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Project Summary Documents Project Summary Documents (PSDs) are disclosed for each project prior to Board consideration. They contain project descriptions, financial details, client information, environmental issues, tender guidelines, and contact details. PSDs for private sector projects are disclosed at least 30 days prior to Board consideration and for state sector projects, at least 60 days. Signed projects Board approval is the final stage in the project approval process. After Board approval, the EBRD and the client sign the deal and it becomes legally binding. Signed project lists reflect year-end data.
Signed projects
Case studies Reducing carbon emissions in Ukraine Atmospheric pollution has traditionally been a by-product of Ukraine’s vast steel industry, which ranks as the seventh-largest in the world. But a €76 million funding package will help to clear the skies at Alchevsk Iron and Steel Works of 6 million tonnes of carbon dioxide over three years – the amount emitted annually by households in the city of Manchester. The Industrial Union of Donbass (Ukraine’s second-largest steel producer), its subsidiary, the Alchevsk Iron and Steel Works, and the adjacent Alchevsk Coke Works are spending €276 million on building Ekoenergia. This new unit will use waste blast furnace and converter gases and coke oven gas, which would otherwise have to be burned off by flaring, to generate electricity for the Steel and Coke Works. “This will improve energy efficiency, sharply reduce the emission of waste gases and help to bring atmospheric pollution levels down to those of developed economies,” said Sergei Taruta, Chairman of the Industrial Union of Donbass. The new 294 MW Ekoenergia power plant will be built inside the existing steel works. It will use state-of-the-art generating equipment that can operate solely with waste gases from the Steel and Coke Works and will meet EU and Ukrainian environmental standards. This means it will save on increasingly expensive supplies of natural gas and reduce the use of some of Ukraine’s oldest and most polluting power stations. The EBRD’s involvement in the project has attracted finance from other lenders, including the Japan Bank for International Cooperation (JBIC), which will provide a loan of €91 million, and private international banks, to which €74 million of the total project costs will be syndicated. This is part of a bigger programme by the Industrial Union of Donbass to modernise and expand both the Alchevsk Iron and Steel Works and the other main component of the Ukrainian steel business, the Dniprovsky Iron and Steel Works. The €0.9 billion Ukrainian programme, under way since the beginning of 2005, aims to transform these two steel giants into world-standard suppliers of semi-finished steel and rolled products. It will finance the replacement of obsolete steelmaking processes at Alchevsk, improve energy and environmental efficiency and enhance product quality. Ukraine is one of the most energy-intensive economies in the world. It is expected that this project will show other heavy industrial users of energy how to improve energy efficiency and become more competitive in global terms. Keeping the city lights burning The dim lighting of Moscow in its Soviet days is long gone, when gloomy streets were almost pitch black at night and blocks of flats were visible only by their pale yellow glow. Now the centre of the city is characterised by its Las Vegas style lighting and the city burns with brighter street lamps, glaring cafés and restaurants and households full of state-of-the-art domestic appliances. But the grid keeping the bright lights shining in Russia’s capital city is in need of investment, as demonstrated by last spring’s blackout when the whole city was virtually paralysed for two days. Consequently, the EBRD is lending Mosenergo, the Moscow utility grid company, 2.9 billion roubles (€85 million) to modernise its existing plants and to reduce emissions. This is a pioneering transaction for the EBRD in terms of financing in local currency as part of the loan will be syndicated in roubles via reputable banks based in Russia. Mosenergo, which now runs 17 electrical power plants, is a long-term client of the EBRD and this loan is a continuation of ongoing support for the electricity giant. The upgrade of existing plants should mean a more reliable electricity supply for Moscow, and new technology will improve production efficiency and make household bills easier to face. Most importantly, environmentally friendly technology will be introduced, vastly reducing sulphur dioxide emissions – a major cause of dangerous air pollution. Dmitri Vasilyev, Chief Financial Officer of Mosenergo, confirmed: “The investment programme is helping Mosenergo to improve efficiency and environmental performance, including reducing air emissions, and to strengthen its environmental management system.” Bulgarian Energy Efficiency and Renewable Energy Credit Line The EBRD is investing up to EUR 50 million into a new facility that will help promote energy efficiency and renewable energy projects in private sector businesses across Bulgaria. For the success of the credit line facility, technical support in the preparatory stage, review in the completion phase subsidy through incentives and completion fees are crucial. This support is given by the Kozloduy International Decommissioning Support Fund (KIDSF), managed by the EBRD. The KIDSF provides EUR 10 million in grant financing, complementing the EUR 50 million loan. The KIDSF was established in 2000 to help Bulgaria shut down units of the Kozloduy NPP in accordance with the timetable agreed with the European Union, as part of the accession process. Contributors to the KIDSF are: Austria, Belgium, Denmark, France, Greece, Ireland, Netherlands, Spain, United Kingdom and Switzerland. For more information: www.beerecl.com Karelsky Okatysh (KO) In 2003, the EBRD agreed a $ 60 million loan to Karelsky Okatysh (KO), a large iron pellets operations located in Karelia region, Russian Federation. The Bank's funds aims to strengthen long term KO viability and competitiveness through energy and operational efficiency improvements and balance sheet restructuring. Several components of the capital expenditure programme (>30% of the total value) will lead to improved energy efficiency. The Energy Efficiency Team has reviewed the technical viability and potential savings of these components which comprise:
These energy efficiency projects once implemented will bring an average 8% overall reduction in energy consumption. The subsequent CO2 emission reduction has been estimated at 90,000 tonnes CO2/year. Other indirect benefits will include enhanced availability of equipment and machinery, reduced maintenance costs, improved operational performances and more accurate cost control. Uralkali - potassium salts producer, Russia In 2003, the EBRD approved a $75 million loan to Uralkali, the largest Russian potassium salts producer. $55 million of the Bank's funds will finance the purchase and installation of a new power plant supplying electricity and heat to the company’s four production sites. This represents the largest energy efficiency investment to be supported by the Bank to date. During the development of the project, Uralkali has benefited from an eco-energy efficiency audit arranged by the EBRD and performed by the Dutch consulting company Haskoning funded by the Dutch Government's TC funds. The new cogeneration plant will comprise 32 CHP (combined heat and power) modules of 3MW electrical power output each. Every module consists of a reciprocating engine fuelled by natural gas. Reciprocating engines are particularly suitable for decentralized power and heat supply at low to medium temperature which is required by the processes undertaken at Uralkaly. The major benefits of the project will be:
Improving energy efficiency in Poznan's heating network, Poland Poznan, Poland’s second-largest industrial city, is one of the first cities in Poland to introduce private ownership of its district heating network. The EBRD’s equity investment in Dalkia Termika will provide the company with the capital it needs to acquire and manage the system. Private sector expertise and resources are expected to reduce operating costs and improve energy efficiency and service standards. District heating networks are usually owned and maintained by the local municipality and run from a centralised boilerhouse. They are an efficient way of providing heating and hot water in densely populated areas, but frequently suffer from a low level of capital investment, infrequent maintenance and high system losses. As a result of high running costs, heating accounts for more than 10 per cent of the average Polish household budget (far higher than the EU average). Running district heating networks and identifying opportunities for saving energy is Dalkia Termika’s main line of business. Its energy efficiency measures typically involve replacing older coal-fired boilers with more modern light-oil or natural gas-fired boilers, which are more efficient and environmentally friendly. Its investment programme for Poznan is focused on expanding the network, connecting new customers, delivering efficiencies in the system, improving insulation, and extending metering. This project is the first to be financed from a renewed multi-project facility with Dalkia International (Dalkia Termika’s parent company). The EBRD has acquired 35 per cent of Dalkia Termika’s shares with a predetermined exit strategy. The rest are held by Dalkia International (the energy services arm of Vivendi Environment). “With the acquisition of PEC Poznan and with EBRD support, Dalkia has become a major player in the Polish energy market,” said Marie-Françoise Pépin, Managing Director and President of the Board, Dalkia Termika. Harpen district heating, Czech Republic Around 20 towns and cities in the Czech Republic will benefit from modern plants providing heating services and hot water as a result of an EBRD loan to Harpen CR. This is the Bank's first loan in support of the country's district heating sector. EBRD financing of €17 million was extended to the subsidiary of the German utility Harpen AG to help refurbish district heating plants and to reduce greenhouse gas emissions. The loan will finance critical investments in a number of smaller heating sub-projects, reducing energy consumption and improving heating services for customers. The project supports the transition process by advancing private sector participation in the financing and operation of municipal services in the Czech Republic. Danfoss Regional Industrial Energy Efficiency Facility The EBRD has lent €10 million to fund a Danish-led programme to cut the excessive amount of energy used during beer production in eastern European and Russian breweries. This is the first EBRD loan to directly finance industrial energy efficiency investments in the Bank's countries of operation. The seven-year loan to Denmark's Danfoss Solutions A/S finances investments in energy efficiency projects in the brewery sector, particularly in Poland and Russia, where energy consumption by industrial companies is significantly higher than in western plants. This should allow breweries to reduce utility bills by up to 20% and will permit a strong environmental benefit of lower greenhouse gas emissions. The cost of the improvements will be repaid out of energy savings, making them entirely self-financing. The Energy Service Companies Most energy efficiency projects are small in scale. Due to the lack of financing available from local banks, the Bank and Western sponsors have pioneered the development and financing of Energy Service Companies (ESCOs) in central and eastern Europe. ESCOs enable their customers to upgrade facilities and reduce energy costs by using projected cash flows from future energy savings for investment today. To accomplish this, ESCOs employ a type of project financing called "performance contracting". Under this financing, an ESCO will identify savings opportunities in a municipal, commercial or industrial facility. Implement these energy conservation measures at no initial cost to the customer, maintain the energy savings investment for the life of the contract, and guarantee energy savings, which are used to pay back the initial investment. When the energy service contracts expire, clients can continue to benefit from reduced energy costs. ESCOs thus present a "win-win" situation in terms of energy, economy and the environment. To support ESCO development strategies the EBRD has signed Multi-Project Facilities (MPFs) with Western sponsors, such as the Compagnie Générale de Chauffe (CGC) of France, Landis & Gyr of Switzerland, and the USA's Honeywell Incorporated. Sub-projects have been signed with the CGC- Prometheus in Hungary and CGC-Termotech in the Slovak Republic. One new MPF was signed with the German municipal utility MVV Energie Aktiengesellschaft. In 1998, the Bank had participated in the establishment of eight private sector ESCOs under the MPF agreements and one with a non-MPF sponsor.
For more information about ESCO
financing.
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