Project Description
A secured senior loan of up to USD 30 million to ICS Premier Energy Distribution S.A. ("Premier Energy", the "Company") to finance the Company's 2022-2025 investment programme. The overall capex programme for the period of USD 60 million will be co-financed by a parallel loan from the European Investment Bank ("EIB") for an equal amount.
The transaction is presented under the EBRD Green Cities Framework stemming from Chisinau's Green City Action Plan (GCAP) that was completed and approved by the City Council in May 2020.
Project Objectives
The objective is to support Premier Energy with its 2022-2025 investment programme focussed on the modernisation and upgrade of the electricity distribution grid. The programme aims to strengthen the network, increase energy efficiency, improve safety standards of the substations and modernise the telecommunication infrastructure.
Transition Impact
ETI score: 70
The Green Cities Framework 2 (GrCF2) represents a strategic and multi-project approach seeking to help identify and address environmental challenges in selected large cities in the EBRD Countries of Operations. The transaction will primarily help to promote the Green transition quality by addressing priority environmental challenges identified in Chisinau's GCAP. The transaction is expected to allow Premier Energy to improve robustness of the electricity grid in Chisinau and reduce losses which will lead to net CO2 savings. In addition, the transaction will support the Competitive quality as the focus of this investment is to upgrade the electricity distribution network and enhance the energy management (i.e. targeting performance improvement).
Client Information
ICS PREMIER ENERGY DISTRIBUTION SA
Premier Energy is the largest and solely privately owned electricity distribution system operator in Moldova, maintaining and operating the distribution grid in the central and southern parts of the country including Chisinau with a total length of 35,642 km and providing connections to more than 820,000 consumers, resulting in domestic market share of c.70%. Premier Energy operates in a regulated market environment overseen by the National Energy Regulatory Agency (ANRE) under a revenue-cap model that compensates it for operating and maintenance costs and a regulated rate of return on the regulatory asset base.
Premier Energy is 93% owned by Czech private equity firm Emma Capital Limited, a private limited liability company incorporated in Cyprus and ultimately controlled by a number of Czech individuals that has investments in energy, consumer finance and gaming. The minority stake (7%) is held by Soterios Capital Partners, wholly owned by the family of founder Boris Salas.
EBRD Finance Summary
USD 30,000,000.00
Total Project Cost
USD 60,000,000.00
Additionality
EBRD offers financing and structure not available from commercial sources. Furthermore, EBRD will require Premier Energy to comply with stringent environmental and social requirements to improve health and safety standards and reduce network-associated accidents among its employees and the general population.
Environmental and Social Summary
Categorised B (2019 ESP) and high-medium risk due to the nature and scale of the capex program (regional modernisation including upgrade of LV-MV facilities). The Bank's proceeds will not be used for high voltage power lines and A category lines. Key Environmental & Social (E&S) risks and impacts to consider include potential land acquisition and restriction of access, labour issues, client environmental and social capacity, ecological impacts for instance power lines impacting birds, management of contractors, occupational health and safety risks, and stakeholder engagement. The ongoing Bank's E&S Due Diligence (ESDD) is undertaken by an independent consultant. It includes a review of the Company's E&S organisation and performance including previous Annual Environmental and Social Reports through previous transactions, and an assessment of impacts and benefits of the proposed investment (including a site visit to selected assets to assess health and safety and labour conditions issues). The ESDD includes the development of a Non-Technical Summary (NTS) and an update ESAP for this Project to take account of ESP 2019. The Project is considered Paris aligned for climate mitigation as it features in the joint MDB "aligned list" and no further assessment is required. The Project is deemed not significantly exposed to physical climate risks and is considered Paris aligned for climate adaptation. This paragraph will be updated when the ESDD is completed.
Company Contact Information
Jose Luis Gomez Pascual
jlgomezp@premierenergy.md
+ 373 68 88 84 60
https://www.premierenergydistribution.md
ICS Premier Energy Distribution S.A., 4 Andrei Doga Street, Chisinau, Republic of Moldova
Implementation summary
PSD last updated
13 Sep 2022
Understanding Transition
Further information regarding the EBRD’s approach to measuring transition impact is available here.
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More information on the EBRD’s practices in this regard is set out in the ESP.
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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 more about IPAM and its mandate; how to submit a Request for review; or contact IPAM via email ipam@ebrd.com to get guidance and more information on IPAM and how to submit a request.