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EBRD funds modernisation of Lipetsk municipal services
10-year loan to achieve considerable energy savings
The European Bank for Reconstruction and Development is providing a 740 million rouble (equivalent to €20 million) long-term loan to fund the overhaul and modernisation of essential municipal infrastructure in the industrial city of Lipetsk, situated some 400 km south of Moscow. The loan is backed by a municipal guarantee from the city.
The provision of this 10-year loan underlines the importance the EBRD attaches to renewing municipal infrastructure in Russia and the priority this remains for the Bank despite a difficult economic outlook, said Jean-Patrick Marquet, the EBRD’s Director of Municipal and Environmental Infrastructure.
The investments financed by the Bank’s loan will significantly improve the quality of municipal services in the city, particularly in the provision of heating, electricity and water, as well as sewage operations.
The project, once implemented, will result in significant savings through reduced heat, water and power losses, a key priority at a time of high energy prices and scarce financial resources.
Annual energy savings are estimated at more than 15 million kWh of electricity and 3.8 million cubic metres of gas. This will translate into a reduction of 15,000 tonnes of CO2 emissions a year, significantly reducing the city’s carbon footprint.
Individual water and electricity metres are to be installed in Lipetsk as part of an effort to make these municipal services financially self-sustainable.
The borrower is OOO "Lipetsk Municipal Energy Company" (LGEK) and the total value of the project is estimated at 938 million roubles (€25 million) – with the difference being financed by LGEK out of its own funds.
The Novolipetsk Metallurgical Steelworks (NMLK) is the main employers and principal tax-payers in the city, which has a population of approximately 500,000 people.
LGEK is majority controlled by the city of Lipetsk and managed by an experienced team invited over from NLMK. The management team is appointed by the city of Lipetsk and LGEK's minority shareholder - Immenso Enterprise, a private offshore vehicle.
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