Translated version of this PSD: Russian
Project description and objectives
The EBRD is considering providing a loan of up to EUR 4 million to finance an Oshelectro investment program for the period 2015-2017. The program is aimed at the rehabilitation and modernization of low and medium voltage networks, including installation of number of smart meters in Osh and Batken regions in the south of Kyrgyzstan. The project will improve the reliability of the power supply and will significantly reduce technical and commercial losses.
With this investment the Bank will initiate a restructuring process of a public utility in order to improve operating efficiency and restore financial health. On top of the expected improvement in the operating performance, the Project will entail commercialisation of the Company’s operations and increased transparency. This will be achieved via a TC support to review current billing and collection practices, as well as help with implementation of the restructuring process. In addition, the Bank will request an annual IFRS audit by a reputable audit firm and compliance with the ESAP. The Project will increase revenue collections and introduce more commercial business practices. It will also address energy efficiency improvements, reduction of commercial losses and increasing reliability of power supply.
The expected transition impact rating is ‘good’.
The loan is made to the Kyrgyz Republic, to be on-lent to state-owned Oshelectro electricity Distribution Company.
A sovereign loan of up to EUR 4 million to the Ministry of Finance of the Kyrgyz Republic. It is expected that the project will be co-financed by international donor’s funds.
Total project cost
The total project cost is EUR 6 million including technical cooperation fund.
Environmental and social categorisation, impact, and mitigation
Category B Environmental and social issues associated with the upgrade of existing distribution networks and smart metering can be readily assessed and mitigated as part of an Environmental and Social Due Diligence (“ESDD”). The ESDD will focus on social issues (quality of service, increase of tariffs), work conditions and occupational health and safety. The Bank will work with the Company in developing effective stakeholder engagement procedures. An ESAP will be prepared and agreed with the Company before signing of Loan Agreement.
The following technical cooperation is envisaged to go along with the project:
TC technical and EE audit and project preparation will be provided using the existing framework programme for the sustainable development of the power sector
TC to conduct legal and environmental due diligence
TC to hire a consultant to help implement the project
TC to hire a consultant to develop a Corporate Development Program to improve billing and collection and other management practices.
For business opportunities or procurement, contact the client company.
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Text of the PIP