A long-term RUB 4 billion (equivalent to EUR 100 million) EBRD loan will finance the first new power plant to be built in Russia’s Far East border region of Primorsk in the last 30 years, as well as cut coal pollution in the Pacific Ocean port of Vladivostok and reduce greenhouse gas emissions by 700,000 tonnes of CO2 a year.
The EBRD’s 12-year loan to Joint Stock Company “Energy System of East” (ESV), whose maturity is much longer than what commercial banks can at present offer in Russia, is guaranteed by ESV’s parent company, Joint Stock Company “RusHydro,” one of the world’s largest hydro power generating companies.
Speaking at the signing ceremony in Moscow today, the EBRD’s First Vice-President Varel Freeman said this loan will enable the client to achieve an important regional priority by switching its energy source from coal to gas.
As a result, the new state-of-the-art gas-fired power plant will be significantly more energy efficient and will emit less greenhouse gas than the coal-fired capacity it replaces and the project will thus contribute to cutting air pollution in the port city of Vladivostok, Mr. Freeman added.
RusHydro chairman Evgeny Dod, speaking on the same occasion, said this project with the company’s long-standing partner EBRD will inaugurate a new phase in the development of the Russian Far East’s energy sector, increasing its security and providing users at all levels with a reliable energy supply.
The new plant should also serve as a model on how to modernise heat and power generation and supply in an isolated power system, one which could be replicated in other stand-alone Russian power systems, particularly in remote areas.
In 2011, the EBRD provided RusHydro with a 10-year loan of RUB 8 billion to help optimise the balance sheet of its recently acquired ESV subsidiary. Part of the new loan will be used to re-finance the group’s existing debt. The shares of both ESV and RusHydro are traded on the Moscow stock exchange MICEX-RTS.
This loan brings total EBRD investments in Russian power entities since the reform of the sector was launched in 2001 to over EUR 1.7 billion.