Translated version of this PSD: Bosnian
A senior corporate loan of up to EUR 15 million to be divided into two parallel tranches (i) the EBRD tranche and (ii) a concessional tranche provided by the Green Energy Special Fund ("GESF"), a Special Fund established and administrated by the Bank with the contribution of the Taiwanese International Cooperation and Development Fund (TaiwanICDF) to support EBRD projects related to investments in efficient (also known as "green") energy technologies. The size of the GESF tranche will be determined prior to signing and will depend on the amount of the carbon emission reduction (measured in tonnes of CO2 equivalent saved). In any event it will be limited to a maximum of 50 per
cent of the total project costs (i.e. up to EUR 7.5 million to be provided by GESF). The proceeds of the loan will finance the (i) reconstruction of medium and low-voltage networks (ii) reconstruction of substations (iii) and expansion of smart metering ("the Project").
The Project will support ZEDP Elektro Bijeljina to reach its strategic objectives of a) Reducing losses, through the installation of new protected cables and substations as well as new meters with remote reading and disconnection features; b) Improving the quality of supply, with the replacement of substations and reconstruction of networks in the most populated areas which is projected to reduce frequency and duration of unexpected grid disconnections, as well as to provide a more stable supply of electricity; and, c) facilitating new renewable connections to the distribution network, mainly small PVs and small HPPs.
Transition ImpactThe transition impact of the project is expected to derive from its contribution to the Green Economy Transition (GET) and the country's energy resilience. The reconstruction of medium and low-voltage networks and introduction of around 30,000 new smart meters is expected to reduce distribution losses from 8.83 per cent (including commercial losses) to 6 per cent, saving at least 20 GWh of electricity per annum with significant associated CO2 emissions reductions.
ZEDP ELEKTRO BIJELJINA AD BIJELJINA
ZEDP Elektro Bijeljina is a power distribution company servicing 13 municipalities in the Bijeljina region in Republika Srpska, Bosnia and Herzegovina. The company is majority owned (65 per cent) by Elektroprivreda Republike Srpske (EPRS), one of the three national energy utilities 100 per centowned by the Government of Republika Srpska that cover electricity generation and distribution in Republika Srpska. Elektro Bijeljina employs some 900 employees and is the second largest distribution subsidiary of EPRS (out of a total of 5 distribution subsidiaries in EPRS).
EBRD Finance Summary
The loan will be divided into two parallel tranches (i) the EBRD tranche and (ii) a concessional tranche provided by the Green Energy Special Fund (GESF), a Special Fund established and administrated by the Bank with the contribution of the Taiwanese International Cooperation and Development Fund (TaiwanICDF). The GESF tranche will be limited to a maximum of 50 per cent of the total project costs (i.e. up to EUR 7.5 million to be provided by GESF).
Total Project Cost
The full amount of the proceeds will be used to finance the CAPEX for the project.
Environmental and Social Summary
Categorised B (2014 ESP). The upgrade of existing distribution networks and smart metering installation will have mainly positive effect resulting in the reduction of energy losses and improved supply and safety. The environmental and social risks associated with the Project are expected to be site-specific, can be readily identified and managed via the implementation of an ESAP.
The Company is an existing client of the Bank with a good track record on the previous transactions. ESD will undertake an in-house ESDD to check the Company's current E&S compliance status and management systems, supply chain and contractor management, operational practices in place and overall ability of the Company to manage E&S risks and deliver the Project in line with EBRD requirements. Opportunities to maximise the benefits from smart metering for the end-users will need to be identified and implemented taking into account the affordability analysis that will be conducted.
Major potential E&S risks associated with construction and operational health and safety, social and labour issues. An E&S questionnaire will be sent to the Company, and the full scope of the ESDD will be defined and fully agreed following the receipt of the answers to this questionnaire. ESD will work with E2C2 on assessing the GET component of the project. Additional consultancy support may be required for the E&S assessment of investment plans, development of NTS and SEP. This may be combined with the technical assessment. An ESAP will be prepared and agreed with the Company before submission to Board.
Technical CooperationSupport to the company by a PIU consultant during preparation and implementation, EUR 250,000 to be provided by an international donor.
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