Inter RAO Convertible Loan



Project number:


Business sector:

Power and energy

Notice type:


Environmental category:


Approval date:

10 Jul 2012



PSD disclosed:

01 Aug 2012


Translated version of this PSD: Russian

Project Description

A convertible loan of RUB 9.6 billion in favour of JSC Inter RAO UES (Inter RAO). Through this transaction the Company will commit to review and improve its corporate governance architecture, as well as operational and strategic processes in preparation for an international listing and privatisation.

Transition Impact

The main transition impact potential derives from:

  • Setting standards for corporate governance and business conduct through development and implementation of the Corporate Development Action Plan and implementation of the comprehensive corporate level Environmental and Social Action Plan;
  • More widespread private ownership through support in preparation for international listing and subsequent privatisation.

The Client

The Borrower: Inter RAO Credit B.V.– special purpose companies incorporate in Netherlands for the purpose of financing operating activities of the Guarantor.

The Guarantor: JSC Inter RAO UES, a Russian diversified energy holding with main business interests in power generation, supply, trading, and engineering.

EBRD Finance

A convertible loan of RUB 9.6 billion in favour of JSC Inter RAO UES (Inter RAO).

Project Cost

RUB 9.6 billion.

Environmental Impact

This project is Category B under the Bank’s 2008 Environmental and Social Policy. The Project financing includes a convertible loan structure, which may result in the Bank taking an equity stake in the future. The ESDD has identified a number of investments needed to ensure full compliance with National and EU environmental standards, such as Best Available Techniques (BAT) requirements under the EU Industrial Emission Directive (IED). This will require substantial investment in the medium to long term, including many investments that are not currently included in the investment program. An Environmental and Social Action Plan (ESAP) has been designed to set out a road map for the Company to apply EU environmental standards.

As part of this, all new investments will be structured to meet EU Best Available Techniques (BAT) as defined by the EU Industrial Emission Directive (IED).

However, the Company will not attain EU standards at all operating assets within the next 10 years, notably in terms of energy efficiency and reduction of sulphur dioxide emission at coal fired CHP’s and power plants, due to the current tariff structure and the associated cost of such investments as well as the technical condition and age of the plants. Therefore, a derogation from the Bank’s Environmental and Social policy was approved. Nevertheless, as part of the ESAP implementation, the Company has agreed to certain environmental improvements. This will require substantial investment that is not required by Russian national standards and represents a significant environmental benefit in comparison with the current operations.

The Company has also agreed to develop and implement a road map for implementing EU environmental standards. As part of this road map, all new investments are to be structured to meet the EU requirements of Best Available Techniques as defined in the Industrial Emission Directive. The Bank will monitor the implementation of the ESAP, with regular audits in the future. Moreover, throughout this monitoring period, the Bank will work with the Company to seek further opportunities in promoting compliance with EU regulations.


Business opportunities

For business opportunities or procurement, contact the client company.

For state-sector projects, visit EBRD Procurement: Tel: +44 20 7338 6794

General enquiries

EBRD project enquiries not related to procurement:
Tel: +44 20 7338 7168

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Text of the PIP

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