KAUNAS ENERGY SECTOR & MODERNISATION PROJECT

Overview
Project Summary Document
Environmental and Social Documentation
Procurement
Complaints

Project ID 3948

Status Cancelled

Location

Lithuania

Business Sector

Municipal Infrastructure

Notice Type

Private

Project ID 3948

Status Cancelled

Location

Lithuania

Business Sector

Municipal Infrastructure

Notice Type

Private

Environmental Category

Approval Date

14 Dec 1999

Disclosure date

15 Sep 1997

As per section 1.4.2 (iii) of the Directive on Access to Information: "For Projects approved by Bank management where the Board of Directors has delegated the approval authority, the PSD shall be disclosed at the start of the relevant no-objection notification period to a member country of the Bank in accordance with Article 13 (iii) of the Agreement Establishing the EBRD."

Project Description

The project consists of: (i) restructuring of the Kaunas energy sector and establishing a private concession for its management and development; and (ii) the modernisation of the co-generation infrastructure.

Transition Impact

The project supports the introduction of private management under a lease agreement for the operation of the local ditrict heating system and the two combined heat and power plants. It also promotes the establishment of independent energy suppliers and the improvement of the environmental performance. Moreover, the project will act as a pilot as the sector is still untested in terms of private investment and privatisation.

The Client

Kaunas Energy Company (KEC), a single-purpose company owned by the Kaunas Municipality which will own the combined heat power plants and district heating supply system (the infrastructure). Operation and maintenance of the assets are likely to be transferred under a commercial contract to a private company.

EBRD Finance

The EBRD is likely to extend a US$ 32 million (ECU 28 million) long-term loan to KEC under a sovereign guarantee. The Council of Europe Social Development Fund is likely to provide co-financing of US$10 million. KEC will also provide its own funds (US$ 12 million).

Project Cost

The total project cost is US$ 54 million (ECU 47 million).

Environmental Impact

The project was classified as B/1 requiring an environmental analysis and audit. These were carried out prior to the Bank approval. The main environmental objectives of the Project are:

reduction of air emissions;
achieving compliance with the national environmental standards and World Bank environmental guidelines;
improved environmental and health and safety management; and
efficiency improvements in the power plants and the reduction of water and thermal losses on the heat distribution systems.

An Environmental Action Plan (EAP) was developed which will bring the company's operations in line with Lithuanian regulations and World Bank environmental guidelines. KEC’s two thermal power stations (Kaunas and Petrasiunai) use natural gas and heavy fuel oil. Although the plants are generally in compliance with relevant national standards the use of heavy fuel oil frequently results in higher local ambient sulphur dioxide levels. NOx emissions are just below the limits set by the relevant national standard. Particulate emissions would be an issue only when a significant amount of heavy fuel oil is burnt. The company has committed to increasing the use of natural gas, and to limiting heavy fuel oil use to emergency situations only (included in the EAP). This would reduce the emissions of both sulphur dioxide and particulates.

No environmental improvements are planned for the Petrasiunai CHP plant at present, since it is awaiting the final decision of the regulatory authorities regarding its closure (to be achieved not later than December 2000). If the decision is taken to continue operating the plant, the company will develop a programme of environmental improvements for approval by the Bank latest by July 2001.

The EAP also includes the following measures: upgrading of boilers at Kaunas CHP to further reduce NOx emissions; improving health and safety management; and improving waste management (particularly the handling, storage and disposal of asbestos).

Technical Cooperation

Two technical cooperation studies have been awarded for the purpose of project definition (technical feasibility study) and implementation of the new structure for the sector (concession preparation).

Company Contact

Transition impact

ETI Score: 130

PSD last updated

21 Jan 2019

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

EBRD project enquiries not related to procurement:
Tel: +44 20 7338 7168
Email: projectenquiries@ebrd.com

Public Information Policy (PIP)

The PIP sets out how the EBRD discloses information and consults with its stakeholders so as to promote better awareness and understanding of its strategies, policies and operations. Please visit the Public Information Policy page below to find out how to request a Public Sector Board Report.
Text of the PIP

Environmental and Social Documentation is not available for this project.

Selected procurement notices related to this project may be shown below. Further procurement opportunities related to this and other projects, if available, maybe be viewed in the EBRD Procurement Portal.

The EBRD's Environmental and Social Policy (ESP), Access to Information policy (AIP) and Project Accountability Policy (PAP) enable sound and sustainable development in its projects. The Independent Project Accountability Mechanism (IPAM) deals with complaints about environmental, social and disclosure matters related to the Bank’s investments.

No complaints about this project have been made so far.

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