Enterprise Housing Divestiture Project (EHDP)

Enterprise Housing Divestiture Project, partially financed from the World Bank Loan, is one of the largest Projects being implemented now in the housing sector of Russia. The Project preparation started in the year of 1994 and in November 1996 the Loan Agreement came in to force. For the financing of this Project the World Bank provided the Loan of 300 million dollars to the Russian Federation. The Cities-participants of the Project were selected on competitive bases, according to the criteria of their success in housing reform implementation at the end of 1995. In 1996-99 there were 6 cities participating in the Project : Ryazan, Vladimir, Petrozavodsk (Republic of Karelia), Orenburg, Cherepovets (Vologda Region), Volkhov (Leningrad Region). As a result of loan restructuring, since November 12, 1999 the total loan amount has been reduced to 276,8 million USD. Since February 14, 2000 two new cities have joined the Project: Saratov and Izhevsk (the Udmurt Republic). There are three more cities who have the status of reserve cities - Novgorod, Gus-Khrustalny (Vladimir Region) and Zelenodolsk (the Tatar Republic).

The main goal of the Project is to accelerate the divestiture of enterprise housing stock in the cities-participants and mitigation of unfavorable financial and managerial consequences of it's acceptance by local authorities using complex rationalization of housing sector functioning. This rationalization is aiming at the most effective usage of assets in housing sector and includes institutional reforms as well as investments.

Institutional changes include acceleration and consistent implementation of housing reform activities, such as:

• transition to new forms of ownership and management of housing stock;
• introduction competitiveness into housing stock management and maintenance;
• system of local natural monopolies management formation;
• increase cost recovery from population concurrently with efficiency of housing allowances service;

During the Project implementation period the cities have achieved much progress in the area of housing reform.

Investments include a number of activities, aimed at increase of energy and water efficiency, primarily at building level, with a 5-year payback period. They are:

• installation of commercial heat, gas, cold and hot water meters;
• retrofitting of heating system in residential buildings with modern technologies (installation of individual boilers and autonomous heat supplies together with adjustment and balancing of heating and water supply systems);
• measures to decrease loses from walls, windows, attics and basements (pane caulking, wall insulation, replacement and repair of window and doors, installation of radiator reflectors and so on);
• retrofitting of ventilation system;
• measures to decrease water consumption (installations of aerators, show heads with low consumption, repair of sanitary etc.).

In general under EHDP if is planned to apply to up to 40 different energy and water efficient technologies in residential buildings. Therewith part of the assets will be used for upstream retrofits (retrofits of Heating Points and District Heating Points, pipe replacement e.t.c.).

From the very begging the Project was considered as demonstration one, in other words the experience accumulated in cities participants was supposed to be popularized and generalized on other cities and regions. Since 1996 a Newsletters is being published (3 time a year), where all EHDP accumulated beneficial experience is described and analyzed.