Jalalabatelectro Rehabilitation Project

Location:

Kyrgyz Republic

Project number:

49950

Business sector:

Power and energy

Notice type:

Public

Environmental category:

B

Status:

Cancelled

PSD disclosed:

24 Apr 2018

Translated version of this PSD: Russian

Project Description

A sovereign loan of up to €4 million to finance Jalalabatelectro investment programme. The programme is aimed at the rehabilitation and modernisation of low and medium voltage networks, including the installation of 21,000 advanced meters in the south of Kyrgyzstan. The project will improve reliability of the power supply and will significantly reduce technical and commercial losses in the regions of operation.

Project Objectives

With this investment the Bank will initiate a restructuring process of a public utility in order to improve its operating efficiency and restore financial health. In addition to the expected improvement in performance, the Project will entail commercialisation of the Company's operations and increased corporate transparency. TC funding will be allocated to help the company improve it current billing and collection practices as well as to help with the restructuring process implementation. In addition, the Bank will request an annual IFRS audit by a reputable audit firm and compliance with the ESAP.

Transition Impact

The Project will support the Bank's Green Economy Transition approach, delivering significant climate mitigation benefits through improving the Company's operating efficiency. The Project will address energy efficiency improvements, reduction of commercial losses and increasing reliability of power supply. The Bank will also provide TC aimed at the Company's restructuring to achieve commercialisation of operations and increased transparency.

Client Information

KYRGYZ REPUBLIC SOVEREIGN

The loan is made to the Kyrgyz Republic, to be on-lent to a state-owned JSC Jalalabatelectro electricity distribution company.

EBRD Finance Summary

EUR 4,000,000.00

Total Project Cost

EUR 7,000,000.00

Environmental and Social Summary

Categorised B (2014 ESP). 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 agreed with the Company. The upgrade of existing distribution networks and smart metering installation will result in a reduction of energy losses and improved overall supply and system safety. The implementation of the Project will achieve significant reduction of GHG emissions and is 100% GET.

The Bank's ESDD was undertaken by an independent consultant, with a review of the Company's current E&S management systems and compliance status, contractor management, operational practices. The ESDD confirmed that the Company has basic Environmental and Safety systems in place and institutional capacity to implement the Project in conformance with bank's PRs. The Project is not associated with any resettlement and/or loss of livelihood.

In terms of the physical state of the facilities the ESDD identified that these are old and inefficient, requiring additional maintenance to comply with both National standards and industry best practices. Major identified risk include soil and groundwater contamination from oil leaks, public and workers safety, overall deficiencies in the environmental, social and safety management systems. In order to address the identified gaps and ESAP has been developed, which includes, inter alia;

  • improvement of overall safety compliance during day-to-day activities;
  • management of the risks associated with the right-of-way encroachment zones;
  • implementation of the plan on the repair and/or removal of the leaking equipment, installation of the impermeable secondary containment for all medium-voltage containers and oil-filled equipment storage areas;
  • improvement of the waste management practices with particular focus on used oils;
  • implementation and maintenance of the Environmental and Safety Management System in line ISO 14001 and 45001 standards;
  • should any retrenchment be required in the future a Retrenchment plan will be required in line with PR2;
  • improve security/access to the energizes equipment and storage areas;
  • implementation of the Stakeholder Engagement Plan and grievance mechanism, improved communication and interaction with the local community.

The Bank will monitor the implementation of the Project through review of the Annual Environmental and Social Reports and monitoring visits as required.

Technical Cooperation

The following technical cooperation is envisaged to go along with the project:

  • TC technical audit and project preparation will be provided using the existing framework programme for the sustainable development of the power sector.
     
  • TC to hire a consultant to help implement the project including assistance in procurement of goods and services
     
  • TC to hire a consultant to develop a Corporate Development Program to improve billing and collection and other management practices.

Company Contact Information

Kubanychbek Raymakhunov
kuba1962@mail.ru
+996772138150
www.jae.kg

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