EPS Smart Metering Expansion

Location:

Serbia

Project number:

51299

Business sector:

Energy

Notice type:

State

Environmental category:

B

Approval date:

16 Dec 2020

Status:

Concept Reviewed

PSD disclosed:

16 Sep 2020

Project Description

Provision of up to EUR 40 million-debt financing on sovereign basis to the state-owned utility company Public Enterprise Elektroprivreda, Serbia ("EPS") to support the first phase of roll-out of electricity smart meters in the Serbian distribution system.

Total project cost is estimated at EUR 80 million and EBRD's loan will be co-financed with the EIB (the "project").

Project Objectives

The project will support the introduction of Advanced Metering Infrastructure ("AMI"), including modern meters together with related infrastructure, software, communications equipment, installation and integration systems. The roll-out of smart metering in Serbia will make a significant contribution to a wider grid modernisation programme aimied at the development of a smart grid and the reduction of technical and commercial losses as well as the better integration of distributed renewable generation sources in the system. Furthermore, the enhanced functionality of smart meters will improve demand side management and lead to more efficient energy consumption.

Transition Impact

ETI score: 60

The transition impact arises from the Resilient and Green TI qualities. The introduction of AMI is expected to lead to a wide range of quantitative (financial) and qualitative benefits.

These include (i) a reduction in network losses, (ii) an increase in bill collection rates, (iii) savings on meter readings, (iv) optimised power usage and a reduction of peak power, (v) better detection of fraud and estimation of billing, and (vi) an improved environment for prosumers to engage with the Serbian power system.

Associated reductions in CO2 emissions is estimated to be approximately 5,000 tonnes per annum for the part of the project financed by EBRD.

Client Information

JP EPS BEOGRAD

EPS is a vertically integrated power and mining utility, 100% owned by the Republic of Serbia. EPS operations comprise of electricity generation, management of the electricity distribution network throughout Serbia and supply of electricity consisting of more than 97% of total electricity supply in the country.

EBRD Finance Summary

EUR 40,000,000.00

Up to EUR 40 million sovereign guaranteed loan to be provided to EPS.

Total Project Cost

EUR 80,000,000.00

EUR 80,000,000

Additionality

The EBRD is additional due to the financing structure provided. The Bank offers financing terms that are not available on the market but necessary to structure the project. The EBRD's financing fills the funding gap while also complementing funding from other sources including from the EIB.

Furthermore, through its best practice international procurement standards, the Bank will provide expertise that will strengthen the procurement capacity of the client.

Environmental and Social Summary

Categorised B (2019 ESP). The environmental and social impacts associated with the installation of smart meters are limited and can be readily managed. Due diligence for this Project was undertaken by the ESD specialist and included a review of the technical due diligence report and recent EPS environmental reporting provided for other projects.

The Project involves the installation of smart electricity meters, with the potential for coverage of up to 80% of households when the entire programme is fully implemented. The meters will reduce commercial and technical losses and help to improve the efficiency of electricity supply in Serbia. The first phase to be financed by EBRD is expected to result in a CO2 saving of around 5,000 tonnes per year, and the full programme could save around 68,000 tonnes per year. The installation and operation of the meters should not be associated with significant environmental or social impacts if managed in line with good practice. An ESAP will be agreed with the client requiring them to ensure that customers are aware of the installation programme, are contacted in good time and are able to have faults or grievances rectified quickly. The Bank will be providing TC support for consultants to help EPS in developing an awareness-raising plan and designing communications material. The ESAP will also require that contractors be competent in installing electrical equipment safely and that EPS develop a waste management plan for re-use, recycling or safe disposal of old equipment.

EPS is a long-standing client of the EBRD. The EBRD has provided support to help EPS with it stakeholder engagement, grievance management and occupation safety performance and there have been improvements in these areas. EPS is likely to remain a carbon-intensive energy provider for as long as it is dependent on an inefficient coal-fired generating fleet, but this investment in smart metering will make a meaningful contribution towards modernising the electricity sector in Serbia. The Bank will monitor the Project through environmental and social reports.

Technical Cooperation and Grant Financing

Total amount of EUR 135,000 TC was funded by the Bank's Shareholder Special Fund ("SSF") for the preparation of the update of the Feasibility Study of the Project and for the implementation of consumer awareness campaign in targeted towns in Serbia about the benefits of Smart Metering

Company Contact Information

Sasa Marceta
sasa.marceta@epsdistribucija.rs
www.epsdisribucija.rs

PSD last updated

16 Sep 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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