TGK-9 Expansion and Privatisation

Overview
Project Summary Document
Environmental and Social Documentation
Procurement
Complaints

Project ID 38241

Status Complete

Location

Russia

Business Sector

Energy

Notice Type

Private

Project timeline

Exploratory
Passed Concept Review
Passed Structure Review
Passed Final Review
Board Approved
Signed
Implementing
Completed

Project ID 38241

Status Complete

Location

Russia

Business Sector

Energy

Notice Type

Private

Environmental Category

Approval Date

18 Sep 2007

Disclosure date

24 Oct 2007

As per section 1.4.2 (iii) of the Directive on Access to Information: "For Projects approved by Bank management where the Board of Directors has delegated the approval authority, the PSD shall be disclosed at the start of the relevant no-objection notification period to a member country of the Bank in accordance with Article 13 (iii) of the Agreement Establishing the EBRD."

Project Description

The project is a purchase of a 5-12% stake in TGK-9, one of Russian power generating companies, from Integrated Energy Systems (IES), one of the largest private Russian strategic investors in the power sector, subject to IES becoming a controlling shareholder in the Company.

TGK-9 is to be privatised through an increase of its charter capital of RUB 17 billion (EUR 486 mln) and the subsequent sale of the Government’s stake in TGK-9.

The project will facilitate the entry of a strategic private investor into one of the Russian power generating companies serving a region of growing electricity deficit and enable TGK-9 to finance the investment programme focusing on rehabilitation of existing facilities and efficiency improvements.

Transition Impact

EBRD will set a standard for private investment into the Russian power sector and will finance the enhancement of generation efficiency, upgrading major CHP assets and efficiently supporting industrial growth. In addition, the Bank will provide political and regulatory comfort to the Sponsor, making the Company more attractive to the investment community, and monitor the Sponsor’s position vis-à-vis minority shareholders.

The Client

TGK-9 is one of Territorial Generating Companies in Russian formed in the process of unbundling of RAO UES. TGK-9 operates heat and electricity generation assets located in the Perm and Sverdlovsk regions, key industrial centres of Russia with rapidly increasing electricity demand, as well as in the Komi Republic.

EBRD Finance

Equity investment of up to USD 200 million (EUR 140 million) equivalent in Russian Roubles.

Project Cost

USD 200 million.

Environmental Impact

Screened C/1.

As the transaction is an equity structure and the Bank’s proceeds will not be directly targeted, only a corporate environmental audit was required to ensure that the Company operations are in compliance with national environmental standards and the Company’s investment programme is structured to allow it to meet EU standards within a reasonable time period.

The Bank retained an international consultant to perform the environmental due diligence, inclusive of site visits to a number of plants and an assessment of key social and labour issues associated with the proposed investment programme. The due diligence assessed the Company’s standing in terms of Russian Federation and EU environmental standards, and provided a benchmark in terms of meeting EU standards such as the EU Large Combustion Plant Directive's emission limits and Best Available Technique’s guidelines for large power plants under the EU Integrated Pollution Prevention and Control Directive (IPPC).

The findings of the due diligence confirmed that the Company is generally in compliance with Russian environmental standards, albeit their is a need to further strengthen the environmental management system at the Company and additional investments are needed in pollution abatement equipment and monitoring systems to ensure future compliance with National standards and EU environmental requirements. Through the investment programme the company will commence a modernisation programme aiming at improving operations and attaining international standards. The three newer CCGT units being considered are structured in line with EU environmental standards and as part of an agreed action plan the Company will undertake appropriate environmental impact assessments, inclusive of public consultations as part of the design process for these plants.

Based on the environmental due diligence, a corporate Environmental and Social Action Plan (ESAP) was developed and agreed with the Company. The ESAP includes among others specific corporate environmental management requirements as well as investments needed to attain Russian Federation and EU environmental standards. The Bank will monitor the project.

Implementation standard

the Company will be required to provide the Bank with an annual environmental report, including updates on the ESAP implementation, and notification on any material accidents or incidents.
the Company will implement the ESAP and an Environmental Management System inclusive if continuous monitoring systems.
the Company will conduct its business with due regard to National and EU environmental standards and regulations
the Company will arrange for periodic environmental audits and monitoring visits by Bank staff or appointed representatives, if and when deemed necessary.

Technical Cooperation

None.

Company Contact

Vitaliy Anikin
Tel: + (342) 240-65-59
Email: anikin_vv@tgc-9.ru
Website: http://www.tgk-9.ru/

PSD last updated

01 Feb 2019

Business opportunities

For business opportunities or procurement, contact the client company.

For state-sector projects, visit EBRD Procurement: Tel: +44 20 7338 6794
Email: procurement@ebrd.com

General enquiries

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

Public Information Policy (PIP)

The PIP sets out how the EBRD discloses information and consults with its stakeholders so as to promote better awareness and understanding of its strategies, policies and operations. Please visit the Public Information Policy page below to find out how to request a Public Sector Board Report.
Text of the PIP

Environmental and Social Documentation is not available for this project.

Selected procurement notices related to this project may be shown below. Further procurement opportunities related to this and other projects, if available, maybe be viewed in the EBRD Procurement Portal.

The EBRD's Environmental and Social Policy (ESP), Access to Information policy (AIP) and Project Accountability Policy (PAP) enable sound and sustainable development in its projects. The Independent Project Accountability Mechanism (IPAM) deals with complaints about environmental, social and disclosure matters related to the Bank’s investments.

No complaints about this project have been made so far.

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