Dushanbe Energy Loss Reduction Project

Location:

Tajikistan

Project number:

51667

Business sector:

Energy

Notice type:

State

Environmental category:

B

Approval date:

08 Dec 2020

Status:

Approved

PSD disclosed:

27 May 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

The provision of a sovereign guaranteed loan of up to US$ 25 million to OJSC "Shabakahoi taksimoti bark" to finance development of advanced metering infrastructure and low- and medium-voltage grid enhancement in the cities of Dushanbe, Buston, Dangara, Panjakent, Konibodom, Isfara and Istaravshan in Tajikistan.

Project Objectives

The Project's principal objectives are to: (i) address most urgent needs for the replacement of aged infrastructure, (ii) contribute towards the reduction of distribution network losses resulting in financial and CO2 emissions savings, and (iii) introduce modern billing and metering infrastructure, improve payment discipline and cash collection, supporting operational and financial efficiency and sustainability of the distribution sector. 

Transition Impact

-         Resilient (primary): Under the Project, the Bank will continue to support regulatory reform in the energy sector with the overall purpose to introduce clear and transparent energy regulation in the country, ensuring the sustainable and market-based functioning of the energy sector of Tajikistan.

-         Inclusive (secondary): The Project is expected to help address the key transition challenge of youth unemployment by creating dual learning opportunities, establishing more institutional routes for the school-to-work transition and delivering accredited certification of learning outcomes.  

Client Information

SHABAKAHOI TAKSIMOTI BARK OJSC

The sovereign guaranteed loan will be provided to OJSC "Shabakahoi taksimoti bark" established as part of Barqi Tojik unbundling.

 

EBRD Finance Summary

USD 25,000,000.00

Total Project Cost

USD 110,267,000.00

Additionality

  • Financing structure:  Long-term financing for large infrastructure projects is currently unavailable from local commercial banks.
  • Risk Mitigation, Policy and Regulatory Change and Knowledge, Innovation and Capacity Building:  the Bank's technical and institutional expertise with the turnaround of utilities, policy dialogue work and TC. 
  • Standard-setting: helping projects and clients achieve higher standards:  EBRD will introduce high standards beyond local requirements and practices on ESAP, procurement and gender mainstreaming activities.  

Environmental and Social Summary

Categorised B (2014 ESP). The environmental and social impacts associated with the modernisation of the power distribution grid in seven large cities and their surroundings have been identified and will be managed by the implementation of an Environmental and Social Action Plan (ESAP), which has been agreed with the Client.  The Bank's due diligence was carried out remotely by an independent consultant in accordance with ESD Covid19 guidelines; it included the review of an information package supplied by the client and information gathered during the Khatlon project.

The Project includes advanced metering infrastructure, low-voltage and medium-voltage enhancement.  It is not subject to an environmental impact assessment under the legislation of Tajikistan or would be under the EU EIA Directive.  An existing PIU (under BT) will help implement the Project.  Support will be needed at the City Electricity Network Companies level (CENC).  The ESAP includes overarching measures such as (i) the designation in each CENC of a person in charge of the implementation of the ESAP, (ii) the development and operation of an environmental and social management system, and (iii) the implementation of a stakeholder engagement plan.

The ESDD confirmed that the Project is structured to comply with the Bank's PRs and the Company has the institutional capacity to  implement the Project with the help of the existing PIU, and with additional support through the implementation of the ESAP.  Overall,  the ESDD indicated that BT activities are currently driven by the obligation to comply with the applicable regulation of Tajikistan only.  The main E&S risks are occupational health and safety (very poor practices observed on site), the demobilisation of the fee collectors (a retrenchment plan is required) and the stakeholder engagement associated with the introduction of new payment methods (advanced metering).  

At BT level, the application of the labour code is done through a collective agreement that is specific to BT and covers all employees; it is accessible on BT intranet.  BT has a formal workers' organization.  The installation of advanced meters will result in a reduction of the work for fee collectors, and subsequently CENCs to reduce their staff because of the Project. The numbers of jobs to be cut (at least 10% of the number of workers in each establishment) is significant, and triggers the requirement for the preparation and implementation of a retrenchment plan in line with PR2 and EBRD template.  The retrenchment plan will be prepared by the Company.  It is estimated that 598 meter reader jobs will be cut, 125 of them are expected to be assigned other jobs within BT, and 473 would be definitely dismissed.  The ESAP also requires the Company to develop and implement a non- discrimination, equal opportunity and sexual harassment policy.

The elimination of pollution sources within the premises of seven CENCs, essentially related to oil and oil waste management, as well as to the presence of asbestos, is also included in the ESAP.  The annual reduction of GHG emissions due to the Project is estimated to 1,904 tCO2eq/year.

The Project includes the use of safer modern equipment (such as insulated cables), and the construction and operation will not generate any additional public health risks.  As of today, the observations made on site showed a quasi-absence of adequate OHS measures on site.  The Project implementation will be an opportunity to improve OHS conditions for BT workers, including an improvement of the OHS management system, the provision of the personal protection equipment and a refurbishment/reconstruction of the technical buildings (workshops, storages, substations facilities) in the seven CENCs.  Before starting any construction activities, the contractor that will implement the project's construction/rehabilitation activities will have to prepare a Health, Safety and Environment Management Plan.

According to the Feasibility Study, no land acquisition or resettlement impacts are expected.

The ESAP includes measures to protect biodiversity at Project and Corporate level with measures to eliminate electrocution risks for birds, as some of the Project cities are located close to internationally recognized "Important Bird Areas" that host IUCN Red-listed bird species.

The primary objective of the Project is to reduce grid losses.  These grid losses that will be reduced are of both technical and commercial origin.  With the introduction of advanced metering and modernization of networks, the billing chain and the payment methods will change, and the disconnection of non-payers will be readily and remotely implemented.  The overall change is expected to be positive for consumers, but there is a risk that some consumers will find it difficult to understand or adapt to the new system.  The stakeholder engagement plan (SEP) that was prepared for the Project includes a commitment to disseminate information about the new system, and to implement a grievance mechanism.  In addition, the ESAP requires a one-year transition period to be put in place, during which customers who have not paid their bill within the set 5 days limit will be contacted directly by the CENCs i with a main objective to identify vulnerable customers.

The ESAP also requires developing and implementing an environmental and social management system (ESMS) aligned to ISO14001 and ISO45001 standards at corporate level; and appointment of an EHSS manager at corporate level.  The Bank will monitor implementation of the ESAP through review of Annual Environmental and Social Reports (AESR) and communications with the Company as necessary.

Technical Cooperation and Grant Financing

  • Consultancy support for environmental due diligence of the Project to be financed by the SSF in the amount of EUR 20,000.
  • Gender assessment to be financed by the SSF in the amount of up to EUR 75,000.

Company Contact Information

Shabakahoi taksimoti bark

PSD last updated

07 Dec 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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