The provision of a loan of €81.6 million to the Republic of Uzbekistan to be on-lent to JSC "Sirdarya Thermal Power Plant" ("Sirdarya TPP"), JSC "Tashkent Thermal Power Plant" ("TashTES"), JSC "Navoi Thermal Power Plant" ("Navoi TPP"), JSC "Talimarjan Thermal Power Plant" ("Talimarjan TPP") and JSC "Takhiatash Thermal Power Plant" ("Takhiatash TPP") to finance their working capital and operational liquidity needs. These joint stock companies are incorporated in the Republic of Uzbekistan and owned by the state power generation company JSC "Thermal Power Plants" (the "Company", or "TPP").
The loan proceeds will be used to finance working capital and operational liquidity needs of the TPP subsidiaries in the context of the EBRD COVID-19 crisis response. The Project will combine long-term reform objectives with an immediate response to the COVID-19 impact by supporting the companies with a liquidity injection while contributing to the corporatisation and commercialisation of the power generation sector. The project is developed under the Vital Infrastructure Support Programme (VISP), which is part of the EBRD COVID-19 Solidarity Package.
ETI score: 65
ETI 65. The Project is expected to contribute to the Resilient and Well-Governed Transition Impact qualities. The Project in the first place aims to guarantee the operations of the sector throughout the restructuring process and to preserve the transition momentum in times of the COVID-19 crisis, bolstering the Bank's ongoing cooperation with the Company. The Project includes measures targeting improvement of corporate governance at the subsidiaries and TPP through corporate governance and financial management capacity building assistance, including in climate corporate governance, gender and inclusion-related matters.
The state power generation company JSC "Thermal Power Plants"
EBRD Finance Summary
A €81.6 million loan to the Republic of Uzbekistan, to be on-lent to JSC "Sirdarya Thermal Power Plant", JSC "Tashkent Thermal Power Plant", JSC "Navoi Thermal Power Plant", JSC "Talimarjan Thermal Power Plant" and JSC "Takhiatash Thermal Power Plant" - the subsidiaries of the state power generation company JSC "Thermal Power Plants" (the "Company"). The Company is a successor to the now-unbundled JSC "Uzbekenergo" in charge of gas-fired power generation in Uzbekistan.
Total Project Cost
Financing structure: EBRD financing covers a financing gap caused by adverse market conditions and the COVID-19 impact, as financing from local commercial banks is constrained by the country-wide liquidity squeeze.
Standard-setting: helping projects and clients achieve higher standards: The client will benefit from EBRD's expertise in gender-sensitive corporate governance and financial standards.
Knowledge, Innovation and Capacity Building: the Bank's technical, institutional and regulatory expertise are material to the timely realisation of the Project's objectives.
Environmental and Social Summary
Categorised B (2019 ESP) and High risk due to both the age and complexity of infrastructure operated by the Company, as well as to the environmental risks related to the gas power plant decommissioning commitments agreed with the Company to reduce its environmental footprint. Due to international travel restrictions and strict quarantine measures implemented by the government of Uzbekistan to contain the COVID-19 pandemic, there have been limitations to the scope of the appraisal; and in line with agreed COVID-19 ESDD approach for High Risk Projects, all findings will need to be verified through a site visit once the quarantine measures are lifted (either before or after signing of the Project). The ESDD was finalised and the ESAP was agreed. Restructured SEP has been prepared taking into account COVID related restrictions. A set of best practice guidelines for the future decommissioning will be shared with the Company for adoption. The project is consistent with the GET approach and the GET share is 39%. The GET rationale is driven by the Company's commitment to decommission 3 gas power generation units of 450 MW overall capacity ahead of their physical lifetime. This will accelerate the low carbon pathway of the power sector in Uzbekistan, in line with the 2050 sector strategy for decarbonisation. Decommissioning activities will need to comply with the EBRD ESP. The Bank will assist the Company with a TC providing guidance on full decommissioning in line with the international best environmental practice. The ESDD was based on review of the environmental & social documentation, phone and video interviews with relevant management and personnel of JSC TPP and the subsidiaries, in addition to review of video footage of selected plant installations. Due diligence has identified opportunities to introduce integrated management systems which should optimise the implementation of ISO requirements related to environmental protection, quality control, occupational health and safety. Currently environmental management functions are mainly the responsibility of the Environmental Impact Control Division (EICD) at the JSC TPP corporate level. It is envisaged that the ESAP will enhance EICD capacity so they can play a more prominent role in planning and conducting environmental activities as part of any investment projects. Currently monitored environmental parameters do not allow assessing full compliance with the EU Industrial Emissions Directive. Given the age of the facilities, and ongoing and planned modernisation activities, a TC supported BAT assessment should be conducted to identify critical non-compliance areas and improvements needs. Long-term measures will also need to be developed to address presence of asbestos-containing materials and other elements that can pose significant health and safety and environmental pollution risks if not managed safely. Working conditions are regulated by national labour legislation. Grievance procedure needs to be revised in line with PR2 to allow for anonymous grievances. ESDD findings suggest that there are elevated risks of employees being involved in cotton harvesting. It is therefore proposed that an external labour monitoring is conducted during the cotton harvesting season
Technical Cooperation and Grant Financing
Technical Cooperation funds may be sought to support Project preparation and implementation.
Company Contact Information
JSC "Thermal Power Plants", Foreign Economic Relations and Investments Department - Zafar Turaev
+998 71 230 9569
23 Bunyodkor Avenue 100097 Tashkent, Uzbekistan
PSD last updated
11 Dec 2020
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Independent Project Accountability Mechanism (IPAM)
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