A 10-year $75 million EBRD loan will finance the construction of a combined heat and power plant in the east Siberian city of Krasnoyarsk which is expected to improve energy efficiency and cut pollution by 14 percent thanks to the use of more environmentally-friendly technologies.
The borrower is TGK-13, a regional generating company controlled by Russia’s largest coal producer, SUEK. The EBRD loan is covered by a corporate guarantee from SUEK. TGK-13’s shares are traded on Russia’s MICEX and RTS exchanges.
The transaction is an integral part of the EBRD’s strategy to support private companies operating in Russia’s liberalised power market through a Bank programme funding projects bringing significant environmental benefits and energy efficiency gains.
This deal is very important for SUEK since this EBRD loan will help realise one of the group’s high-priority investment projects in the power sector, commented Sergei Mironosetskiy, SUEK’s Director for the Power Sector, Mergers and Acquisitions.
Krasnoyarsk’s new coal-fired unit is expected to cut carbon dioxide emissions by 237,000 tonnes of CO2 a year, the equivalent of the annual pollution created by 100,000 cars on the streets of London. The new power plant will allow the City of Krasnoyarsk to stop using obsolete and energy-wasteful old boilers, including electric-powered ones.
This project will bring cleaner, more efficient and more reliable energy supply to the City of Krasnoyarsk, demonstrating EBRD's commitment to expand its operations in this important region of Russia, said Nandita Parshad, Director of the EBRD’s Power and Energy team.
It is the Bank's first project with SUEK, and we are proud to assist SUEK and TGK-13 with the implementation of the best available environmental and technical standards in Russia as part of this project, Ms. Parshad added
The deal brings to over $1.9 billion the amount invested by the EBRD in the Russian power sector since 2001 through 12 transactions, including this one.
The Russian power sector is the world’s fourth largest. Of all the country’s energy consumers, it offers the greatest potential for energy efficiency improvements and emission reductions. This is mainly due to the advanced age of installed equipment and an almost total lack of investment in new generating assets over the last 20 years.
TGK-13, which was privatised in 2008 as part of the reform of the Russian power sector, employs some 7,000 people. Its new Krasnoyarsk unit is expected to generate 1.2 billion kilowatts of electricity a year and 1.8 million Giga Calories of heat.
SUEK is one of the the world’s largest coal companies (91 million tonnes of thermal coal produced in 2008). SUEK employs 35,000 people in the coal sector across Russia.