Pavlodar SL Modernisation

Location:

Kazakhstan

Project number:

49647

Business sector:

Municipal and environmental infrastructure

Notice type:

Private

Environmental category:

B

Approval date:

17 Mar 2020

Status:

In Exploratory, Pending Concept Review

PSD disclosed:

18 Mar 2020

As per section 1.4.2 (iii) of the Directive on Access to Information: "For Projects approved by Bank management where the Board of Directors has delegated the approval authority, the PSD shall be disclosed at the start of the relevant no-objection notification period to a member country of the Bank in accordance with Article 13 (iii) of the Agreement Establishing the EBRD."

Project Description

In 2019 EverlightAlto consortium (Consortium) consisting of Everlight Electronics Co, Ltd. (Taiwan), A3 Commerce LLP and Altocom Asia LLP (both Kazakhstan) signed its second public-private partnership (PPP) agreement in Kazakhstan with Jambyl Oblast and Taraz City Akimats to modernise and operate street lighting system in the city of Taraz. The EBRD is supporting the PPP project by increasing the second tranche of its facility approved in 2018. Funds will be used to replace 14,000 old street lamps with the LED ones, install street light control cabinets, and automated hardware and software systems for efficient system control in Taraz during 2020.

Project Objectives

The Project aims to achieve better service quality and improved environmental standards thanks to significant reductions in energy consumption, reduced  CO2 emissions and the minimisation of operational and maintenance costs.

Transition Impact

ETI score: 60

The Project falls under the EPFA Street Lighting Modernisation Framework, which seeks to facilitate the modernisation of street lighting systems in cities. It will do so through promoting energy efficiency by replacing existing outdated streetlights with more energy-efficient, modern bulbs, introducing a centralised control system and installing transformation sub-stations and new poles/lighting points. The transition impact originates from wider private sector participation on a well-defined contractual relationship between the owner and the operator, as well as transferring to a lifecycle-cost approach to managing street lighting assets. In addition, the transition impact includes supporting the sector's overall cost-effectiveness (Competitive), as well as Green components by installing more energy-efficient technologies.

The Project qualifies as a positive climate change mitigating activity and fully aligns with the Bank's Green Economy Transition Approach (BDS15-196(F)).

Client Information

EVERLIGHT ELECTRONICS CO LTD

EverlightAlto Consortium (Consortium) consisting of Taiwanese Everlight Electronics Ltd. (Taiwan) and Kazakhstan-based A3 Commerce LLP and Altocom LLP of Kazakhstan.

EBRD Finance Summary

KZT 3,924,950,016.00

Second tranche of KZT 2.427 billion (€ 5.7 million equivalent). This is the expansion of the original facility totalling KZT 3.9 billion (€ 9.2 million equivalent).

Total Project Cost

KZT 5,817,009,152.00

Additionality

EBRD is additional as a commercial financing with long tenors on a non-sovereign basis for PPP is not yet available in the local market. In addition, EBRD's extensive knowledge of the street lighting sector's institutional and operational setup in the region and good relations with the Government make the Bank additional for Everlight as it enters the market of Kazakhstan.

Environmental and Social Summary

The project is categorised B in accordance with the Bank's 2014 Environmental and Social Policy.  Environmental and social due diligence (ESDD) was carried out by independent external consultants for both Pavlodar and Taraz as part of the Feasibility Study and included review of the Consortium's corporate management systems, current operational performance and the risk management plans for the planned investment programme against the Bank's Performance Requirements (PRs).  The ESDD found that the E&S impacts associated with the refurbishment of public and street lighting and replacing existing mercury-based lamps with modern energy-efficient LED lamps will be mainly positive, resulting in energy savings and improved street safety conditions.  The project will result in better quality and reliability of the street lighting services in both cities, improved environmental standards due to significantly reduced energy consumption, greenhouse gas emissions reduction by estimated 5,220 t/a for Pavlodar and 6,321  t/a of CO2 for Taraz, and reduced operating and maintenance costs, as well as improvements to road safety and security for the local population in the City through better lighting and improved visibility on the streets.  Potential future adverse impacts of the project will be limited and site specific and will be addressed through appropriate mitigation measures included in the Environmental and Social Action Plan (ESAP) for each city.

 

The ESDD confirmed that the Consortium has limited corporate management systems and capacity currently in place to manage their environmental, health and safety (EHS) issues in line with EBRD PRs.  The Consortium will need to apply an integrated environmental and social management system (ESMS), in line with ISO 14001 and OHSAS 18001 international standards and employ a designated EHS manager.  A detailed E&S management plan has been prepared for the Project.  A detailed waste management plan for the project will need to be prepared by the Client to ensure that project generated waste is sorted, temporarily stored, collected, transported and treated in a way that does not adversely affect public health and the environment.  The Consortium is also required to ensure that the old lamps, cable parts, and replaced equipment are appropriately disposed of.  It is expected that a compact specialised de-mecurization plant run by specialised external company will be used for safe disposal of any hazardous components of the old lamps.

 

The Consortium will undertake to ensure the ESAP is implemented including at the level of sub-contractors.  The work contracts will stipulate that all sub-contractors should have suitable human resource (HR) and health and safety (H&S) policies and procedures aligned with EBRD PR2&4, adequate E&S Management Plan for the construction activities and the refurbishment phase, including adhering to safe storage and disposal of the old mercury and HPS lamps.  The Consortium will need to adopt preventative management of health and safety risks to workers and public safety, and adequate mitigation of road safety issues through appropriate temporary traffic and safety arrangements during the refurbishment works, to maintain compliance with the national regulatory requirements at all times as well as to structure the project to meet the Bank's PRs.  The Consortium also needs to finalise and implement a Stakeholder Engagement Plan (SEP), including a grievance mechanism, to ensure adequate information disclosure to affected stakeholders locally prior to the commencement of works.  The above measures have been included into the Environmental and Social Action Plan (ESAP) that will be included into legal agreements with the Consortium.  In order for the Consortium to monitor compliance with the ESAP and the E&S performance of its sub-contractors, the Consortium should ensure adequate internal capacity and employ an Environmental, Health and Safety (EHS) Manager on a part-time basis or ensure an EHS manager is part of a sub-contractor.

 

A non-technical summary (NTS) has also been prepared for both projects; NTS and SEP have been disclosed on Akimat's websites (http://www.akimat-pvl.gov.kz/post.php?id=791 ; http://www.akimat-pvl.gov.kz/cat.php?id=62).  The project will be monitored in terms of its environmental and social performance and implementation of the respective ESAPs through annual environmental and social reports as well as site visits when deemed necessary.

Technical Cooperation and Grant Financing

None

Company Contact Information

Cooke Huang
cookehuang@everlight.com
+886-2-2685-6688

PSD last updated

18 Mar 2020

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 how to submit a Request for review through our confidential online form, by emailmail or telephone. IPAM is available to discuss your concerns and answer any questions you may have about the submission or handling of Requests, which follow the Project Accountability Policy and Guidance. Requesters’ identities may be kept confidential, upon request.

 

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