CEZ Distribution Bulgaria

Location:

Bulgaria

Project number:

47632

Business sector:

Power and energy

Notice type:

Private

Environmental category:

B

Target board date:

19 Oct 2016

Status:

Disbursing

PSD disclosed:

17 Jun 2016

Translated version of this PSD: Bulgarian

Project Description

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.

Project Objectives

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.

Transition Impact

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.

Client Information

CEZ RAZPREDELENIE BULGARIA AD (BULGARIA)

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

EUR 69,600,000.00

A senior loan of EUR 116,000,000.00

Total Project Cost

EUR 116,000,000.00

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

None.

Company Contact Information

For inquiries please contact EBRD Press Office:

+44 20 7338 7805

Business opportunities

For business opportunities or procurement, contact the client company.

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Email: procurement@ebrd.com

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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.