Nordic Environment

Finance Corporation

(NEFCO)

Green Investmentsin the Baltic Sea area

Helsinki, 30 August 2011

Magnus Rystedt

NEFCO in brief

• International financial institution established by the Nordic countries

• Loans and equity investments for environmental projects in Eastern Europe

• Funds to a total value of EUR 450 million

• Headquartered in Helsinki with 26 employees

• Locally contracted consultants in Russia and Ukraine

Helsinki

Geographic mandate

NEFCO in brief (2)

• More than 400 projects approved • Over 50 wastewater related projects in the Baltic Sea area.• Managing several differnet funds. In addition to investment

capability this also includes TA funds and Carbon Funds; Testing Ground Facility and NEFCO Carbon Fund.

Specific relevance for the Baltic Sea Region:• Managing the BSAP Fund together with NIB. The TA fund

amounts to €11.6 million (Sweden and Finland are contributors) and aims to support implementation of projects relevant for the BSAP.

• NEFCO is involved with other IFI's (EIB, EBRD and NIB) in the Northern Dimension Environmental Partnership (NDEP) targeting environmental investments in NW Russia and Belarus. The NDEP support fund for env. projects amounts to €127 million and is managed by EBRD.

Results of our work in 2010:

CO2: 3 million tonnes

P: 1,251 tonnes SOx: 8,075 tonnes

= 6.2 million people flying from Helsinki to New York

= untreated wastewater from 1.7 million people

= 1/10 of the total SO2 -emissions in Finland in 2007

Magnus Rystedt, August 2011

Case: Southwest Wastewater Treatment Plant (SWTP) in St. Petersburg• SWTP treats wastewater from 700 000 people in St.

Petersburg.• Implemented as a Public Private Partnership (PPP).• Total investment 150 million EUR (PPP Scope). Including

associated investment 190 million EUR.Before After

Climate

Case: Promoting renewable energy in the Baltic countries

• Loans and equity investments for wind farms in Estonia, Latvia and Lithuania

• Norwegian interest through Vardar

• NEFCO has been a shareholder since 2005

• Cooperation partner: Freenergy a private Estonian investment group, EBRD shareholder from 2009

Climate

Case: Vardar Eurus investment portfolio 264 MW • Estonia: 10 windfarms,

total capacity 135.4 MW of which 2 parks under construction

• 2 biogas projects under preparation

• total annual energy production 24 000 MWh

• Lithuania: 4 windfarms total capacity 78.9 MW

• of which 3 parks under construction or preparation

• Latvia: 1 windfarm of 50 MW capacity under preparation

Climate

Case: Biogas extraction from old landfill in Kaunas region

• Owner New Heat (Finnish owners), Lithuania since 2004

• NEFCO granted subordinated loan

• Sale of ERUs precondition for viability

• Emission Reduction Purchase Agreement with TGF – approx.167 000 tonnes of CO2 equivalents

• Second stage of biogas extraction under preparation

Climate

Case: Baltic Pork • Pig breeding in Latvia

• Owned by IPI, a Norwegian investment company

• Investing in biogas production – while doubling production

• NEFCO joining as shareholder and lender 2010

• Main environmental benefit

• Cost efficient reduction of run off of nutrients from agriculture to the Baltic Sea

• A priority area for NEFCO's investments in the Baltic countries

Climate

Case: Rindipol, Poland & Belarus• Chojnice plant produces

87,000 and Hajnowka plant produces 200,000 GJ/Year

• Both plants will be extended to include electricity production.

• A separate bio-fuel trading company Biopal, has been established

• It is envisaged that Biopal will import biomass from the forestry service sister company Rindibel in Belarus

• A total of some 8 MEUR has been invested in Rindipol and Biopal

Chojnice

Hajnowka

Magnus Rystedt │ magnus.rystedt@nefco.fi │ +358 618 003www.nefco.org

Thank you for your time!