Kyzylorda Street Lighting Project

Location:

Kazakhstan

Project number:

47196

Business sector:

Municipal and environmental infrastructure

Notice type:

Public

Environmental category:

B

Target board date:

20 Jul 2016

Status:

Board Approved

PSD disclosed:

05 Nov 2015

Translated version of this PSD: Russian

Project Description

EBRD is considering providing a senior loan to Turgyn Uyi Kyzylorda LLP (the "Company"), a municipal company responsible for street lighting management in Kyzylorda. The Company is wholly owned by the City of Kyzylorda (the "City").

The Project will finance modernisation of the street lighting infrastructure through the following components:

(i) construction of a modern street lighting control centre, (ii) installation of control and monitoring system,

(iii) partial rehabilitation of the street lighting infrastructure, and

(iv) installation of light-emitting diodes ("LED") luminaries.

In addition to the investment part of the Project, the Bank will provide TC grants for the project implementation support and corporate development of the Company in order to ensure its long-term sustainable development.

Project Objectives

The Project aims at reducing the operating cost of the street lighting system to the City through the introduction of modern energy efficient technologies while significantly improving the service quality for the population of the City. The Project will not only modernise the infrastructure but also introduce better contractual arrangements to run the system.

Transition Impact

The Project will establish a good example for sound and transparent institutional framework for outsourcing O&M services in the sector with a view of introducing effective competition among specialised private companies and will lead to a greater private sector participation. The Project will create solid financial and operational conditions for private operators and will facilitate much-needed efficiency improvements in the provision of the O&M services. It will also promote a long-term, nonrecourse financing of the public asset investments, and introduce incentive-based Public Based Management Contracts ("PBMCs").

The Project will introduce modern energy efficient street lighting technologies and effective system management structure, which will significantly reduce energy consumption and, as the result, O&M costs and the service quality in terms of increasing reliability of service, as well as providing wider street lighting service coverage.

The transaction will introduce appropriate corporate governance standards with the Company. It will set up a new concept of accountability for quality and quantity of the public assets management as well as formalise the system of institutional, accounting and managerial control in the sector.

Client Information

Turgyn Yui Kyzylorda LLP.

Turgyn Yui Kyzylorda LLP, a municipal company wholly owned by the City, is the Borrower and the ultimate beneficiary of the Project. Kyzylorda Oblast and the City will provide the overall institutional support for the Project implementation and facilitation of sector reforms.

EBRD Finance Summary

KZT 2,300,000,000.00

A senior loan of up to KZT 2.3 billion in total, potentially co-financed with resources from the EBRD's Green Energy Special Fund ("GESF"). The final proportion of the EBRD and GESF loan amounts will depend on the final structure of the financial framework.

Total Project Cost

KZT 2,760,000,000.00

KZT 2.76 billion, including the EBRD loan, and a capital grant from the City.

Environmental and Social Summary

The Project has been categorised B under the 2014 Environmental and Social Policy. The Project will enable the Company to improve its street lighting services through the refurbishment and modernisation of the old street lighting infrastructure in the City by replacing existing HPS and mercury-based lamps with modern energy-efficient ones. The planned PIP is expected to result in the reduction of energy consumption and greenhouse gas emissions through enhanced energy efficiency, better quality and reliability of services, and improved street safety conditions for the local population. Any adverse environmental and social impacts associated with this sub-project are site-specific and can be readily addressed through mitigation measures.

The Environmental and Social Due Diligence (“ESDD”) was carried out by external consultants as part of the Feasibility Study and included an independent environmental and social audit/review of the Company's current operations and facilities, Company’s existing EHS management systems and policies/procedures, and an analysis of the potential environmental and social impacts associated with the PIP. The ESDD confirmed that implementation of the PIP will reduce energy consumption by 60 per cent at the refurbished sections due to the change from inefficient HPS and mercury lamps to the Best Available Technology in the form of LED luminaries. Greenhouse gas emissions are estimated to be reduced by over 26,400 tonnes of CO2 equivalent per year. The substitution of sodium and mercury based lamps within the existing lighting network will lead to improved environmental and social conditions in the City.

The Sub-project has been structured to meet EBRD Performance Requirements (PRs). An E&S Management Plan for the refurbishments works has been developed and will need to be included in the tender documents and work contracts. This covers the appropriate safe disposal of the old mercury and sodium based lamps due to their hazardous content; preventative management of health and safety risks to workers and public safety, and mitigation of road safety issues through appropriate temporary traffic and safety arrangements during the refurbishment works.

The ESDD consultants have also developed an Environmental and Social Action Plan (“ESAP”) to address the necessary improvement and mitigation measures and the corrective actions identified during due diligence. Specifically, the ESAP requires the Company to develop an Environmental Management System in line with ISO 14001 and an Occupational Health & Safety Management System in line with OHSAS 18001 standards; to develop a formalised Human Resources (HR) policy, including provisions for equal opportunities and a grievance mechanism in line with PR2; to develop and implement a retrenchment procedure for any planned labour restructuring programme; to incorporate Environmental Health & Safety and Social requirements into construction and maintenance contracts and to monitor contractors compliance and to develop procedures for the appropriate collection, storage and final disposal of construction waste and hazardous waste in line with good international practice. The Company also needs to finalise and implement a Stakeholder Engagement Plan (“SEP”), including a grievance mechanism, to ensure adequate information disclosure to affected stakeholders prior to the commencement of works. The TC funded Corporate Development Programme consultants will assist the Company in building its internal capacity on E&S matters to support implementation. The ESAP has been agreed with the Company.

The Bank will monitor the project’s environmental and social performance and compliance with EBRD PRs by reviewing annual reports prepared by the Company on environmental and social matters, and implementation of the ESAP. The Bank may also undertake monitoring site visits.

Non-technical summary: English | Russian

Technical Cooperation

The following technical co-operation ("TC") assignments are envisaged as part of this project:

Pre-Signing

TC 1: Technical Due Diligence - financed by the Government of Taiwan (€ 125,000, on-going).

Post-Signing TC under Framework for Street Lightning

TC 2: Project Implementation Support to include

(i) initial assessment;

(ii) procurement support; and

(iii) the project implementation monitoring.

Up to € 100,000 to be financed by an international donor or the EBRD Shareholder Special Fund ("SSF").TC 3: Corporate Development Support to the Company to develop standardised monitoring and reporting system. Up to € 50,000, to be financed by an international donor or the SSF.

Company Contact Information

Mr. Aidos Ayaganov

a_aidos77@mail.ru
+7 777 254 45 45

Turgyn Yui Kyzylorda LLP Akmeshit mircodistrict,
120011, Kyzylorda Kyzylorda oblast,
Kazakhstan
 

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.