Russia is drawing upon a 40-million-euro credit of the European Investment Bank (EIB) to finance the completion of a protective structure system to protect St. Petersburg form flooding. The Russian government and the bank signed the relevant agreement on Tuesday, the Russian Finance Ministry's news release reports.

This is the first Russian-EIB deal, the news release states. The bank's board of directors gave the green light to the loan in March 2003 to pay for the project.

The loan is set for 22 years, including a seven-year grace period. It will be serviced and paid by the federal government that has earmarked $18.72 million for 2005 federal budget under the foreign loan program.

Upon completion of the St. Petersburg protective structure system, the project's cost is to total $418 million, exclusive of taxes and dues, the news release notes.

In addition to money from EIB, other sources of financing have been provided for, e.g. credits by the European Bank of Reconstruction and development (EBRD) and Northern Investment Bank amounting to $245 million and $40 million respectively.

The project is to have been completed before 2009.

News source: www.en.rian.ru
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