Almaty LED

Location:

Kazakhstan

Project number:

45640

Business sector:

Municipal and environmental infrastructure

Notice type:

Public

Environmental category:

B

Approval date:

30 Apr 2014

Status:

Cancelled

PSD disclosed:

01 Oct 2013

Translated version of this PSD: Russian

Project Description

The EBRD is considering providing a senior loan to the State Communal Enterprise Almaty Kala Zharyk (the “Company”), a street lighting management company in the city of Almaty (the “City”). The Project will finance modernisation of the street lighting infrastructure through the following components:

(i) installation of a main control room

(ii) rehabilitation of power transmitters

(iii) replacement of the obsolete street lights with the modern technology lamps on the main streets of Almaty city.

In addition to the investment part of the Project, the Bank will provide TC grants for institutional support of the Company in order to improve its financial and operational performance to ensure its long-term sustainable development.

Transition Impact

The project will establish a good example for sound and transparent institutional framework for outsourcing operations and maintenance services in the sector with a view of introducing effective competition among specialised private companies and will lead to greater private sector participation. The project will create solid financial and operational conditions for private operators and will facilitate much-needed efficiency improvements in the provision of the operations and maintenance services. It will also promote a long-term, non-recourse financing of the public asset investments, and introduce incentive-based PSCs.

The project will introduce modern energy efficient street lighting technologies and effective system management structure, which will significantly reduce energy consumption and, as the result, operations and maintenance costs and the service quality in terms of increasing reliability of service, as well as providing wider street lighting service coverage.

The transaction will introduce appropriate corporate governance standards with the Company. It will set up a new concept of accountability for quality and quantity of the public assets management as well as formalise the system of institutional, accounting and managerial control in the sector.

The Client

SUE Almaty Kala Zharyk, a municipal communal enterprise wholly owned by the City, will be the ultimate beneficiary of the Project. Almaty City will provide the overall policy support in the Project implementation and facilitation of sector reforms.

EBRD Finance

Senior loan of up to KZT 4 billion.

Project Cost

KZT 5 billion, including EBRD loan and a capital grant portion from the City.

Environmental Impact

The project has been categorised B in accordance with the Bank's Environmental and Social Policy 2008. Environmental and social due diligence (ESDD) has been undertaken by the Bank’s Environment and Sustainability Department based on a review of the Company’s corporate management systems; relevant information provided by the Company; and a discussions with the Company’s personnel to evaluate the current operational performance and the risk management plans for the planned investment programme. The ESDD found that the potential future adverse impacts of the project will be site specific and can be addressed through appropriate mitigation measures.

The introduction of the project is expected to result in better service, improved environmental standards due to significantly reduced energy consumption and reduced operating and maintenance costs, plus improvements to safety and security through better lighting. However ESDD identified that some areas for improvement in order for the project to be structured to meet the Banks PRs, particularly in relation to development of management systems for environmental, health and safety and human resources management and stakeholder engagement.

An Environmental and Social Action Plan (ESAP) has been agreed with the Company. The ESAP includes the requirement for the development and implementation of management systems, training of staff, a Stakeholder Engagement Plan and grievance mechanisms. The Company will disclose locally information on its environmental and social performance.

The project will be monitored in terms of its environmental and social performance and implementation of the ESAP through annual E&S reports and site visits when deemed necessary.

Technical Cooperation

The following technical co-operation (“TC”) assignments are envisaged as part of this project:

Pre-Signing

  • TC 1: Technical Due Diligence - financed by the Government of Taiwan (EUR 86,960, on-going).

Post-Signing

  • TC 2: Support in development and implementation of a Corporate Development Programme for the Company. This will include extensive training on systems operations and contract management techniques, based on international best-practice. (EUR 280,000 to be financed by an international donor or the EBRD Shareholder Special Fund).
  • TC 3: Project Implementation Support to include development of tender documentation, contracting and contract implementation supervision for
    (i) procurement of the street lighting equipment;
    (ii) civil works,
    (iii) equipment installation, and
    (iv) other project implementation support. (EUR 500,000 to be financed by an international donor or the EBRD Shareholder Special Fund).
 

Business opportunities

For business opportunities or procurement, contact the client company.

For state-sector projects, visit EBRD Procurement: Tel: +44 20 7338 6794
Email: procurement@ebrd.com

General enquiries

EBRD project enquiries not related to procurement:
Tel: +44 20 7338 7168
Email: projectenquiries@ebrd.com

Public Information Policy (PIP)

The PIP 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. Please visit the Public Information Policy page below to find out how to request a Public Sector Board Report.
Text of the PIP

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