A senior loan of up to KZT 14 billion (equivalent to EUR 35 million) to support business transformation and development of Mangistauskaya Regional Distribution Company (MREK) following its privatisation by Kazakhstan Utility Systems (KKS), a private power utility in Kazakhstan.
The project will support the modernisation and energy efficiency improvements of distribution networks, including the installation of modern automatic control systems and smart meters. Proceeds of the loan will be used to cover the planned investment programme of newly-acquired MREK alongside a number of retroactively financed capital expenditures.
The project is in line with the Bank's Green Economy Transition (GET) initiative. Modernisation of MREK's facilities will ultimately lead to the improved stability and reliability of energy supply, a reduction of losses and increased potential of the system to support the integration of RES in the national distribution network.
Additionally, the project will increase private sector participation in Kazakhstan's energy sector which is still dominated by 100% state-owned JSC Samruk Energy.
KAZAKHSTAN UTILITY SYSTEMS
KKS is a private, vertically integrated utility company established in 2008 with operations in three segments: electricity and heat generation, electricity and heat distribution and supply in Karaganda, South and East Kazakhstan regions. KKS is rated BB- by Fitch and has more than 10,000 employees.
EBRD Finance Summary
Total Project Cost
Environmental and Social Summary
The project has been categorised B in line with EBRD's 2014 Environmental and Social Policy (ESP). The financing of the investment programme of the newly acquired MREK by the KKS aiming at modernisation of the distribution networks and energy efficiency improvements is associated with E&S issues that can be readily identified. The ESDD will be carried out by an independent consultant and will focus on review of the corporate E&S management systems of KKS and MREK and E&S Assessment of the MREK's investment plan 2016-2020, including any elements that can be potentially categorised differently under the ESP. The risk assessment procedure will be developed to determine E&S issues of the sub-projects of the investment plan. The NTS and SEP will be prepared and published on the Company's website to facilitate information disclosure on the project.
The PSD will be updated following the ESDD completion.
The Bank will provide a TC assignment on a cost sharing basis with the client under the existing framework programme "Green Economy Project Preparation and Implementation Framework". The assignment will review the existing investment programme, confirm appropriateness, perform cost/benefit analyses and make recommendations for improvements.
Company Contact Information
7F, 14/3, Kunayev Street, BC Nursaya, Astana, Kazakhstan 010000
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