Lipetsk Municipal Infrastructure Project

Location:

Russia

Project number:

34523

Business sector:

Municipal and environmental infrastructure

Notice type:

Public

Environmental category:

B

Approval date:

28 Oct 2008

Status:

Complete

PSD disclosed:

22 May 2008

Project Description

The proposed project would consist of a senior loan of up to RUB 740 million (equivalent to EUR 20 million) to Lipetsk Municipal Energy Company LLC. The company provides district heating, electricity distribution, water supply and sewage services in the City of Lipetsk. The Company will be majority owned by the Municipality of Lipetsk together with a minority private partner.

The project will finance the rehabilitation and upgrading of Lipetsk’s electricity distribution, district heating and water supply and sewerage networks with the objective to improve efficiency of operations and the quality of utility services provided to the citizens of Lipetsk.

The City of Lipetsk will provide a financial guarantee to the project. The political support to the project will be ensured through a project support letter with the Lipetsk Oblast.

Transition Impact

The proposed project will have an impact on the transition process through:

  1. adjustment of tariff structure to achieve full cost recovery and long-term financial sustainability of the district heating, electricity distribution and water and wastewater sectors in the City;
  2. billing according to actual consumption, motivating end-users to economize natural resources;
  3. transfer of skills during the implementation phase including the procurement, design, installation and contracts supervision in accordance to the best available international engineering practice.
  4. Demonstration effect of the efficient institutional set up of a municipal utility, covering tariff policy, performance benchmarking, transparency and corporate governance through adoption of service contracts between the City of Lipetsk and the Company, adoption of IFRS financial reporting.

The Client

The borrower will be Lipetsk Municipal Energy Company LLC (the Company).

EBRD Finance

Loan of up to RUB 740 million (equivalent to EUR 20 million) to the Lipetsk Municipal Energy Company LLC.

Project Cost

RUB 920 million (equivalent to ~ EUR 25 million).

Environmental Impact

Screened B/1. The project is expected to have significant positive environmental impact due to improved quality and efficiency of district heating, electricity distribution, water supply and sewage services in the City of Lipetsk. The extent of the environmental benefits will depend on the scope of the priority capital investments programme. The environmental due diligence will be part of the Feasibility Study and will bring forward environmental considerations to be taken into account during the selection of the priority investment components.

This section will be amended upon completion of the Feasibility Study.

Technical Cooperation

The Feasibility Study for the Project was prepared by COWI Consult International and was financed by the Company.

 

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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