The EBRD is providing a senior loan of EUR 116 million to CEZ Razpredelenie Bulgaria AD, an electricity distribution company incorporated in Bulgaria and operating in the western region of Bulgaria. CEZ Razpredelenie is 67 per cent owned by the CEZ Group in Czech Republic and 33 per cent by other minority shareholders' legal entities and individuals.
The proceeds of the loan will be used to finance the company's capital investment programme in the distribution network for the period 2016-2017 including the acquisition of energy infrastructure, equipment and reconstruction and building of new infrastructure. The investment is expected to reduce the company's grid losses and improve the quality of distribution services.
ETI score: 60
With this investment the Bank will contribute towards the successful implementation of sector reforms, encourage infrastructure investments and move towards greater liberalisation of the electricity market. Alongside this investment the EBRD is preparing a technical cooperation project with the Bulgarian Energy Regulator, which will focus on providing assistance on key regulatory matters related to the upcoming market liberalisation and enhance the analytical ability of the regulator with a particular emphasis on the regulation of electricity networks. In addition, the investment programme will contribute to setting new standards for business conduct in Bulgaria since it will primarily aim to reduce technical and commercial losses, leading to CO2 emission savings of up to 47,000 tonnes per year.
CEZ RAZPREDELENIE BULGARIA AD
CEZ Razpredelenie AD is a joint stock company incorporated in Bulgaria and responsible for the distribution of electricity in the country's western region. CEZ Razpredelenie is 67 per cent owned by CEZ Group and 33 per cent by other minority shareholders- legal entities and individuals. CEZ Group is an integrated electricity utility headquartered in Czech Republic and operating in central, south-eastern Europe and Turkey.
EBRD Finance Summary
A senior loan of EUR 116,000,000.00
Total Project Cost
Total project costs of EUR 116,000,000.00
Environmental and Social Summary
Categorised B (2014 ESP). In addition to various modernisation/ upgrade activities on existing assets and obligatory buyouts, the new linear infrastructure elements to be constructed under the investment programme (Project) consist of segments of new underground MV lines connections in total length of approximately 30 km yearly and overhead LV lines in total length of approximately 10 km yearly. These will be mostly constructed along existing roads and streets. The Environmental and Social Due Diligence (ESDD) is being carried out by an independent consultant and focused on review of the Company's corporate Environmental, Health and Safety and Social management systems and procedures in place, and E&S Assessment of the investment programme to identify main risks and status of compliance with the EBRD's E&S Policy Performance Requirements (PRs). The ESDD identified a number of E&S impacts that require implementation of mitigation measures, including past soil contamination with transformers' oil, biodiversity impacts, electric and magnetic fields exposure of workers and community, permanent and temporary loss of land and/or crops as well as labour and human rights issues among others.
The Environmental and Social Action Plan (ESAP) representing a roadmap for implementation of key environmental and social actions required for the investment programme is developed and need to be agreed with the Company. Among key actions the ESAP includes the following:
- Developing and implementing procedures addressing environmental and social aspects in relation to the Company's waste management, spills management, wastewater discharge, noise, environmental management, supervision of contractors, etc.
- Improving management of potential oil spills at Company's sites and during implementation of new projects.
- Mitigating potential impacts of any works performed at the infrastructure located in nature protected areas.
- Ensuring public disclosure of the investment programme and its impacts.
- Implementing a Stakeholder Engagement Plan (SEP) allowing for stakeholder feedback consideration during investment programme implementation.
Non-Technical Summary (NTS) - English Version and Bulgarian Version
Stakeholder Engagement Plan (SEP) - English Version and Bulgarian Version.
Technical Cooperation and Grant Financing
Company Contact Information
For inquiries please contact EBRD Press Office:
+44 20 7338 7805
The Project financed CEZ Distribution Bulgaria (the "Company"), an important player in the Bulgarian electricity distribution market, to carry out critical infrastructure investments in the electricity grid in Western and Northwest Bulgaria. With the Bank's financing, the Company implemented a required capital investment programme and improved its operational and financial performance. CEZ Distribution Bulgaria upgraded and reinforced its distribution network and acquired existing and built new energy infrastructure. The investment significantly reduced the Company's grid losses (above the initial target) and improved the quality of its distribution services.
The project was implemented in line with EBRD's Green Economy Transition Approach and adhering to high environmental, energy-efficiency and social standards. The Company has implemented the Environmental and Social Action Plan and developed measures to mitigate and manage occupational health and safety risks. EBRD continues to monitor compliance, in particular related to worker safety, waste and biodiversity management.
As a part of its wider Transition Impact, the project contributed to successful implementation of energy sector reforms and set new standards for corporate governance and business conduct within the Company.
PSD last updated
10 Mar 2020
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 firstname.lastname@example.org. 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.
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Project Complaint Mechanism (PCM)
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 accountability mechanism.
The accountability mechanism 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 our webpage to find out how to submit a complaint through the confidential online form, by email, mail or telephone. We are available to discuss your concerns and answer any questions you may have about the submission or handling of complaints. Complainants’ identities may be kept confidential upon request.