Kyzylorda District Heating

Location:

Kazakhstan

Project number:

45787

Business sector:

Municipal and environmental infrastructure

Notice type:

Public

Environmental category:

B

Target board date:

17 Dec 2014

Status:

Repaying

PSD disclosed:

10 Oct 2014

Translated version of this PSD: Russian

Project Description

The EBRD is considering providing a loan of up to USD 18 million to the State Communal Enterprise Kyzylordateploelektrotsentr (the “Company”), a municipal district heating company in the city of Kyzylorda (the “City”) in Kazakhstan to support a Priority Investment Programme (“PIP”) with the goal to rehabilitate and upgrade the district heating (“DH”) infrastructure in the City.

The project will include measures for the modernisation and optimisation of the DH infrastructure through network rehabilitation, replacement of some gas turbines and introduction of individual heating substations (“IHS”) at the level of buildings equipped with heat meters ensuring automated control and regulation of heat supply. This will result in enhanced energy efficiency, reduction of hot water and heat losses in the system and an improvement in environmental standards.

Transition Impact

This project would deliver the following transition impact:

(i) Private sector participation – introduction of a performance based Public Service Management Contract (“PSMC”) with a private operator;
(ii) Corporate Development and Restructuring focused on cost reduction measures in district heating utilities;
(iii) Tariff increases and collection improvements with the aim of achieving operating cost recovery in district heating utilities;
(iv) Instalment of building level meters and meter based billing as an instrument to incentivise energy efficiency;
(v) Application of renewable technologies for heat generation

The Client

State Communal Enterprise Kyzylordateploelektrotsentr, a municipal district heating company in the city of Kyzylorda, Kazakhstan.

EBRD Finance

A senior loan to the Company in the amount of up to USD 18 million (EUR 14 million equivalent).

Project Cost

USD 46 million (EUR 36 million equivalent) including related technical cooperation to support the Company with the project preparation and implementation.

It is expected that the EBRD loan will be supplemented by

(1) a USD 5.5 million Clean Technology Fund (“CTF”) co-financing loan from the EBRD Climate Investment Fund on concessionary terms, subject to the project approval by the CTF, and

(2) a capital grant co-financing (amount to be confirmed) from the Government of Kazakhstan under the Enhanced Partnership –District Heating Modernisation Framework, subject to further project approval.

Environmental Impact

The proposed project has been categorised B in accordance with the 2008 EBRD Environmental and Social (“E&S”) Policy, as the potential impacts are expected to be site specific and readily identifiable and addressed through mitigation measures.

The environmental and social due diligence for the project, which is ongoing with EBRD TC funds, includes an independent third party environmental and social audit to assess the Client’s management capacity and systems to manage environment, health, safety and labour issues in its operations and an analysis of the potential (future) E&S impacts and benefits. It will also assess the Client’s ability to carry out the Project in compliance with the Bank’s Performance Requirements.

An ESAP will be prepared for the project, and a Stakeholder Engagement Plan will be developed that will include a grievance mechanism. And information on environmental and social performance and a summary of the agreed Action Plan will be released to stakeholders.

This PSD will be updated when the results of due diligence are known.

Technical Cooperation

Pre-Signing

  • TC 1: Project due diligence including the DH PIP and the development of a comprehensive ESAP (EUR 295,000, funded by the EUs Investment Facility for Central Asia (“IFCA”);

Post-Signing

  • TC 2: Project Implementation Support including assistance with procurement of goods and services under the PIP and implementation of the ESAP. The estimated cost of the assignment is up to EUR 650,000, to be financed by an international donor;
  • TC 3: Corporate Development Programme to support operational and financial improvements of the Company, including introduction of a PSMC between the Company, the City Akimat and a private operator. The estimated cost of the assignment is up to EUR 450,000, to be financed by an international donor.
 

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

Project Complaint Mechanism (PCM)

The Project Complaint Mechanism (PCM) is the EBRD's accountability mechanism. It provides an opportunity for an independent review of complaints from individuals and organisations concerning EBRD-financed projects which are alleged to have caused, or are likely to cause, environmental and/or social harm.

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.