Project summary document

Project description
and objectives:

The proposed project would involve loan to Irkutsk Oblast, a Subject of Federation in Siberian Federal District of the Russian Federation. The project would focus on priority investments to enhance efficiency and cost effectiveness of municipal heat generating facilities including improved security of fuel supply and improve provision of heating services in selected municipalities of Irkutsk Oblast. The project would also finance strengthening of the development of the regional regulatory framework for municipal services sector encouraging private sector involvement.

Transition impact:

The operation will support institutional strengthening of the Oblast Administration in terms of project delivery in public services area, and development of regional regulatory framework for efficient provision of municipal services with the emphasis on private sector involvement, including regional legislation on private sector participation in management of public assets in the Oblast municipalities including concessions, long term leasing and other forms of private sector participation. It will also include development of templates for long term contracts for private sector involvement, reflecting international best practice in respect to operator performance, tariff setting, asset management, termination and conflict resolution. The project will likely have high demonstration effect, as it will be used to improve district heating provision in a number of Oblast municipalities and neighbouring regions are likely to follow the example.

The client:

Irkutsk Oblast.

EBRD finance:

The loan up to RUB 1,000 million (equivalent to ~ EUR 28.6 million) to Irkutsk Oblast.

Total project cost:

RUB 1,370 million (equivalent to ~ EUR 39.1 million).

Environmental impact:

The project has been screened B/1 requiring environmental analyses of the proposed investments.

The environmental analysis indicates that the project will support improvements to a number of local municipal heating systems in the Irkutsk Oblast. This will include refurbishment and upgrade of heat generation equipment with the purpose of changing oil based fuel to local fuel, improving security of fuel supply in the long term, improving efficiency of the boilers, rehabilitation of the networks and heating substation, optimising heat distribution and consumption. The environmental benefits of installation of new efficient heat generation equipment, improvement of the technical infrastructure and operational management are expected allow for better energy efficiency and optimal operation of assets, thereby neutralising environmental impact from the operation of coal fired boilers.

The project will meet Russian environmental, health and safety standards and will contribute towards achieving compliance with relevant EU environmental standards.

Temporary environmental impacts may be generated during construction and land-take, such as increased level of noise, dust and traffic (in the settlements). Such temporary impacts, however, will be minimised through the incorporation of good management practice including forewarning and signing of works, restriction of working hours, development of traffic management schemes offering alternative routes to traffic and pedestrians, etc.

Technical
cooperation:

Loan financed TC:

• Design, Procurement and other implementation support (up to EUR 3.0 million).

Grant financing will be sought for:

• PIU training and initial project implementation support (up to EUR 100,000)
  
  
• Regulatory Improvement Programme for the Oblast aimed at establishment of enabling environment for private sector involvement in provision for municipal services in the Oblast municipalities. (up to EUR 350,000).

Previous Technical Cooperation was financed by the Government of Japan and included:

• The Feasibility Study for the Project was prepared by COWI Consult International (EUR 200,000);
  
  
• Creditworthiness assessment of the Irkutsk Oblast Administration was performed by Ernst & Young (EUR 50,000).

For consultant opportunities for projects financed by technical cooperation funds, visit procurement of consultants.

EBRD contact:

Eugene Ofrikhter, Operation Leader: ofrikhte@ebrd.com

Procurement or tendering
opportunities:

Visit EBRD Procurement
Enquiries: Tel: +44 20 7338 6794; Fax: +44 20 7338 7472, Email: procurement@ebrd.com

General enquiries:

EBRD project enquiries not related to procurement:
Tel: +44 20 7338 7168; Fax: +44 20 7338 7380
Email: projectenquiries@ebrd.com