Kyzylorda Electricity Distribution

Location:

Kazakhstan

Project number:

46770

Business sector:

Power and energy

Notice type:

Public

Environmental category:

B

Target board date:

10 Dec 2014

Status:

Signed

PSD disclosed:

25 Sep 2014

Translated vesion of this PSD: Russian

Project Description

The EBRD is considering to provide a senior loan of KZT 5 billion (EUR 22 million equivalent) to the Joint Stock Company Kyzylorda Regional Electricity Company (KREC), a power utility, responsible for distribution of electricity in the Kyzylorda Oblast, wholly owned by the Oblast Akimat. The proceeds of the loan will be used to finance the rehabilitation and modernization of low and medium voltage distribution networks in Kyzylorda Oblast. The project will include installation of modern electricity meters and automatic control systems, strengthening the capacity and efficiency of transformers, and distribution lines aimed at reducing distribution network losses and increase in energy efficiency. The expected technical and commercial losses reduction will lead to significant reduction of related carbon emissions as the power generation sector of Kazakhstan is of high carbon intensity.

Transition Impact

With this investment the Bank supports restructuring of the public utility aimed at improving operating efficiency and restoring its financial health. On top of the expected improvement in the operating performance, the Project will also entail commercialisation of the Borrower’s operations and increased transparency. This will be achieved via TC funded independent advisor, that will be tasked to review current billing and collection practices, develop a Corporate Development Plan to correct the situation and help with its implementation. In addition, the Bank will request conduct of the annual IFRS by a reputable audit firm and compliance with its ESAP. Thus, the Project will increase revenue collections and introduce more commercial business practices by addressing energy efficiency improvements and increasing reliability of power supply.

The Client

Joint Stock Company Kyzylorda Regional Electricity Company ("KREC", or the “Company”), a power utility, responsible for distribution of electricity in the Kyzylorda Oblast (the “Oblast”), wholly owned by the Oblast Akimat.

EBRD Finance

A senior loan in amount of KZT 4,500,000,000 (c.EUR 18 million) equivalent).

Project Cost

Total projects costs KZT 5,500,000,000 (c.EUR 23 million). .

Technical Cooperation

The following technical cooperation is envisaged to go along with the project:

  • TC to conduct a technical and environmental due diligence
  • TC to hire a consultant to help implement the project (PIU consultant)
  • TC to hire a consultant to develop a Corporate Development Program to improve billing and collection and other management practices.
 

Business opportunities

For business opportunities or procurement, contact the client company.

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