Khanty Mansi District Heating Project

Location:

Russia

Project number:

38604

Business sector:

Municipal and environmental infrastructure

Notice type:

Public

Environmental category:

B

Target board date:

03 Jun 2009

Status:

Cancelled

PSD disclosed:

27 Feb 2009

Project Description

The EBRD is considering a loan to “YuTEC” (Yugra Energy Company), the power transmission and distribution company, wholly owned by Khanty-Mansi Autonomous Okrug (the “Okrug”). The loan would finance the regional priority investment programme in district heating sector with significant cost saving and environmental potential. The overall project would focus on rehabilitation and upgrade of the municipal local heating systems through refurbishment of up to 164 small electricity and heat generating facilities (i.e. diesel fired generators and boilers) and rehabilitation of adjacent distribution networks) in small settlements of the Okrug.

Energy Efficiency will be improved and costs optimization will be achieved by switching from the fuel oil to local fuels including bio-fuel. The project would also include the regulatory framework improvement component for the municipal and housing services sector of Okrug.

Transition Impact

The operation will bring efficiency improvement in provision of the municipal heating and electricity distribution services in small settlements, will support institutional strengthening, commercialisation, tariff reform, enhance transparency of the budget subsidy mechanism, and introduce the appropriate incentive based service/lease contracts with operating company, reflecting the international best practice in respect to operator performance.

Strong demonstration effects are expected for the benefit of neighbouring regions which could follow the lead of Khanty-Mansi Autonomous Okrug

The Client

“YuTEC” (Yugra Heat and Energy Company), the power transmission and distribution company, owned by the Khanty-Mansi Autonomous Okrug.

EBRD Finance

The loan up to RUB 1,500 million (equivalent to ~ EUR 33.6 million) to YuTEC under a guarantee of Khanty-Mansi Autonomous Okrug

Project Cost

RUB 2,000 million (equivalent to ~ EUR 44 million).

Environmental Impact

The project was screened B/1.

As a result an environmental, health and safety audit of the existing facilities of the Okrug and an Environmental Analysis (EA) of the potential environmental impacts of the priority investment programme (PIP) according to EBRD's Environmental Policy (2003) were carried out by AF Consult Oy. Based on the findings and recommendations of the EA a Health, Safety, Environment and Social Management Plan (HSESMP) was prepared. This plan has been approved by the YuTEC, who will report on its implementation on an annual basis.

The Project shall be designed, constructed and operated to meet national legal requirements and relevant EU standards (BAT) and good practice on health and safety requirements.

The results of the Environmental Analysis of the project indicate that it will have positive environmental and social effects. These include:

  • Reduced emissions and improved energy efficiency through reduced fuel use, the introduction of Combined Heat and Power (CHP), operational improvements and by switching from fossil fuels to less polluting liquefied petroleum gas (LPG) or biomass and in some cases also natural gas and gas oil.
     
  • Air emissions (sulphur dioxide, dust, nitrogen oxides and carbon monoxide) from operational activities are predicted to be significantly lower due to the change in fuels. Green house gas reductions will also be achieved.
     
  • The Project will improve the availability and reliability of district heating and electricity improving the quality of life of local communities.

The Project may cause some local environmental impacts and occupational health and safety risks especially during the construction phase. The impacts and risks that may arise are likely to be local, short term in nature and can be mitigated or prevented by good construction practice and the implementation of the Health, Safety,

Environment and Social Management Plan (the “HSESAP”)

The Project will report annually on the implementation of the HSESAP and environmental and social matters.

Technical Cooperation

Loan funded

  • Project Implementation Consultant for the preliminary design, procurement support and contract administration (up to RUB 80 million);

Client funded

  • Project Implementation Unit Training and Initial Support (up to RUB 1.75 million)

Grant financing had been used for project preparation activities

  • Technical feasibility study (up to € 350,000);
  • IFRS audit of the Company (€ 50,000)
 

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

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Text of the PIP

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Please visit the Project Complaint Mechanism page to find information about how to submit a complaint. The PCM Officer (pcm@ebrd.com) is available to answer any questions you may have regarding the submission of a complaint and criteria for registration and eligibility, in accordance with the PCM Rules of Procedure.