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EBRD President attends St Petersburg Economic Forum
Power station serving St Petersburg receives a loan
EBRD President Jean Lemierre leaves on Tuesday for Russia, the Bank's biggest country of operation, in order to attend the St. Petersburg Economic Forum which is this year being organised with EBRD backing for the first time.
During his stay in St. Petersburg, Mr. Lemierre will have talks with Russian Prime Minister Mikhail Kasyanov and several members of his cabinet, as well as various CIS government leaders partipating in the Forum.
Among other business leaders, he is also scheduled to meet Anatoly Chubais, head of RAO UES (Unified Energy Systems of Russia), and sign a $40 million seven-year loan for Lenenergo to help replace outdated equipment at one of the main power stations serving the city of St. Petersburg. (for details of the following 19 June 2003 signing see below).
Lenenergo is one of the biggest power generating companies within RAO UES. The EBRD is the largest single provider of long-term finance to the Russian power sector.
This will be the fifth EBRD loan for the Russian energy sector, highlighting  the Bank's growing involvement in the implementation at the regional level of the restructuring of this crucial economic player.
The Bank is playing a growing role on the infrastructure front in Russia, advancing funds for the completion of projects that will have a real impact on the economy and bring about significant environmental benefits.
Several major environmental projects in which the EBRD is involved are clustered around St. Petersburg and their common trait is that not only the local population but also Russia's Baltic neighbours will benefit from them.
Mr. Lemierre, who will be accompanied on the trip by Mr. Igor Kovtun, the EBRD Director representing the Russian Federation, Belarus and Tajikistan on the Bank's board, will while in St. Petersburg visit a part of the city's by-pass  whose construction is being funded by the Bank.
Last September, the EBRD provided a $229 million loan to finance the construction of various sections of the St. Petersburg by-pass and the Chita-Khabarovsk highway, Russia's first road link to the Far East.
On June 16, the EBRD board of directors approved a loan of $290 million -- the biggest in the Bank's history -- that will be used to complete other sections of these two road projects. The loan signing is expected shortly.
EBRD commitments to Russia reached a record volume of nearly 1.3 billion Euros in 2002 and the Bank has a strong pipeline of Russian projects for this year as well.
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€40 million loan to Lenenergo to replace outdated equipment
Brings total EBRD lending to Russian power sector to nearly €340 million
The European Bank for Reconstruction and Development, the largest single provider of long-term finance in the Russian power sector, is lending €40 million to increase the efficiency of heat and electricity production at one of the main power stations serving the city of St Petersburg.
EBRD President Jean Lemierre said the deal, the fifth such project to be financed by the Bank, brings total EBRD lending to the Russian power sector to nearly €340 million and underscores the Bank’s commitment to restructuring this crucial sector of the economy.
Speaking at a signing ceremony in St Petersburg, Mr. Lemierre added that the EBRD welcomes the commitment made by Lenenergo to foster a dialogue with investors through the creation of a restructuring committee on which the utility’s largest shareholder, RAO UES, Lenenergo’s management, minority shareholders and the EBRD will be represented.
The seven-year loan to Lenenergo, the power utility for St Petersburg and the surrounding region of Northwest Russia, will be used to finance the completion of a combined heat and power unit at its TETS-5 power station in the city, replacing equipment from the 1920s. TETS-5 provides heat and electricity for 500,000 of St. Petersburg’s 4.8 million residents in a major industrial area of the city.
The Lenenergo loan follows a $70 million loan to the Moscow regional utility Mosenergo last year, highlighting the Bank’s growing involvement in the implementation of the sector’s restructuring at the regional level.  Â
The new unit to be built by Lenenergo will also bring about significant environmental benefits, including a reduction of air and water pollution. Â
Apart from last year’s $70 million Mosenergo loan, the EBRD lent Mosenergo $30 million in 1998 and in 2001 advanced a €100 million loan to the Russian power monopoly RAO UES, the parent company of both Mosenergo and Lenenergo. In 1997, the Bank lent $100 million to finance the construction of a geothermal power station in the Kamchatka Peninsula in the Russian Far East.
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