The provision of a senior short-term loan of up to € 46 million equivalent in KZT in favour of JSC "Samruk-Energy" ("Samruk-Energy") under the Vital Infrastructure Support Programme (VISP) to provide the borrower with liquidity to overcome any potential temporary drop in revenues and collections in case of further COVID-19 spread in Kazakhstan.
The Loan supports Samruk-Energy in addressing its potential working capital needs in case of further spread of the pandemic across the country.
ETI score: 65
ETI Score: 65
Transition impact is coming from two components: (i) Resilience; and (ii) Gender Inclusion.
JSC "Samruk-Energy" is a key electricity producer in Kazakhstan that accounts for around a third of electricity production in the country, including in the most populated Almaty region, and is a vital infrastructure provider of strategic importance. The total electricity-production capacity of Samruk-Energy is over 6,000 MW, with annual net electricity generation of around 30,000 million kW/h.
The company is owned by Samruk-Kazyna Sovereign Welfare Fund, the largest investment holding in Kazakhstan.
EBRD Finance Summary
KZT 21,400,000,000.00 (EUR 46 million equivalent)
Total Project Cost
KZT 21,400,000,000.00 (€46 million equivalent)
Due to COVID-19's spread across Kazakhstan with the state of emergency declared on 15 March 2020 followed by the lockdown for both individuals and businesses, the economy was hit with the local banks facing liquidity shortages due to delayed payments. In such circumstances, Samruk-Energy's requirement of liquidity may not be satisfied on time. The Bank's short-term facility will support financial security of Samruk-Energy, as a backbone infrastructure provider, and its smoother recovery in case of further deterioration of the pandemic crisis.
Environmental and Social Summary
Category B (2019 ESP). Due diligence on this Project has been undertaken in line with ESD's ESDD approach to the COVID-19 situation, utilising review of existing documentation and Q&A with the client.
Independent ESDD carried out on previous Projects confirmed that the Company has the institutional capacity to implement the Bank's Performance Requirements and has an appropriate EHSS risk management structure which has been independently verified and certified. Overall, the current ESDD has confirmed that the Company is on track in implementing the existing ESAP and has maintained its institutional capacity.
The Company operates a number of power generating and transmission assets, inclusive of coal fired power plants. While the ESDD confirmed that these are in compliance with National legislation, significant investments are required to bring these assets into compliance with the EU standards. This has been recognized in the past and the Bank has been working alongside the Kazakh government with the aim of developing new National standards based on the EU and international requirements. This is ongoing although the government is reluctant to fully implement the EU environmental standards at this stage. It is possible therefore that the Company will not attain the EU environmental standards in terms of emission and BAT performance in the short to medium term, although it is recognized that significant investments will need to be made by 2030.
Based on the results of the due diligence, the Bank is in the process of agreeing an updated Environmental and Social Action Plan (ESAP), which will address the issues identified in the ESDD. This includes further strengthening of the EHS management systems, aspects of OHS management, and strengthening elements of public reporting; as well as aligning the EIA process and stakeholder management in line with the Bank's PRs. The ESAP also includes the requirement for the Company to undertake additional Best Available Techniques (BAT) audits and develop action plans to attain EU based environmental standards over time on the large generating assets, although it is noted that implementation of such plans will likely require significant additional capital investments as noted above.
The Company will also develop a program to report on climate impacts and develop a corporate strategy in line with Kazak Green Economy plans, which is to be included as part of future reporting later on. The ESAP also requires that if the Company were to develop projects in sensitive areas or of sensitive nature, these would need a full ESIA in line with Bank requirements. The EBRD proceeds will not be used for any Category A projects and the Company will not build new coal fired power plants. Additional measures were also agreed to ensure preventative measures are reviewed in light of environmental and social risks associated with COVID -19. To date the Company has no plans for any retrenchment associated with COVID-19.
Technical Cooperation and Grant Financing
Company Contact Information
+ 7 (7172) 69-23-02
PSD last updated
12 Jun 2020
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Independent Project Accountability Mechanism (IPAM)
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