KAZREF - KZh Distribution Network Upgrade

Location:

Kazakhstan

Project number:

50541

Business sector:

Power and energy

Notice type:

Private

Target board date:

25 Apr 2019

Status:

Board Approved

PSD disclosed:

06 Nov 2018

Translated version of this PSD: Russian

Project Description

The provision of a senior loan of up to KZT 5 billion (equivalent to €12 million) to support the distribution network upgrade of LLP Karagandy Zharyk (KZh) - a subsidiary of the Bank's existing client Kazakhstan Utility Systems (KUS), a private power utility based in Kazakhstan.

Project Objectives

The project will support modernisation and energy efficiency improvements of distribution networks in the Karaganda region of the country. The proceeds of the loan will be used to cover the planned investment programme of KZh aimed at improvements in energy efficiency, reliability, integration of renewable projects and reduction of losses.

Transition Impact

The project is in line with the Bank's Green Economy Transition (GET) initiative. The modernisation of KZh's facilities will ultimately lead to improved stability and reliability of energy supply, the reduction of losses and increased potential of the system to support the integration of RES in the national distribution network.

Additionally, the project will have an inclusion angle through the provision of training to local youth and work with local colleges.

Client Information

KARAGANDA ZHARYK

KAZAKHSTAN UTILITY SYSTEMS

KUS is a private, vertically integrated utility company established in 2008 with operations in three segments: electricity and heat generation, electricity and heat distribution and supply in Karaganda, South, East Kazakhstan and Mangistau regions. KUS is rated BB- by Fitch and has around 9,000 employees.

EBRD Finance Summary

KZT 5,000,000,000.00

Total Project Cost

KZT 31,079,000,000.00

Environmental and Social Summary

Category B. The financing of the investment programme of this regional distribution company aimed at modernisation of existing networks, new low-medium voltage lines construction and energy efficiency improvements (the "Project") is associated with environmental and social (E&S) issues that can be readily identified. The environmental and social due diligence (ESDD) will be carried out by an independent consultant and will focus on the review of corporate E&S management systems of the Borrower and E&S assessment of the investment plans related to the Project, with special attention to be paid to substations automation and modernisation and low-medium voltage distribution lines upgrades and repairs. The ESDD considers among other such issues as bird collision risks, location sensitivities, risks associated with asbestos and PCBs containing equipment disposal, occupational health and safety of works, and stakeholder engagement. The ESAP will be developed to address any identified issues via specific mitigation measures as required. The NTS and SEP will be prepared and published on the Company's website to facilitate information disclosure about the Project.

Technical Cooperation

The Bank will provide a TC assignment on a cost sharing basis with the client under the existing Green Economy Project Preparation and Implementation Framework. The assignment will review the existing investment programme, confirm appropriateness, perform cost/benefit analyses and make recommendations for improvements.

Company Contact Information

Sultan Akhanov
sultan.akhanov@kus.kz
+77273377707
www.kus.kz
7F, 14/3, Kunayev Street, BC Nursaya, Astana, Kazakhstan 010000

 

Business opportunities

For business opportunities or procurement, contact the client company.

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