RusHydro Bond Issue

Location:

Russia

Project number:

41886

Business sector:

Power and energy

Notice type:

Public

Environmental category:

B

Target board date:

29 Sep 2010

Status:

Completed

PSD disclosed:

22 Oct 2010

Translated version of this PSD: Russian

Project Description

In October 2010 EBRD participated in RUB 20 billion bond issue publicly placed by RusHydro, Russian hydro generating company. Initially it was envisioned that EBRD financing will contribute to the modernisation project at Saratovskaya HPP located on the Volga river and related goods, works and services will be procured in accordance with the Bank’s Procurement Rules in an amount not less than the Bank’s participation in this bond issue. Subsequently the parties agreed that the Bank could instead participate in the financing of Volzhskaya HPP rehabilitation project.

Transition Impact

Transition impact of this transaction would derive from several key aspects: promotion of energy efficiency and power generation from renewable sources; enhancement of Environmental, Health and Safety management through the implementation of the Environmental and Social Action Plan; promotion of capital market development by supporting the first rouble bond issue on the Eurobond market by a Russian energy company.

The Client

OJSC “RusHydro” (RusHydro), a publicly listed Russian power generating company owning and operating 25 GW of hydropower capacity, 60% owned by the Government of Russia.

EBRD Finance

EBRD purchase the bonds in the amount of RUB 4.5 billion.

Project Cost

Total amount of the bond issue is RUB 20 billion.

Environmental Impact

The Project was categorised B per the Bank’s 2008 Environmental and Social Policy. The associated project will be rehabilitation at Volzhskaya HPP (subject to internal approvals of EBRD). Due diligence was based on

(i) past Bank activities with RusHydro and the Environmental Action Plan associated with a past (2006), on-going transaction;

(ii) a detailed due diligence effort undertaken by consultants in late 2009 and focussing on safety, environmental and social issues, as well as a dedicated visit at Saratovskaya HPP undertaken by Bank specialists.

Measures recommended by the independent consultants and validated by both the Bank and RusHydro mainly take into account

(1) the lessons learned from the 2009 Sayano-Shushenskaya (S-SH) incident and

(2) the specificities of Volzhskaya HPP, and should sanction and support RusHydro's on-going efforts towards bringing their dam and plant safety and environmental / social processes and procedures in line with international good practice. Main ESAP points are as follows:

  • Dam and plant safety: requirements to introduce turbine vibration monitoring and alarm systems, to install protection against flooding of the machine and control rooms, and to put in place back-up sources of power to be able to operate cranes and gates in emergency situations (these are all lessons learned from the S-SH incident)
  • Environment: minimisation of oil volumes in turbines, improvements to waste management, maintenance of ISO 14000 certification, monitoring of water quality.

An Environmental and Social Action Plan (ESAP) has been agreed between the Bank and RusHydro to sanction agreed measures. Its implementation will be monitored by the Bank.

Technical Cooperation

None.

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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