KTZ Energy Efficiency loan

Location:

Kazakhstan

Project number:

42784

Business sector:

Transport

Notice type:

Public

Environmental category:

B

Approval date:

12 Nov 2013

Status:

Complete

PSD disclosed:

13 Jul 2011

Translated version of this PSD: Russian

Project Description

The EBRD is considering financing part of railway operator KTZ’s energy efficiency programme, which is expected to include a number of components (upgrade of lighting system, introduction of alternative heating solutions such as heat pumps, solar water heaters and gas boilers). Implementation of the programme will result in reduced energy consumption across KTZ operations.

Transition Impact

Transition impact is expected to be derived from the following:

(1) Demonstration effect of successful restructuring (energy management and energy efficiency)
The development and implementation of an energy efficiency project by a highly visible national company in a key sector of the Kazakh economy will not only have an impact in terms of energy and carbon savings, but will also have a significant demonstration effect on the business community in Kazakhstan. The Project covers a number of energy efficiency and renewable energy technologies, which currently have a low market penetration in the country. The commercial viability of such an investment is expected to be replicated in other sectors of the economy.


(2) Standards for governance and corporate conduct
The development of higher standards for energy management and accountability through: (i) introducing energy benchmarking and auditing into institutional management; and (ii) reviewing alternative financing mechanisms for scaling up energy efficiency investments (e.g. through ESCO models); trainings in international energy management.

The Client

KTZ (100 per cent owned by Samruk-Kazyna) is a vertically integrated company that manages railway infrastructure and operates freight and passenger train services. KTZ plays a key role in the Kazakh national transport sector, handling 58 per cent of freight and 11 per cent of passenger traffic.

EBRD Finance

Senior loan of up USD 40 million.

Project Cost

USD 60 million.

Environmental Impact

Categorised B. The due diligence on the proposed project was conducted by Royal Haskoning consultants in 2011 and included review of the implementation status of the previously agreed ESAPs; environmental, health and safety audit of the selected facilities subject to energy efficiency investments, and an environmental and social analysis of the proposed investment programme.

The ESDD identified that in the long-run, the implementation of the project will allow reduction of air emissions and heat losses due to the introduction of solar panels and replacement of coal-fire burned boilers with gas boilers.

There will be temporary adverse impacts during the construction as demolition of old boilers will generate hazardous waste, which will need to be properly collected and disposed of. Currently there is no focal point for the overall implementation of the ESAP or responsibilities assigned for implementation of specific actions.

The due diligence also identified that there is no EHS management system within JSC KTZ central office, which would meet the requirements of ISO 14001/OHSAS 18001. Similarly, there is also no such EHS management system in any of the visited KTZ assets and currently the visited facilities are virtually unsupported and autonomously-regulated in terms of EHS management. Mitigation measures for the identified issues have been developed and included in the ESAP.

The ESAP contains measures aimed at improving working conditions and efficient implementation of the grievance mechanism; developing procedures for safe use and management of hazardous substances; waste management and achieving compliance with legal requirement for waste collection, storage and permitting; wastewater monitoring and permitting; air emissions monitoring; developing and certifying Environmental and Occupational Health and Safety Management Systems; supervision of contractor's activities; assigning responsibilities for implementation of the ESAP; developing stakeholder engagement plan, etc.

The ESAP will be agreed with the client prior to submission to the EBRD Board of Directors.

Technical Cooperation

Technical cooperation package in connection with the Project is expected to include procurement and project implementation components.

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

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