Project Description
A senior loan of up to KZT 4.1 billion (EUR 8.5 million) to PPP Centre of East Kazakhstan Region JSC to complete the modernisation of the street lighting system in the city of Ust-Kamenogorsk via the construction of additional 6,000 spotlights along ca. 150 municipal streets in the City and its vicinity. The project will enable the City to cover its public area with a modern energy efficient street lighting system including suburban areas, where street lighting had not been introduced before. The project is expected to save around 60 per cent of primary energy and CO2 emissions compared with the baseline.
The Project is consistent with the Municipal and Environmental Infrastructure Sector Strategy (BDS19-069(F)), which calls for "increased access to essential municipal infrastructure focused on quality, resource efficiency, reduced environmental impact". It is also aligned with the Bank's Country Strategy for Kazakhstan (BDS/KA/21-01(Rev 3)), which "supports Kazakhstan's Green Pathway to Carbon Neutrality and Climate Resilience". Due to the positive impact on the environment, the Project is also consistent with the Bank's Green Economy Transition Approach 2021-2025(BDS20-082(F)), and with the Bank's Strategy for the Promotion of Gender Equality (BDS21-133(F)).
Project Objectives
The overall objectives of the Project:
- Ust-Kamenogorsk Green City Action Plan ("GCAP") development and approval;
- signing of a mid to long-term performance-based O&M contract with an experienced private Supply, Install, Operate and Maintenance ("SIO&M") contractor;
- energy savings and GHG emissions reduction by ca. 60 per cent.
Transition Impact
ETI score: 70
Primary TI quality: Green - achieving primary energy savings by ca. 60 per cent compared with the baseline by installing energy-efficient LED luminaries.
Secondary TI quality: Competitive - promoting private participation via tendering a private operator bound by KPIs to ensure proper street lighting system performance.
The project receives an ETI rating of 70.
Client Information
PUBLIC PRIVATE PARTNERSHIP CENTER OF EAST KAZAKHSTAN REGION JSC
PPP Centre of East Kazakhstan Region JSC (the "Borrower" or the "Company"), wholly owned by the East Kazakhstan Oblast Akimat (the "Oblast Akimat"), was established in 2010 to develop and support complex budget-funded investment projects in the East Kazakhstan Oblast (the "Oblast"). The Company is the Bank's current client under the ongoing street lighting modernisation projects in Ust-Kamenogorsk, Semey and the Oblast's district centres. The Borrower owns and operates the street lighting systems in these cities and districts via experienced private O&M contractors selected based on open procurement tenders.
EBRD Finance Summary
KZT 4,100,000,000.00
A senior loan of up to KZT 4.1 billion (EUR 8.5 million) to PPP Centre of East Kazakhstan Region JSC, committed at signing with a tenor of 10 years including a 3-year grace period. The Project will be co-financed by the Borrower by up to KZT 100 million (EUR 0.2 million) and by the Oblast Akimat by up to KZT 900 million (EUR 1.9 million). The Loan will be backed by a Project Support Agreement to be signed between the Bank, the Company, the Oblast Akimat and Ust-Kamenogorsk City Akimat.
The transaction will be the first follow-on investment under the Ust-Kamenogorsk Green Cities Action Plan, addressing the identified priority environmental challenges of climate mitigation (GHG reduction) and air quality.
Total Project Cost
KZT 5,100,000,000.00
The Project costs include the following Priority Investment Programme (the "PIP") components:
- Street lighting system design;
- Installation of 6,000 LED spotlights.
Additionality
Additionality is achieved via:
Financing Structure: commercial financing for long tenors on a non-sovereign basis is currently scarce for utility projects in Kazakhstan.
Standard-setting, helping projects and clients achieve higher standards: improved reporting and environmental standards, higher inclusion and gender standards.
Knowledge, innovation, and capacity building: a Project Implementation Support consultant will support the Company in implementing the project based on international best practice.
Environmental and Social Summary
Categorised B (2019). The environmental and social ("E&S") impacts associated with the extension of LED street lighting systems will be mainly positive, resulting in improved street safety conditions. Adverse impacts are limited, site-specific and will be mitigated by implementing an updated Environmental and Social Action Plan ("ESAP"). This has been developed and agreed with the Company to structure the Project to meet EBRD Performance Requirements. Environmental and social due diligence has been carried out by an independent external consultant and included an E&S audit/review of the Company's current Environment, Health & Safety ("EHS") management systems, operations and facilities, as well as an analysis of potential impacts associated with the project.
The project will provide additional ca. 6,000 lighting points in the City and extend the previous street lighting project, which involved replacing old mercury lighting. The main E&S impacts are associated with the Project's implementation phase. The ESAP has been updated as part of the feasibility assignment and will need to be agreed by the Company prior to the signing. It includes requirements for environmental management, contractor management and occupational and community safety. The Stakeholder Engagement Plan and Non-technical Summary have been also updated and will be disclosed. Monitoring will be via annual E&S reporting to the Bank.
Technical Cooperation and Grant Financing
TC 1: Project Preparation Support to prepare the Project Feasibility Study covering: (i) the definition of the Project's PIP and preparing functional specifications, (ii) an economic benefits review of the proposed investment, (iii) an update of the environmental and social assessments for compliance with the EBRD Performance Requirements, and (iv) an update of the ESAP. This assignment with a cost of EUR 74,390; was funded by the TaiwanBusiness i EBRD Technical Cooperation Fund.
TC 2: Project Implementation Support covering: (i) assistance to the Borrower with the design (if required) of the street lighting system, (ii) procurement of the SIO&M contract, (iii) support to amend the current Public Service Contract to integrate the payments under the proposed Project, and (iv) support with Project implementation monitoring and the effects assessment. The cost of the assignment is up to EUR 200,000; to be financed by the EBRD Shareholder Special Fund or an international donor.
Company Contact Information
Daulet Batyrbayev
ppp.invest@mail.ru
+7 (7232) 26-23-96
https://ppp-vko.kz/rus
070019, 49, Kabanbay batyr str., Ust-Kamenogorsk, Kazakhstan
Implementation summary
PSD last updated
05 Dec 2022
Understanding Transition
Further information regarding the EBRD’s approach to measuring transition impact is available here.
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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 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.
