Chakan GES Modernization

Location:

Kyrgyz Republic

Project number:

53600

Business sector:

Energy

Notice type:

State

Environmental category:

B

Approval date:

14 Dec 2022

Status:

Passed Final Review, Pending Approval

PSD disclosed:

23 Sep 2022

Project Description

Provision of a sovereign loan of up to EUR 8.8 million to the Kyrgyz Republic ("KR") to finance the reconstruction and rehabilitation of Lebedinovskaya HPP unit owned by Chakan GES, a local power plant operation with a total installed capacity of 38.5 MW, fully-owned subsidiary of the Kyrgyz Republic.

Project Objectives

The project is aimed to utilize the full potential of the HPP units that would increase the electricity output and support mitigating the hydrology risk.

Transition Impact

ETI score: 67

The Transition Impact of the project will be derived from:

Green

The Project will contribute to the efforts in solving the long-lasting operational issues in the aged and inefficient HPP infrastructure through the rehabilitation program.  Modernization of renewable energy sources will result in a more resilient power sector in the country, ensuring a more reliable power supply.

Well-Governed

The Project will help materializing policy dialogue activities with the government and power sector players, such as developing regulatory framework for the renewable energy sector.

Client Information

KYRGYZ REPUBLIC SOVEREIGN

EBRD Finance Summary

EUR 8,800,000.00

Total Project Cost

EUR 13,800,000.00

Additionality

The Bank's additionality mainly derives from: (i) long tenor structure suitable for the long-term nature of the project that is not available in the market from commercial sources, (ii) the Bank's expertise on the best international procurement standards and the Project will adhere to the EBRD's procurement policies and rules, and (iii) triggering a change in the policy and regulatory framework in the country.

Environmental and Social Summary

The project has been Categorised B in line with EBRD's 2019 Environmental & Social Policy with medium low risk. As it is a rehabilitation project that it is not greenfield nor a major expansion, the proposed project does not meet the definition of a Category A project as per the ESP.  This approach is consistent with EBRD's Guidance Note on Hydropower Projects.

The E&S due diligence (ESDD), carried out by an independent consultant, confirmed that there are no major and long term environmental or social impacts or risks associated with the Project. However, ESDD identified some areas that the Company needs to focus on and an ESAP has been developed and agreed with the Company.  The construction and operation of the HPPs does not expose surrounding communities to major industrial accidents or flood risks in normal operation conditions. However, the HPPs flood routing capacity should be re-assessed in the context of the rehabilitation, considering modern standards and also climate change.

Key ESAP actions include: establishing and run a corporate ESMS covering the  operation of all HPPs operated by Chakan GES, including annual internal performance audits and continuous improvement action, measures for contractor management and monitoring, measures to align the client labour provisions to EBRD PR2 (Update of the  Human resource Policy, worker grievance mechanism, promotion of non-discrimination and equal opportunity actions, improve workers accommodation) as well as enhancing workers and contractor health and safety, public safety, waste management, air quality, traffic management and development of an internal and external grievance mechanism.  

The Company will be required to provide annual reporting on the implementation of the ESAP and compliance with the PRs.

Technical Cooperation and Grant Financing

Following TC supports have been obtained:

-        Technical Due Diligence including feasibility study and early stage engineering design, funded by Sustainable Infrastructure Fund (the "SIF");

-        Environmental and Social Due Diligence including preparation of Environmental Social and Action Plan ("ESAP"), funded by the SIF.

It is also envisaged that other TC supports for this project will be provided to assist the Client with the (i) procurement and the implementation of the project to ensure timely and cost effective implementation and compliance with EBRD's Procurement Policies and Rules, and (ii) implementation and development of an enabling policy framework for small-scale HPPs in Kyrgyzstan.

Furthermore, subject to availability, the EBRD intends to mobilize grant funding of up to EUR 5 million from international donors and/or the EBRD Shareholder Special Fund.

Company Contact Information

Emil Mukhambetov
oprchakanges@gmail.com
+996312901544
+996312901623
www.chakanges.kg
Bishkek city, Suvorov street 113 Kyrgyz Republic

PSD last updated

01 Nov 2022

Understanding Transition

Further information regarding the EBRD’s approach to measuring transition impact is available here.

Business opportunities

For business opportunities or procurement, contact the client company.

For business opportunities with EBRD (not related to procurement) contact:

Tel: +44 20 7338 7168
Email: projectenquiries@ebrd.com

For state-sector projects, visit EBRD Procurement:

Tel: +44 20 7338 6794
Email: procurement@ebrd.com

General enquiries

Specific enquiries can be made using the EBRD Enquiries form.

Environmental and Social Policy (ESP)

The ESP and the associated Performance Requirements (PRs) set out the ways in which the EBRD implements its commitment to promoting “environmentally sound and sustainable development”.  The ESP and the PRs include specific provisions for clients to comply with the applicable requirements of national laws on public information and consultation as well as to establish a grievance mechanism to receive and facilitate resolution of stakeholders’ concerns and grievances, in particular, about environmental and social performance of the client and the project. Proportionate to the nature and scale of a project’s environmental and social risks and impacts, the EBRD additionally requires its clients to disclose information, as appropriate, about the risks and impacts arising from projects or to undertake meaningful consultation with stakeholders and consider and respond to their feedback.

More information on the EBRD’s practices in this regard is set out in the ESP.

Integrity and Compliance

The EBRD's Office of the Chief Compliance Officer (OCCO) promotes good governance and ensures that the highest standards of integrity are applied to all activities of the Bank in accordance with international best practice. Integrity due diligence is conducted on all Bank clients to ensure that projects do not present unacceptable integrity or reputational risks to the Bank. The Bank believes that identifying and resolving issues at the project assessment approval stages is the most effective means of ensuring the integrity of Bank transactions. OCCO plays a key role in these protective efforts, and also helps to monitor integrity risks in projects post-investment.

OCCO is also responsible for investigating allegations of fraud, corruption and misconduct in EBRD-financed projects. Anyone, both within or outside the Bank, who suspects fraud or corruption should submit a written report to the Chief Compliance Officer by email to compliance@ebrd.com. All matters reported will be handled by OCCO for follow-up. All reports, including anonymous ones, will be reviewed. Reports can be made in any language of the Bank or of the Bank's countries of operation. The information provided must be made in good faith.

Access to Information Policy (AIP)

The AIP sets out how the EBRD discloses information and consults with its stakeholders so as to promote better awareness and understanding of its strategies, policies and operations following its entry into force on 1 January 2020. Please visit the Access to Information Policy page to find out what information is available from the EBRD website.

Specific requests for information can be made using the EBRD Enquiries form.

Independent Project Accountability Mechanism (IPAM)

If efforts to address environmental, social or public disclosure concerns with the Client or the Bank are unsuccessful (e.g. through the Client’s Project-level grievance mechanism or through direct engagement with Bank management), individuals and organisations may seek to address their concerns through the EBRD’s Independent Project Accountability Mechanism (IPAM).

IPAM independently reviews Project issues that are believed to have caused (or to be likely to cause) harm. The purpose of the Mechanism is: to support dialogue between Project stakeholders to resolve environmental, social and public disclosure issues; to determine whether the Bank has complied with its Environmental and Social Policy or Project-specific provisions of its Access to Information Policy; and where applicable, to address any existing non-compliance with these policies, while preventing future non-compliance by the Bank.

Please visit the Independent Project Accountability Mechanism webpage to find out more about IPAM and its mandate; how to submit a Request for review; or contact IPAM  via email ipam@ebrd.com to get guidance and more information on IPAM and how to submit a request.

 

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