The proposed project involves financing a number of energy efficiency measures such as:
i) upgrade and modernization of the obsolete low-voltage infrastructure,
ii) installation of meters to allow reduction of commercial and technical losses and an improvement of the reliability of supply.
A small amount of the Loan will be used for re-financing existing short-term debt used for funding the 2007-2008 investment program.
The transition impact primarily comes from
i) improving operating efficiency of the private investor in the power distribution sector in Armenia,
ii) strengthening institutions, law and policies that promote market mechanisms, and
iii) demonstration effect of successful restructuring.
Electricity Networks of Armenia (ENA), majority owned and controlled by InterRAO (Russian Federation), the electric power utility responsible for maintaining distribution power infrastructure and supply of electricity in Armenia.
A EUR 45 mln corporate senior loan to ENA.
EUR 52 million
Screening category and justification
Screened B/1. The project involves the provision of funds for investments at an electricity distribution company, which can be readily assessed as part of an environmental and social due diligence. In line with the Bank’s Environmental Policy a corporate Environmental Audit of the Company and an Environmental Analysis of the proposed investment programme has been undertaken as part of the due diligence.
Due diligence undertaken and outcomes
An environmental due diligence was undertaken of the project by an international environmental consultant. This consisted of a corporate Environmental Audit inclusive of site visits to substations and depots to assess the current compliance level and environmental risk associated with current and past operations. An Environmental Analysis of the planned investment programme was also undertaken to assess the planned line and transformer station upgrades and assess whether the proposed investment programme will allow the Company to attain National and EU Environmental standards.
A number of key action areas have been proposed as part of an Environmental and Social Action Plan (ESAP). The majority are focused at the Corporate level, although some site specific actions have also been identified. This includes a programme to manage PCB’s, asbestos containing materials, hydrocarbons (including from fuel depots) as well as health and safety issues associated with electromagnetic radiation (EMF) among others. A health and safety programme will also be developed by the Company. The Company will implement and environmental and health and safety management system as part of the ESAP implementation.
The implementation of the ESAP will allow the Company to maintain compliance and develop best practice. The planned investment programme will also allow for energy efficiency gains as well as improve the safety to the system in terms of staff and the general public.
The Company will be required to provide the Bank with an annual environmental report, including updates on the ESAP, and notification on any material accidents or incidents.
The Company will implement the ESAP and an Environmental, Health and Safety Management System.
The Company will conduct its business with due regard to National and EU environmental regulations and standards.
- The Company will arrange for periodic environmental audits and monitoring visits by Bank staff or appointed representatives, if and when deemed necessary.
TC to assist the Regulator with formulating strategy for the introduction of the third party access.
Mr. Evgeny Gladunchik
Phone: + 374 10 650086
Fax: + 374 10 655457
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