CAEPCo Equity (F. Northern Lights)

Location:

Kazakhstan

Project number:

39914

Business sector:

Power and energy

Notice type:

Private

Environmental category:

B

Approval date:

25 Mar 2009

Status:

Complete

PSD disclosed:

15 Jan 2009

Project Description

The EBRD is considering an equity investment in Central-Asian Electric Power Corporation (CAEPCo), a private energy holding of power utility companies in Pavlodar, Petropavlovsk, Ekibastuz and Astana, to finance major rehabilitation investments aimed at enhancing energy efficiency and improving the environmental standard of power generation and distribution assets.

Transition Impact

The project will support a dynamic local private sponsor active in the power utility sector in Kazakhstan. It will facilitate implementation of an ambitious investment programme leading to significant improvements in efficiency and environmental standards, in line with the Sustainable Energy Action Plan signed between the EBRD and the Government of Kazakhstan in June 2008. The transaction will demonstrate to other market participants that tangible investments in the power sector can be pursued based on tariff increases approved within the existing regulatory framework in Kazakhstan.

The Bank’s participation as an equity investor in the company will also facilitate the future IPO to further diversify the investors’ base and attract interest from the private sector.

The Client

Investee: Central-Asian Electric Power Corporation (CAEPCo), a private energy holding of power utility companies in major cities of Northern Kazakhstan.

Sponsor: Central-Asian Power-Energy Company (CAPEC), a private holding company with interests in the energy, industrial and financial sectors in Kazakhstan.

EBRD Finance

The Bank is considering an equity investment in CAEPCo potentially along with other local private strategic investors.

Project Cost

Subject to final valuation.

Environmental Impact

Screening category and applicable performance requirements

The Project has been screened B, requiring an Environmental and Social Due Diligence (ESDD) consisting of a corporate environmental and social review of existing operations and an environmental analysis of the planned investment programme. Environmental and social impacts from the operation and upgrade of combined heat and power plants as well as district heating and electricity distribution systems can be readily identified, assessed and mitigated.

Key Environmental and Social Issues and due diligence results

The main environmental issue is associated with energy efficiency as well as air emissions from the generating assets. Waste management and water use could also raise significant issues and needs to be assessed. The environmental and social due diligence confirmed that the current and planned operations are in compliance with National environmental standards and the planned investment programme is structured to meet National and EU environmental standards.

Overall, the proposed project will further improve the environmental performance of the Company and allow for higher energy efficiency levels and future compliance with best international environmental standards and practices.

Summary of Environmental and Social Action Plan

As a result of the environmental and social due diligence, a comprehensive ESAP has been prepared to address future operations of the Company and implementation of the Bank’s Performance Requirements (PRs). This includes the development of a systematic approach to environmental issues at the Company and individual site level, including the implementation of an environmental, health and safety management system as well as further investments to reduce energy use as well as improve the abatement of air emissions and wastewater in line with best international practice. The Company plans to continue to invest to improve health and safety. A Stakeholder Engagement Programme (SEP) has been developed by the Company, which will include the publication of annual information on environmental and social matters on the Company’s web sites, as well as local information in local newspapers, as appropriate. A grievance mechanism will be maintained by the Company.

The implementation of the investment program as agreed in the ESAP is structured to allow the attainment of Kazakh as well as EU environmental standards and will significantly improve the company’s environmental management and overall performance. However, the coal fired power plants will not attain emission value levels (EVL) as required for existing plants under the EU Large Combustion Plant (LCP) Directive in the medium to long term. The planned use of wet scrubbers will significantly reduce emissions of SOx and dust in a cost effective manner and will result in significant improvement of local air quality and therefore improved public health. The agreed EVL will be more stringent than Kazakh requirements post 2013 and will result in visible and tangible improvements.

The Company will undertake additional Best Available Technique (BAT) Assessments to identify additional improvements to operations as part of implementing an Environmental, health and safety management system.
Implementation requirements

  • The Company will implement the ESAP (as agreed with the Company) and an Environmental, Health and Safety Management System.
     
  • The Company will be required to provide the Bank with an annual environmental report, including updates on the ESAP (i.e. implementation status of the various projects), and notification on any material accidents or incidents.
     
  • The Company will facilitate periodic monitoring visits by Bank staff or appointed representatives, when deemed necessary.

Technical Cooperation

None.

Company Contact

Gulnara Artambayeva, President of CAPEC
E-mail: G.artambayeva@energy.kz

 

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

Project Complaint Mechanism (PCM)

The Project Complaint Mechanism (PCM) is the EBRD's accountability mechanism. It provides an opportunity for an independent review of complaints from individuals and organisations concerning EBRD-financed projects which are alleged to have caused, or are likely to cause, environmental and/or social harm.

Please visit the Project Complaint Mechanism page to find information about how to submit a complaint. The PCM Officer (pcm@ebrd.com) is available to answer any questions you may have regarding the submission of a complaint and criteria for registration and eligibility, in accordance with the PCM Rules of Procedure.

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