmental priority for the
Strategy, proposed by the European Sweden is favouring the strategy government.
Commission, at the top of the current during its presidency “not only because
presidency’s agenda.The agreement on the the Baltic Sea is important for our econ- WHy is sucH a strategy
strategy is expected by the end of 2009. omy and the well-being of our citizens, needed?
The strategy aims at coordinating but also because the status of the Baltic As the immediate reason for
action by the EU and EU member Sea depends very much on EU policies developing a regional strategy, its
countries as well as international organi- and legislation,” says Anders Alm of the authors name the “increasingly
sations and financial institutions to pro- Swedish Ministry of the Environment. visible degradation of the Baltic
mote a more balanced development of Mr Alm is sure that the political will Sea itself but also the need to
the region. The strategy has four main to address the environmental degrada- address the disparate development
14 BULLETIN NovEmBEr 09
Four piLLars For tHe BaLtic sea region
The European Commission adopted a Communication on the EU Strategy for the Baltic Sea Region on 10 June 2009. This is the first time that
a comprehensive strategy, covering several community policies, is targeting a macro-region. As part of the strategy, an indicative action plan has
been proposed that covers the following priorities under each of these four pillars:
susTaInaBIlITY InCREasE PROsPERITY MaKE THE REGIOn saFETY and sECuRITY
To reduce nutrient inputs To remove hindrances to
MORE aCCEssIBlE To become a leading
to the sea to acceptable the internal market in the and aTTRaCTIVE region in maritime safety
levels; Baltic Sea region; To improve the access to, and security;
To preserve natural zones To exploit the full potential and the efficiency and To reinforce protection
and biodiversity including of the region in research security of, the energy from major emergencies
fisheries; and innovation; markets; at sea and on land;
To reduce the use and Implementing the Small To improve internal and To decrease the volume
impact of hazardous Business Act: To promote external transport links; of, and harm done by,
substances; entrepreneurship, To maintain and reinforce cross border crime.
strengthen SMEs and the attractiveness of the
To become a model region
increase the efficient use Baltic Sea region in parti- Source: Communication from the
for clean shipping; Commission to the European Parliament,
of human resources; cular through education, the Council, the European Economic and
To mitigate and adapt to tourism and health. Social Committee and the Committee of
To reinforce sustainable the Regions concerning the European
climate change. Union Strategy for the Baltic Sea Region
agriculture, forestry and
paths of the countries in the region and “With political commitment at the environment are things Sweden will put
the potential benefits of more and better highest level within the EU we stand a in the forefront.”
coordination.” great chance of meeting global challenges In a recent study, the Swedish Envi-
“Since the enlargement of the Euro- and opportunities—and being a strong ronmental Protection Agency established
pean Union in 2004, the challenges the global competitor. It will be easier to that out of 24 ecosystem services—or
Baltic Sea region is facing have escalated. influence EU policies and to ensure that the natural resources and processes es-
Environmental threats, gaps in economic they, when needed, are adapted to the sential for human life—supplied by the
development and insufficient transport specific circumstances of the Baltic Sea Baltic Sea, only ten are working at an
infrastructure can only be addressed region. I am convinced that the strategy optimal level. Ecosystem services such
through better coordination and joint is the next step for EU cooperation as the provision of food and recreation
action. The EU is well-placed to facili- around the Baltic Sea, and that it will are in poor condition. Seven, including
tate these efforts,” says Ann-Kerstin serve as a model for regional cooperation the maintenance of biodiversity and the
Myleus, Deputy Head of Unit at the in Europe,” says Thomas Johansson, Team capacity of the sea to recover, are highly
European Commission’s Directorate Director of the Baltic Sea Unit at the threatened.
General for Regional Policy (DG Regio). Swedish international aid agency—Sida. “The costs of environmental invest-
When the proposal for the EU ments should be considered in relation
strategy for the Baltic Sea region was environMent a priority to what we would lose if these ecosystem
finally made public, it had been preceded in crisis? services, for instance, climate regulation
by some 18 months of preparation, led Mr Alm acknowledges that it is more dif- or the detoxification of waste, would
and coordinated by DG Regio. Many ficult to find financing for environmental collapse. In this perspective, investing in
parties have been involved in building investments during a financial crisis. the environment is good business,”
and debating it since the initiative for “On the other hand, investing in the says Mr Alm.
the strategy was taken in 2006. The im- environment is investing in the future,”
plementation is now also being shared he says and continues: “The socio-eco-
by many. nomic aspects and values of the marine
BULLETIN NovEmBEr 09 15
iMpLeMenting tHe strategy tHinK Big, tHinK region
The strategy proposes an action plan of The hopes are high that the strategy
80 flagship projects organised under 15 will pave the way for a better and
priorities (see the fact box). The action happier region around the Baltic Sea,
plan includes such initiatives as the re- the EU’s Mare Nostrum. Now that
moval of phosphates in detergent in eight out of the nine countries around
order to reduce nutrients released into the Baltic Sea are EU members, this
the sea and a plan to connect the Baltic region is in an unprecedentedly good
countries to European power networks. position to develop synergies and
The Rail Baltica project to build a rail- best practices in dealing with the
road connecting Warsaw to Tallinn with environment.
a target speed of 120 kph (up from “The area could be a model of
about 25 as of now), a joint maritime regional cooperation where new ideas
surveillance system and a fund for inno- and approaches can be tested and
vation are other examples of what’s in developed over time as best practice
the new strategy’s action plan. examples,” the strategy states.
In 2007–2013, the Baltic Sea region will The adoption of the strategy thus
benefit from more than EUR 50 billion of only marks the beginning.Thomas despite the financial
investment support under the EU cohesion Johansson of Sida hopes that the political crisis and cutbacks in
policy and other funding. decision-makers in each country
the municipal and state
around the Baltic Sea will start think-
a roLe For iFis? ing regionally when planning ahead. budget financing of the
The strategy needs the support of He advocates for more contacts and neva programme in st.
international financial institutions (IFIs), better awareness in the region: petersburg, the project is
such as NIB, the European Investment “Awareness is a prerequisite moving forward. the city
Bank and the European Bank for for reaching a stage in which we has pledged to offset the
Reconstruction and Development. intuitively see ourselves as a macro-
budget reduction in the
In tune with the objectives now region. We need to build relations to
also integrated in the EU strategy, in solve common problems—problems coming years.
early 2008 NIB established the Baltic that actually can be described as
Sea Environment (BASE) lending facility possibilities for development and The Neva Closure of Discharges of
with a framework of EUR 500 million cooperation.” Untreated Wastewater Programme, or the
as a financing source for projects with Anders Lindholm of DG Regio Neva Programme, is a large-scale project to
a positive effect on the Baltic Sea. also underscores the need for better build a sewage collection tunnel reducing
The facility is aimed at assisting in the awareness of the co-dependency in direct discharges of wastewater from St.
implementation of the Baltic Sea Action the region: “This goes across all the Petersburg waterworks into the river Neva.
Plan adopted by the Baltic Marine Envi- sectors, both for the environment, The joint financing by NIB, the Euro-
ronmental Protection Commission— which is the most obvious, but also pean Bank for Reconstruction and Devel-
HELCOM. for prosperity.” opment and the European Investment Bank
Like the environment, NIB’s other “We still see that it is hard to totals EUR 60 million. Loan agreements
focus sectors—energy, transport and work together in a coordinated were signed with the Russian water and
innovation—are directly linked to the manner and take full advantage of all sewage utility Vodokanal of St. Petersburg
priorities of the EU Baltic Sea strategy. the opportunities. We will learn how in May 2009.
“Apart from providing financial re- to make better use of existing resources, The programme is expected to deliver
sources, the IFIs are good at going from institutions, policies and legislation. 98% efficiency in wastewater treatment
ideas to concrete actions and projects,” This is what we are trying to achieve by 2015 by closing off 370 points of direct
Mr Alm says. For the time being, it looks with the Baltic Sea strategy,” Anders discharge. It is already under implementa-
like there will be a considerable number Alm of the Swedish Ministry of tion and Vodokanal has so far carried out
of project ideas in the national action the Environment concludes. extensive work, such as the completion of
plans which need to be implemented. the first tunnel leg, taken into operation in
“We really have the momentum to October 2008.
save the Baltic Sea. Our knowledge NIB is the lead bank in structuring
about the problems is sufficient to act, the financing for the programme under the
we know what we need to do and there umbrella of the Northern Dimension Envi-
are plenty of financial institutions and ronmental Partnership (NDEP), which
donors willing to help. We should really coordinates the financing of urgent
take this opportunity to invest in the
future of the Baltic Sea!” says Mr Alm.
16 BULLETIN NovEmBEr 09
During and after algae blooming, as a
result of direct discharges of wastewater,
the amount of oxygen in the water can drop
below a critical level, which threatens plant
and animal life in the sea.
“Vodokanal is a leading water utility
company in Russia and has been awarded
for their excellent performance. In this
respect, I have full faith in Vodokanal’s
leadership to meet the objectives set for
the Neva Programme both time-wise
and technically,” he says.
The entire investment programme
has been divided into two parts. Part A
is now fully financed and planned to be
completed by the end of 2012. This part
provides for increasing the wastewater
treatment to 2 million cubic metres a
neva programme day in compliance with Helsinki Com-
mission recommendations. Part B is
aimed at achieving a maximum environ-
mental effect by closing off an additional
60,000 cubic metres a day of direct un-
treated wastewater discharge into the
river Neva and the Gulf of Finland.
“This part will be implemented
when the financing is available. We are
currently working on raising financing
for Part B. The city and Vodokanal of St.
Petersburg are determined to implement
environmental investments in North- Mr Henttonen stresses that Vodokanal the investment programme to the fullest
west Russia. of St. Petersburg has an impressive track extent,” says Mr Sergeyev.
To find out how the project is record of investments with an international The full interviews with Alexey Sergeyev
proceeding—amidst the storm in the financing base and is well acquainted with and Jaakko Henttonen are available on NIB´s
financial sector and the Russian economy the necessary procurement requirements website: www.nib.int
as well as globally—we met with the as well as project management.
Vice Governor of St. Petersburg, Alexey
Sergeyev, and the Manager of NDEP,
The Vice Governor acknowledges
that the economic crisis has had an impact
on budgeting for city infrastructure
Photo: st. PeteRsbURg goveRnment
projects. “As a result, the construction of
some parts of the main sewage collector
has slowed down,” Mr Sergeyev says.
However, the sewage collector technology
does not allow for any delays in imple-
mentation. The IFI financing is, there-
fore, essential for keeping the programme
“We are optimistic about the future.
I’m sure the cutbacks in the programme
budget for 2009 will be offset by larger
injections in the coming years, so that
alexey sergeyev, vice governor of Jaakko henttonen, nDeP manager: “I have
the programme will be completed on st. Petersburg: “the programme will be full faith in vodokanal’s leadership.”
schedule,” Mr Sergeyev continues. completed on schedule.”
BULLETIN NovEmBEr 09 17
Trendy travelling by tram
“There has been a dramatic change in the way people perceive public transport
in Helsinki. There is also a strong political will to support this development. And in
both cases it is especially rail transport that is becoming the trendy way to travel.”
These are the words of Matti Lahden- centre with trams and the metro. Trams “There are 1.3 million inhabitants in
ranta, Managing Director of Helsinki have been part of the city view for over the Helsinki metropolitan area and its
City Transport. He adds that this is the a hundred years. surrounding municipalities. We have to
trend in most other cities in Europe as “Rail services have a higher status in focus on the sustainable development of
well. One major cause is concern about people’s minds. Trams are seen as a more the trafﬁc circulation in general. If every-
climate change. sophisticated means of public transport one drives his or her own car, there will
Focus is being directed from buses than buses,” adds Mr Lahdenranta. not be much trafﬁc, only trafﬁc jams. It
towards rail transport for several reasons. is therefore very important that other
Mr Lahdenranta gives a few examples: it CLOSE COOPERATION means of travelling are facilitated in this
is more convenient to travel by tram or For several years, the cities of the Helsin- area,” he says.
metro—the motion is smoother, the ride ki metropolitan area have been develop- In 2014 the metro line will be ex-
is less bouncy, there is less noise. And ing public transport in close cooperation tended by 14 kilometres westwards. The
there are no direct emissions into the and the common efforts are on the rise. new metro cars will be fully automated.
city air. The basic starting point for the develop- Also the existing cars, as well as the en-
A long-term goal of the City of ment of public transport is rail services: tire trafﬁc control system, will be up-
Helsinki is to replace all buses in the city trams, metro, and trains. graded accordingly. The current control
18 BULLETIN NOVEMBER 09
The City of Helsinki is investing
some EUR 143 million in rail
services in the coming years.
NIB has provided a loan of
EUR 50 million to the city for
investments in 40 new low-floor
trams and 48 new metro cars.
The trams will replace old ones
from the 1970s. The new metro
cars will be taken into service on
the expanding metro line. The
value-added of NIB’s loan is the
very long-term funding, 30 years.
system was taken into use in the early trafﬁc issues, Mr Lahdenranta has clear
1980s, when the metro was introduced thoughts on this issue: the more opportu-
to the citizens of Helsinki. nities you offer, the more people will seize
Mr Lahdenranta is enthusiastic when them.
he describes the new metro cars. In fact, Mr Lahdenranta does not see
“The automation will improve passenger public transport as opposing other means
safety as the risk of human mistakes will of trafﬁc.
decrease. The platforms will be closed By improving public rail transport,
with platform screen doors and the also cars and buses beneﬁt.
doors will only open when the metro “They are all part of the entire trafﬁc
stops at the station. The trains will be system. Even though we are investing in
shorter and the average time between public transport, a lot of improvements
PHOTO: PAUL WILLIAMS
departures will be decreased, from 4 are also being made in the road network.
minutes to 2.5 minutes,” he says. The one does not exclude the other. It is
about increasing people’s comfort and
OFFER ALTERNATIVES! well-being, protecting the environment
An eternal question in discussions about and supporting commerce and industry,”
the use of public transport services ver- he concludes.
sus the private use of cars is whether
improvements in public transport are Matti Lahdenranta of Helsinki City Transport
really worth the cost. With a background says we need to focus on the sustainable
education as a trafﬁc engineer, and development of the trafﬁc system.
working his entire career with public
BULLETIN NOVEMBER 09 19
Photo: oRD&hanDlIng a/s
the energy company eidsiva
energi is constructing
a new waste-to-energy tormod botheim (right), head of
renewable energy department,
plant in eastern norway eidsiva bioenergi as, inspects
that will produce bioenergy the construction site for the new
based on local waste.
The waste-to-energy plant will be able to tion of heat for the district heating system.
produce approximately 200 GWh of ener- “Bioenergy has a huge growth poten-
gy, thereby doubling the district heating tial in Norway and we feel confident that
network capacity. we can make the new waste-to-energy
Photo: RagnhIlD b. abRante/eIDsIva eneRgI as
“We expect to be able to utilise as much plant profitable,” Mr Dahl says, adding that
as 70% of the energy in the waste as heating public support and propitious financing,
and electricity,” says Tormod Botheim. He is like the loan from NIB, are playing an
head of the renewable energy department important part in reaching this goal.
at Eidsiva Energi’s own bioenergy company,
Eidsiva Bioenergi AS. He adds that the energy FroM Waste
extension of the regional district heating “Norway has been spoilt by easy access
system will enable new users to hook up to to hydropower and oil. As much as 60%
the system and gain access to the new of the electrical power is used for heat-
cost-effective and environmentally friendly ing. This is a waste of “noble” energy.
energy alternative. Electrical power is the cleanest form of
energy and the only form that can be
Waste oF energy used to run machines, computers and
“Without the right infrastructure and other high-tech appliances. Norwegians
customers, many waste incineration plants should keep warm by using warm water, “bioenergy has a huge growth potential in
norway,” says ola t. Dahl, head of eidsiva
let the energy generated go straight out the least noble form of energy, which is bioenergi’s hedmark region.
through their chimneys. Proximity to users easily generated from bioenergy,” Mr
of energy, like industry, is key in running a Dahl says. house gas emissions, as it is a carbon-
waste-to-energy plant,” Ola T. Dahl, Head “Transmission capacity to other neutral form of energy,” concludes
of Eidsiva Bioenergi’s Hedmark region, countries must increase so that the sur- Mr Botheim.
explains. He says that the new plant, plus of electricity can be exported to
named Trehorningen, already has a cus- coal-dependent countries in Europe to
tomer base for 50 GWh of district heating reduce greenhouse emissions on the Loans against
energy. whole continent,” he adds. cLiMate cHange
Trehorningen is strategically located in According to the Norwegian think
In order to alleviate climate change, it is critical
the Hamar municipality, where a signifi- tank Climate Benefit, the export of 30
to turn energy production away from oil, coal,
cant part of the households producing the TWh of wind power and hydropower per
and gas towards renewable sources of energy
waste and the consumers of the generated year could reduce CO2 emissions by up to
like the sun, wind, water, and biomass. NIB aims
heat, such as district heating and industry, 30 million tonnes if it replaces coal-fuelled
to finance projects that contribute to this deve-
are located. Upon completion by the end power production in Europe. It equals
lopment and the EUR 40 million loan agreement
of 2011, the plant will treat up to 72,000 more than half of all greenhouse gas emis-
with Eidsiva Energy is one example. The bio-
tonnes of waste a year.The waste incinera- sions in Norway.
energy project is in the A category of NIB’s
tion plant will have a turbine with the “The public debate on renewable
environmental analysis system (see interview
capacity to produce 40 GWh of electricity energy is mainly focused on hydro, solar
on opposite page).
per year in addition to the generation of and wind. However, bioenergy is an im-
steam for local industry and the produc- portant element in efforts against green-
20 BULLETIN NovEmBEr 09
Photo: tUomo mannInen
Hilde Kjelsberg, vice-president and
Head of the credit and analysis department
at niB, explains how her department
assesses the environmental impact
of niB’s potential projects.
hilde Kjelsberg, vice-President and head of
the credit and analysis Department at nIb
How is the environmental signifi- in Norway on opposite page.) nated soil or polluted groundwater.”
cance of a project measured? “Category B projects have the po- “All category A projects are moni-
“The Bank has a transaction team tential for making a moderate environ- tored, as well as other projects with an
responsible for all new loan proposals, mental impact and must undergo a partial identified need for follow-up. The moni-
and within that team we have dedicated EIA. For the projects in the remaining toring is carried out either by personnel
analysts, who cooperate and assess the categories, we decide the need for infor- from the environmental unit in my de-
projects from different angles. This is a mation on a case-by-case basis.” partment or by independent environ-
good way of evaluating a project as it mental experts.”
highlights that any environmental liabili- What is an environmental impact
ties can directly influence the bottom assessment (EIA)? Why do we need the system?
line and other risks of the project.” “EIAs are usually carried out by “As an IFI offering long-term fi-
“NIB’s environmental categorisation independent consulting firms, on behalf nancing, we need to look at all the im-
system for projects is similar to the sys- of the respective companies, and include portant risk aspects, financial and envi-
tems used by other international finan- project descriptions; policy, legal and ronmental, from a long-term perspective.
cial institutions, such as the EBRD and administrative frameworks; environmen- The environmental sustainability of a
the World Bank Group. Loan applica- tal impacts; as well as monitoring and project must be long-lasting.”
tions are categorised into four different management plans. The EIA process is “I am proud to work in a bank with
groups, according to their potential en- regulated by EU and national legislation. such an explicit environmental mandate,
vironmental impact.” NIB utilises the EIAs in its own assess- where the environmental analysis is
ment process.” integrated in the total risk assessment
What are the categories? process. I believe this puts NIB at the
“Category A projects have the po- What are the other means of forefront of the banking sector. NIB has
tential for making an extensive environ- evaluating projects considered for worked with environmental appraisals
mental impact and must undergo a full funding? for a long time, using the EU’s environ-
environmental impact assessment (EIA). “Environmental audits are conducted mental legislation as a guide. However,
These projects are made publicly availa- in conjunction with company acquisi- our environmental requirements were
ble on our website for a period of 30 tions or in projects where possible envi- further emphasised in our revised envi-
days before a final decision on financing ronmental liabilities have been identified. ronmental policy adopted in 2008. This
is taken, so our stakeholders can give An environmental audit is required for policy and related procedures will con-
their opinions. NIB finances five to projects in which there is an obvious risk tinue to be developed in the Bank on an
eight category A projects per year.” of the project sponsor facing costs of ongoing basis.”
(Read more about a category A project environmental damage, such as contami-
BULLETIN NovEmBEr 09 21
bioenergy and reCyCling
Photo: nIna näsman/nIb
the new bioenergy plant constructed by
Keravan lämpövoima is due to be ready
for commercial use in late 2009.
shrinking The new power plant will generate
heat and electricity mainly using wood-
based fuels and peat, and is, despite the
energy sources’ brown colour, a very
green alternative to the current gas-
based energy production in Kerava.
in Kerava, a city on the outskirts of the Helsinki According to Risto Mäkinen, Managing
Director of Keravan Lämpövoima, gas is
metropolitan area, two huge facilities are taking form.
no longer as feasible a fuel option as in
one is a recycling centre being expanded and the other the past, as import prices keep rising and
a new biopower plant. Both facilities will help reduce deliveries remain uncertain.
carbon dioxide emissions and both have received
long-term loans from niB. green and secure
“The security of domestically sourced
energy was appealing to the project from
Keravan Lämpövoima is building a new in the 1990s, and now new biopower the start and environmental considera-
biofuelled combined heat and power plants are appearing in various corners tions have played an important part since
plant, due to be ready for commercial use of the country. Finland is one of the the beginning of technical planning,”
in late 2009. The project is partly financed leading countries in the world in utilis- says Mr Mäkinen.
with a NIB loan of EUR 31.5 million. ing bioenergy. The building of a new While the energy mix is very flexi-
With three-fourths of the country biopower plant in the city of Kerava is ble, the production will in the beginning
covered by forests and woodland, there is further strengthening this trend. What be made up of around 40% wood-based
seldom a shortfall of wood chips and makes this project special is that it brings fuels and 60% peat. Some peat is always
forest residue in Finland. These biomass- bioenergy to the Finnish capital region needed for steady wood combustion, but
es found their way to the energy sector for the first time. according to Mr Mäkinen, it will be ra-
22 BULLETIN NovEmBEr 09
bioenergy and reCyCling
tioned to a minimum: “the key focus lies merce and industry, including the build- plastic are separated and processed into
in utilising biofuels to the greatest extent ing, retail and service sectors. Also paper reusable material. The new line, a so-
possible.” and cardboard waste from commerce and called combination line, will be able to
The new power plant is expected to households are processed. process almost all kinds of waste and is
meet 75% of the district heating demand likely to be the only of its kind in Eu-
of the city of Kerava and provide 25% of aLL Wood is Being reused rope. Mr Nivalainen explains:
the total electricity acquired by Keravan The new line for receiving wood-based “In Central Europe, recycling plants
Energia. waste is already up and running and can are usually built for one sort of waste
process 30 tonnes of waste wood and only. In Finland, there is not so much
green waste per hour. Arto Nivalainen, waste that it would be efficient to keep a
More recycling Director of L&T’s Environmental Services, single-waste plant up and running. We
explains the qualities of the new line: need to concentrate our activities on
—less waste “We receive all kinds of wood from bigger entities, ensure high efficiency
industry, painted or otherwise treated. This and thereby strengthen our competitive-
Lassila & Tikanoja (L&T), one of Fin- reduces the quality of the wood’s reusabil- ness,” says Mr Nivalainen.
land’s biggest companies in waste man- ity. But in the cleaning process pieces of “The amount of waste being reused
agement, is expanding its existing recy- metal and other extra material are separated on this site will increase from the cur-
cling plant in Kerava. Some 75,000 from the wood. When the wood comes out rent 75% to 90%. Most of the waste is
square metres, the equivalent of ten foot- of the process it is as clean as used wood reused or processed into biofuels and
ball fields, have been cleared and enor- can be and ready to be burned in bio- other burnables that can be used by
mous facilities are being built. NIB has fuelled power plants,” says Mr Nivalainen. power plants. Only a very small amount
contributed to the financing of the Not all power plants, however, are is taken to the dump site,” says Jyri
project with a loan of EUR 15 million. built in such a way that they can use chips Nummela, Production Director of L&T.
When the whole plant is ready in made from used or treated wood, due to Mr Nivalainen’s dream is that 100%
2010, the plant’s capacity will nearly the filtering technology in the plant. This of waste would be recycled. “Maybe this
triple, from 170,000 tonnes of waste to is why L&T’s wood processing line is also could be a reality already in 10 years,” he
some 450,000 tonnes per year. Luckily, it able to process so-called clean wood such concludes.
is not the amount of waste produced as forest residue.
that will increase that much in the com-
ing years, but a matter of directing more one oF a Kind
waste to recycling, as well as taking into Another processing line can receive con-
use new technology. struction and demolition waste as well as
The plant’s activities are focused on commercial and industrial waste from
recycling waste materials from com- which, for example, stone, metal, glass, and
strong Mandate FuLFiLMent
Both projects reflect NIB’s two mandates; to
strengthen competitiveness and to enhance
the environment. Lassila & Tikanoja’s recycling
plant will further strengthen the company’s
competitiveness. Keravan Lämpövoima’s
power plant will boost the city’s electricity
production capacity, as well as provide end-
users, households and business alike, with
The projects will also enhance the environment
by decreasing carbon dioxide emissions. Fuels
from recycled products and burnable waste
can replace conventional fossil fuels in energy
arto nivalainen and Jyri nummela at l&t’s new line for receiving wood-based
waste, which can process 30 tonnes of waste wood and green waste per hour.
BULLETIN NovEmBEr 09 23
“NIB was able to offer us financing
over a longer time period than other
lenders would have done. The financing
package we agreed on is very suitable,
and matches our cash outflows and in-
flows. And, of course, NIB is a secure
lender, which at this point in time is a
great benefit to us as a company.”
The project, which will be complet-
ed in 2011, is part of a service agreement
signed between the City of Tallinn and
Tallinna Vesi. According to Mr Plender-
leith, the project brings significant envi-
ronmental benefits to the city, but also
direct financial benefits to the clients.
“The current system with septic
tanks is approximately two and a half
times more expensive for the home-
owners than it will be having the
sewage treated by us.”
“And as a homeowner in Tallinn
myself, I’m looking forward to the new
sewage pipes reaching my own proper-
ty—making the daily life here so much
easier for me and my family, as it will for
some ten thousand other residents of
Tallinn,” Mr Plenderleith concludes.
construction work in the city
district of nõmme.
new sewage pipe
Photos: Pamela schönbeRg/nIb
eases daily life
through a sewage network extension partly financed
by niB, the water utility tallinna vesi is connecting
some 3,500 households to tallinn’s wastewater
In many of the old city districts of A total of 100 kilometres of new
Tallinn, houses are still not connected sewage pipes are being laid down, and
to the city’s water and sewage network. additionally some 30 kilometres of storm
The wastewater is collected in private water pipes and 10 kilometres of water
septic tanks, and then transported by car pipes.
to collection points.
The use of septic tanks, with regular Financing FroM niB
draining and cleaning, is as inconvenient The network extension project started
for the users as it is hazardous for the in 2007 and more than one third of the
environment, because of the risks of new pipes have now been laid down. NIB
“the new sewage pipes will make life easier
leakage or spills. Thus, many homeown- has participated in the financing of the for thousands of residents of tallinn,” says
ers in the city are certainly pleased now project with a loan of EUR 20 million to Ian Plenderleith, ceo of as tallinna vesi.
that Tallinna Vesi is expanding their Tallinna Vesi. Its CEO, Ian Plenderleith,
water and wastewater network to reach sees the financial cooperation with NIB as
some 3,500 new households. important for the company.
24 BULLETIN NovEmBEr 09
Photos: cIty oF vIlnIUs
the vilnius southern bypass is part
of an international transport corridor.
city loan to vilnius linking Kiev and Minsk, via Vilnius, to the
Lithuanian port of Klaipeda on the Baltic
Sea.The road will help significantly reduce
the Lithuanian capital, vilnius, has received niB financing the flow of transit traffic through the city.
totalling eur 20 million for important transport infrastructure The city has bought 100 new buses
projects as well as renewing its public transport fleet. and 70 trolleybuses complying with EU
The new 15-year-maturity loan has been the Vilnius southern bypass and the re- “The effect of upgrading the road infra-
granted for financing the city’s investment construction of main streets. The south- structure and renewing the public transport
programme planned for 2009. Most of the ern bypass, a four-lane road, is part of fleet is obvious: the emissions have de-
loan has been used for the construction of the international transport corridor IXB, creased several times.The new buses and
trolleybuses are also attractive.The feedback
from the city’s inhabitants on the improve-
ments is very positive,” explains Vilnius City
Mayor Vilius Navickas.
This is the first NIB loan to the
Lithuanian capital.The Bank’s involvement
in financing a municipal investment pro-
gramme in Vilnius is aimed at facilitating the
further economic development of the city.
“A distinguishing feature of NIB is
professionalism and efficiency.The project
appraisal was rather quick and well per-
formed.We are pleased with NIB’s contri-
bution to the implementation of the city’s
large-scale investment programme,”
Mr Navickas says.
BULLETIN NovEmBEr 09 25
Photo: lIetUvos gelezInKelIaI
improving rail traffic
niB has provided a eur 15 million loan to the Lithuanian
state rail infrastructure operator aB Lietuvos gelezinkeliai
(Lithuanian railways). the loan is earmarked to co-finance
the company’s investment programme for 2009–2011.
“With the loan received from NIB, our Rail Corridor I, connecting the Baltic The main environmental issues are
company is set to upgrade the core rail- countries via Warsaw to the rest of the rather typical for infrastructure projects:
way infrastructure. The investment pro- EU. NIB’s financing will also be used land issues, the mitigation of transport
gramme is aimed at improving rail traffic for the acquisition of four heavy-weight- impacts on sensitive areas, and leakage
safety and bringing the rail transport track motor cars. from the rolling stock. Lietuvos
infrastructure into line with EU stand- “By increasing the speed and gelezinkeliai is dealing with them
ards,” says Stasys Dailydka, Director throughput, the Lithuanian railways will directly, by implementing railway drain-
General of AB Lietuvos gelezinkeliai. become more environment-friendly,” age and surface water treatment systems,
The scope of the NIB-financed says Mr Dailydka. and by outsourcing contaminated soil
projects will include branches of Trans- In order to speed up the trains, the and hazardous waste treatment to
European Rail Corridor IX, connecting Lithuanian rail operator is installing new specialised companies.
Ukraine and Belarus to the Lithuanian signalling, telecommunication, power AB Lietuvos gelezinkeliai maintains
sea port of Klaipeda as well as the ports supply, and hot axle-box detection all of Lithuania’s 1,766 kilometres of
of Russia’s Kaliningrad Oblast. The systems. This will help reduce the risks railways and 109 railway stations.
company will also continue developing of accidents and damage caused to
the Lithuanian part of Trans-European the environment.
26 BULLETIN NovEmBEr 09
visit us in Moscow!
in september niB opened new premises in russia’s
capital. From now on, niB’s general representative
for russia, igor Kovtun, is located in the premises
of the World Bank.
“The idea of NIB premises in Moscow environmental projects within the
came about after Igor had joined the Northern Dimension Environmental
Bank two years ago. We are pleased with Partnership.
the central location of the new premises “With an increased focus on these
and its affiliation with another interna- activities, the new premises in Moscow
tional financial institution,” says Søren will largely facilitate NIB’s closer inter-
Kjær Mortensen, Senior Director, Head action with Russia’s authorities and
of Europe and Eurasia at NIB. counterparties,” says Mr Mortensen.
The new premises will provide
meeting facilities and working stations
for NIB staff visiting Moscow as well as
for NIB’s sister organisations if need be. niB in MoscoW
Russia remains a focus country and Visiting address:
an important partner for NIB. The Novinsky Garden Building,
Bank’s lending in this country is directed Bolshaya Molchanovka 36/1, Moscow
to projects in the environmental, infra- Telephone: +7 985 643 2264
nIb’s general Representative for Russia,
structure and energy sectors. NIB is the E-mail: firstname.lastname@example.org
lead bank in a number of high-priority
appointMents at niB
Mika Erkkilä (FI) has been appointed Senior Kamal Grossard-amin (DK) has been employ- Johanna Tyyskä (FI) has been appointed Legal
Country Analyst in the ed as Chief Funding Mana- Counsel in the Institutional
Country and Bank Analysis ger in the Funding and and Administrative Affairs
Unit at the Credit and Ana- Investor Relations Unit at the Unit at the Legal Depart-
lysis Department. He joins Treasury Department. He ment. She has previously
NIB from a position as joins NIB from a position as worked as Legal Counsel
Economist at the Bank of Vice President (Senior Dea- at the Nokia Corporation
Finland. His previous em- ler), Debt Capital Markets and as an Associate in the
ployment includes Nordea Origination at Danske Bank Helsinki and New York
and SEB. Copenhagen. offices of White & Case LLP.
david Bäck (FI) liisa salminen (FI)
has been appointed has been appointed
Corporate Analyst Senior Manager
at the Credit and at the Lending
Analysis Depart- Department. She
ment. is currently em-
ployed in the
BULLETIN NovEmBEr 09 27
visit our WeBsite WWW.niB.int
We work hard on keeping the website up to date,
relevant and useful for our customers, owners, the
media and other stakeholders. The website displays
NIB’s statutory documents and policies, explains
the eligibility criteria for receiving a NIB loan and
reports on recent developments. The site features
searchable databases of NIB’s loans and in-depth
stories on selected financed projects.
Hear More oFten FroM niB
By subscribing to NIB’s electronic newsletter, you
will have an opportunity to hear more from us. The
NIB Newsletter is distributed by e-mail at least five
times a year. The NIB Newsletter has links to
resources, news, case stories, recent loans, and
other publications available on the Bank’s website.
nORdIC InVEsTMEnT BanK
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