Project description
and objectives:
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This EBRD loan facility of US$ 100 million will provide one year’s working
capital to four Ukrainian state-owned generation companies, with the proceeds
advanced under an APEX type structure, which is well tested in the Bank. The
proceeds of the loan are to be used for the purchase of fuel for this coming
winter. As is usual with APEX structures, the EBRD will make a loan to an
intermediary that will on-lend the proceeds of the loan in back-to-back
arrangements to four separate generation companies who will repay the loans
from funds due to them from the Energomarket collections. In this case, the
EBRD will make a sovereign loan to Ukraine, which will act as the
intermediary. The fuel purchased with the proceeds of the EBRD loan must be
procured following the EBRD’s Procurement Policies and Rules. Proceeds will be
disbursed against firm supply contracts directly to the fuel suppliers winning
open, competitive tenders.
The operation’s objective is to increase transparency of fuel purchase process
and to support the restructuring of the Ukrainian power sector bypromoting
transparency in recently instituted measures to improve cash collection and
promote privatisation of power distribution companies.
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Transition
impact:
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The conditions of the loan have been tailored to achieve a transition impact
in three specific areas: system cash flow and collections, privatisation, and
fuel procurement.
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The client:
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Government of Ukraine
Four State-Owned Thermal Generation Companies ("Gencos"), to receive fuel and
repay loan:
Dniproenergo
Donbasenergo
Zakhidenergo
Tsentrenergo
With a combined capacity of 28,120 MW, these companies represent 55 per cent
of Ukraine’s installed generating capacity and, although managerially
autonomous, are majority state owned.
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EBRD
finance:
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US$ 100 million loan (€111 million) with a tenor of one year and repayments of
six equal monthly installments following a grace period of six months.
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Total project cost:
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The total loan will account for less than 10 per cent of the generating
companies annual fuel requirements, but will serve to establish minimum
inventory before the winter months make delivery difficult.
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Environmental impact:
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The project was screened B0. The key environmental issues associated with this
project are air emissions and solid wastes (ash) generated from the use of
fuels purchased under this loan. It is envisaged that the Bank's Fuel
Procurement Adviser will identify realistic minimum fuel quality standards
which will ensure that emissions/wastes do not exceed current levels and are,
if possible, below those levels.
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Technical
cooperation:
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TC funding has been used for a due diligence report on fuel procurement
practice and a design of procurement strategy.
The source of funds, €46,640, is the UK Department for International
Development (Fund for Eastern Europe and Central Asia) under the Projects
Preparation and Monitoring Support for Power/Energy Utilities Framework TC.
For consultant opportunities for projects financed by technical cooperation
funds, visit procurement
of consultants.
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EBRD contact:
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Olga Yeriomina, Operation Leader: yeriomio@ebrd.com
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Procurement or tendering
opportunities:
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Visit EBRD Procurement
Enquiries: Tel: +44 20 7338 6794; Fax: +44 20 7338 7472, Email: procurement@ebrd.com
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General
enquiries:
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EBRD project enquiries not related to procurement:
Tel: +44 20 7338 7168; Fax: +44 20 7338 7380
Email: projectenquiries@ebrd.com
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