GrCF2 W2 - Kyiv District Heating

Location:

Ukraine

Project number:

50839

Business sector:

Municipal and environmental infrastructure

Notice type:

State

Environmental category:

B

Approval date:

16 Dec 2020

Status:

Passed Concept Review, Pending Final Review

PSD disclosed:

18 Mar 2020

Project Description

€ 140.0 million loan to Communal Enterprise "Kyivteploenergo" (Company) to finance critical rehabilitation and modernisation of the district heating infrastructure in the city of Kyiv. 

The project is a part of the Green Cities Framework 2 designed to serve as a sector-wide catalyst for addressing environmental challenges in municipalities.

Project Objectives

The Project aims to provide sustainable and efficient operation of the existing combined heat and power plants and boiler houses in the city of Kyiv, improve the reliability of heat transportation, address other critical challenges in rehabilitating and modernizing the city's district heating system, enhance the quality of heat and hot water services to residential and non-residential customers and improve the Company's operational and financial performance and capacity.

Transition Impact

ETI score: 70

The project is part of the Green City Framework 2 (GrCF2). The GrCF2 is a strategic and multi-project approach targeting environmental issues in selected large cities in our countries of operation.

The primary goal is to achieve significant environmental improvements and promote the green transition quality within the relevant cities. The GrCF2 also aims to build necessary capacity and facilitate better coordination among various stakeholders within the relevant cities in order improve the governance, operational efficiency and financial sustainability of the targeted investments and initiatives. These objectives are supported by the development and implementation of a city-specific GCAP identifying and prioritising environmental challenges and ways to address them through targeted investments, services and policy instruments. The project will pursue Green and Well-governed TI objectives consistent with the GrCF2 transition impact.

Client Information

KYIVTEPLOENERGO CE

Communal Enterprise "Kyivteploenergo", a municipal utility wholly-owned by the city of Kyiv, is an operator of the district heating system of the city, which consists of two large gas-fired combined heat and power plants, 15 large and 168 small and medium-sized boiler houses, 2,800 km of district heating networks, more than 9,400 heat substations and a waste incineration plant.

EBRD Finance Summary

EUR 140,000,000.00

Total Project Cost

EUR 140,000,000.00

Environmental and Social Summary

The proposed project has been categorised B in accordance with the 2014 EBRD Environmental and Social (E&S) Policy, as the potential impacts are expected to be site specific and readily identifiable and addressed through mitigation measures. The environmental and social due diligence for the project, which is ongoing, includes an independent third party environmental and social audit to assess the Client's management capacity and systems to manage environment, health, safety and labour issues in its operations and an analysis of the potential (future) E&S impacts and benefits. It will also assess the Client's ability to carry out the Project in compliance with the Bank's Performance Requirements.

An Environmental and Social Action Plan (ESAP) will be prepared for the project, and a Stakeholder Engagement Plan will be developed that will include a grievance mechanism. and information on environmental and social performance and a summary of the agreed Action Plan will be released to stakeholders. This PSD will be updated when the results of due diligence are known.

Technical Cooperation and Grant Financing

Pre-signing:

Initial project preparatory work implemented by USAID through its Energy Security Project included a simplified Pre-Feasibility Study, IFRS-compliant financial audit of the Company, and related project design documentation compliant with Ukrainian standards and regulations.

Technical, financial, environmental and social due diligence funded by Government of Sweden.

Post-signing:

Project Implementation Support Consultant will support the Company in all aspects of project implementation, including preparation of conceptual design, technical specifications, tender documentation, tender evaluation and contract finalisation reporting to the Bank. The Company will hire an additional consultant financed from the loan proceeds to carry out comprehensive technical supervision of construction.

Company Contact Information

Volodymyr Borkovskyi
borkovskyi.vv@kte.kmda.gov.ua
+38 (044) 207-60-86
https://kte.kmda.gov.ua
5 Ivana Franka sq., Kyiv, Ukraine 01001

PSD last updated

08 Apr 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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