INTER RAO Capacity Replacement Loan

Location:

Russia

Project number:

44993

Business sector:

Power and energy

Notice type:

Private

Environmental category:

A

Target board date:

12 Nov 2013

Status:

Complete

PSD disclosed:

28 Jun 2013

Translated version of this PSD: Russian

Project Description

The EBRD is considering providing financing for the replacement of outdated coal-fired capacity with a new high-efficiency 445.6 MW Combined Cycle Gas Turbine (CCGT) power unit at Verkhnetagilskaya GRES in the Urals region.

Transition Impact

  • Demonstration of new replicable behaviour and activities. The project will significantly improve energy efficiency and reduce carbon emissions of Verkhnetagilskaya GRES and will improve environmental situation in the region through a switch from coal to gas. The new CCGT unit will have a gross efficiency of around 57% as compared to the existing old coal-fired units which currently operate with efficiency around 32%. Based on a reference power generation of around 3,000 GWh, the corresponding carbon emissions reduction from the project will be more than 1,200,000 tons of CO2 per year. The exact energy efficiency and carbon reduction targets will be established as part of technical due diligence. The improvements in emission standards will be covenanted under the ESAP.
  • Setting standards of business and environmental conduct through replacement of old coal-fired units by new CCGT, the Project will significantly improve efficiency and carbon emissions. The new CCGT will employ BAT technology and will set an important benchmark in terms of efficiency and environmental standards in the region going far beyond existing national practices. Furthermore the Project will facilitate reduction of coal-fired generation in Sverdlovsk region and related pollution.

    Additional TI sources can be identified in the process of further environmental and technical due diligence.

The Client

The loan will be provided to Inter RAO Credit B.V. (the “Borrower” – 100% Dutch subsidiary of JSC Inter RAO UES.

JSC Inter RAO UES (the “Sponsor”) , a diversified energy holding with assets in Russia and abroad and main business interest in domestic thermal power and heat generation, supply, cross-border electricity trading, electric utilities operations abroad and power engineering.

EBRD Finance

Potential senior corporate A loan and B loan in the total amount of up to RUB 10 billion.

Project Cost

The total Project’s cost is estimated at RUB 20bn.

Environmental Impact

Category A. The construction of new state-of-the-art 445.6 MWe Combine Gas Cycle (CCGT) power plant at an existing power plant requires an Environmental and Social Impact Assessment (ESIA) of the proposed investment in accordance to the Bank’s Environmental and Social Policy (2008).

The Bank’s Environmental and Social Due Diligence (ESDD) was undertaken by an independent consultant and included a review of current operations at the existing Verkhnetagilskaya GRES, as the new CCGT plant will share some of the existing infrastructure and ultimately replace some of the old coal fired units at the site. The planned closure of the old and inefficient coal fired units will reduce local pollution, notably dust, as well as reduce the overall carbon footprint from the plant per kWh. After commissioning of new CCGT, the Company will permanently shut down turbines 1-6 and boilers 1-13, which will be decommissioned. In 2016, the Company plans to shut down units 7-8 for their further modernisation.

The Bank has an existing corporate Environmental and Social Action (ESAP) with Inter Rao signed as part of the 2012 loan facility. This corporate ESAP includes commitments to implementing corporate Environmental, Health and Safety (EHS) standards, modernizing various existing assets as well as environmental criteria for new projects. The ESDD confirmed that the Company is implementing the agreed corporate ESAP, and that the Company has the institutional capacity to fully implement the Bank’s Performance Requirements.

The new CCGT will meet the Bank's Performance Requirements and EU environmental standards, namely the EU Industrial Emissions (IE) Directive. The plant will utilize existing infrastructure, and therefore no new power lines or gas pipelines will be required.

The Bank will subsequently monitor the project.

There is an Environmental and Social Impact Assessment available for this project.

Technical Cooperation

TC funded Technical and Energy Efficiency audit using the existing framework program is contemplated.

Company Contact

119435, Moscow,
Bolshaya Pirogovskaya st. 27, building 2.
http://interrao.ru/en/

Phone: +7 (495) 664-88-40
Fax: +7 (495) 664-88-41
E-mail: office@interrao.ru

 

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

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Tel: +44 20 7338 7168
Email: projectenquiries@ebrd.com

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Text of the PIP

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