Translated version of this PSD: Russian
The EBRD is considering providing a KZT 1.2 billion (€ 5.7 million) to State Communal Enterprise “Heating, Water Networks and Wastewater” (“TVS&V” or the “Company”), a water and district heating company in the city of Aktau, to support the rehabilitation and upgrade of the district heating (DH) distribution network in Aktau.
The Project is aimed at replacement of parts of the obsolete district heating networks operated by the Company with pre-insulated modern technology pipes in order to reduce energy and water losses, increase reliability and quality of provided heat and hot water sevices, reduce maintenance and operation costs as well as reduce the negative environmental impact, both locally and globally.
The transition impact of this project is expected to include:
- Introduction of commercial heat purchase tariffs based on meters between the heat producer and the Company as well as introduction of consumption based tariffs for the end-consumers of heat and hot water.
- Introduction of market-based behaviour patterns through the demonstration effect of new instruments to finance activities in the district heating sector on a sub-sovereign level in Kazakhstan;
- Transfer of skills through the technical assistance components. Additionally, the transaction aims to increase transparency and improve business standards through metering programme at the buildings entrances and all new connections;
- Introduction of higher enhanced environmental standards through energy efficiency improvements in the City of Aktau.
The client for this project is the State Communal Enterprise “Heating, Water Networks and Wastewater” in the city of Aktau of the Mangystau Oblast, Kazakhstan.
The EBRD will provide a senior corporate loan to the Company in the amount of up to KZT 1.2 billion (€ 5.7 million).
KZT 3.47 billion (€ 16.44 million) including related technical cooperation to support the Company with the project preparation and implementation.
It is expected that the EBRD loan will be supplemented by a KZT 0.63 billion (€ 3.00 million) Clean Technology Fund (“CTF”) co-financing loan.
The project has been categorised B in accordance with EBRD's 2008 Environmental and Social Policy. TVS&V is an existing client that is performing well under the Aktau Water Project (signed in 2010). The priority investments into the modernisation and upgrade of the district heating facilities are expected to bring environmental and social benefits associated with the overall improvement in the quality of heating services in Aktau, improved energy efficiency, reduction in fuel consumption, prevention of heat and water losses, and lower air emissions.
The due diligence process is currently on-going. It includes a corporate review of the client's corporate environmental, health and safety and social management capabilities and procedures in relation to its own workforce and construction contractors, and an analysis of the environmental and social impacts and benefits of the proposed priority investment programme to establish the level of project's compliance with EBRD's Performance Requirements (PRs). The existing Environmental and Social Action Plan (ESAP) will be updated and agreed with the Company to address any environmental and social issues identified during the due diligence to achieve and maintain compliance with the Bank's PRs within a reasonable time-frame. The client will also develop a Stakeholder Engagement Plan, including a grievance mechanism.
This PSD will be updated when the results of due diligence are known.
The following technical co-operation (“TC”) funds are envisaged as part of this project:
- Preparation of a feasibility study with detailed PIP, € 72,965, financed by the EBRD Early Transition Countries Fund;
- Project Management Consultants to assist the Company with the project management, design, procurement, engineering and supervision of works, up to € 400,000 to be financed by an international donor or the EBRD Early Transition Countries Fund.
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