CAEPCO District Heating – Extension of existing loans

Location:

Kazakhstan

Project number:

41408

Business sector:

Municipal and environmental infrastructure

Notice type:

Private

Environmental category:

B

Approval date:

02 Mar 2011

Status:

Signed

PSD disclosed:

22 Oct 2010

Translated version of this PSD: Russian

Project Description

The EBRD is considering existing loans extension KZT 9.3 billion to the district heating subsidiaries of CAEPCO, a private energy company in Kazakhstan. The projects will finance extension of the priority investment programmes in Pavlodar, Ekibastuz and Petropavlovsk aimed at rehabilitation and improving energy efficiency of existing heat distribution networks in these cities. The investments are expected to yield significant reductions in heat losses, CO2 emissions and coal savings, and contribute to market transformation towards sustainable energy use in the district heating sector in Kazakhstan.

EBRD financing will, subject to confirmation by the Government of Kazakhstan, be complemented by concessional financing of up KZT 7.3 billion under Enhanced Partnership Framework Agreement to address affordability constraints associated with tariff increases linked to these investments.

Transition Impact

The proposed project will support privately owned heat distribution companies while the vast majority of heating companies remain publicly owned in Kazakhstan.

The project will aim to achieve financial and operational sustainability though tariff increases, a substantial reduction in heat losses in distribution, high environmental standards and improved quality of service provision.

The Client

Pavlodar District Heating and Petropavlovsk District Heating are existing clients for the Bank. Both companies are subsidiaries of CAEPCO, also an existing Bank client in the Kazakh power and energy sector. CAEPCO is one of the first private companies to take over district heating networks in Kazakhstan. It was established in August 2008 and is currently the largest private vertically-integrated power and district heating company in Kazakhstan.

EBRD Finance

KZT 9.3 billion alongside KZT 9.3 billion from the Government of Kazakhstan under Enhanced Partnership Framework Agreement (subject to separate approval).

Project Cost

KZT 25.9 billion including the EBRD loan, the Government’s contribution and co-financing by Companies and CAEPCO.

Environmental and social categorisation, impact, and mitigation

The potential environmental and social (E&S) impacts of the planned priority investments in district heating networks are likely to be site-specific and can be readily identified and addressed through adequate mitigation measures. The Project is expected to result in environmental improvements associated with the reduction in loss of water and heat, lower air emissions and increased energy efficiency. The environmental and social due diligence of the Project, consisting of the environmental and social analyses of the proposed investment programme and an environmental, health and safety audit of existing operations and facilities of the district heating companies, is currently being finalised.

Based on the recommendations of the due diligence an Environmental and Social Action Plan (ESAP) will be prepared and agreed with the Client prior to the Board review of the Project. The ESAP will be part of the legal agreements between the participating companies and the EBRD. This PSD will be revised once the due diligence and ESAP are finalised.

Technical Cooperation

None.

Company Contact

Mrs Aliya Urazbayeva, Managing Director, CAEPCO

a.urazbayeva@energy.kz

Tel:  +7 727 258-49-46
Fax: +7 727 258-49-42

 

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

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 how to submit a Request for review through our confidential online form, by email, mail or telephone. IPAM is available to discuss your concerns and answer any questions you may have about the submission or handling of Requests, which follow the Project Accountability Policy and Guidance. Requestors’ identities may be kept confidential, upon request.

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