Sugd Energy Loss Reduction project

Location:

Tajikistan

Project number:

41538

Business sector:

Energy

Notice type:

State

Environmental category:

B

Approval date:

01 Jun 2011

Status:

Repaying

PSD disclosed:

31 Mar 2011

As permitted by paragraph 2.6 of Section III of the Access to Information Policy, disclosure of this PSD was deferred in accordance with paragraph 1.4.4 of the Directive on Access to Information.

Project Description

In June 2011, the Bank approved USD 10.15 million sovereign guaranteed loan to Barki Tojik for the supply and installation of new electricity meters, meter reading system and automated billing system, in the Sugd region of Tajikistan to reduce the existing level of electricity losses in the network, increase bill collection levels and improve quality of electricity supply. In 2016 during the implementation of the Project interim results were encouraging and Barki Tojik requested the Bank, and the Bank approved in 2016, an increase of the original loan by USD 4.0 million. The extension further reduced the electricity distribution losses by partial rehabilitation of related electricity distribution network equipment to reduce network losses and to improve quality of supply. 

Together these measures supported the transition of Barki Tojik to a profitable commercial entity.

Project Objectives

The objectives of the Project are (i) to reduce the existing level of electricity losses in the network, (ii) to increase collections and (iii) to improve the quality of electricity supply by purchase and installation of modern electricity meters, meter reading systems, design and installation of an automated billing system, rehabilitation of low-voltage power distribution network in the city of Khujand in Sugd region, second largest region in Tajikistan by population.

The Project supported the ongoing transition of Barki Tojik to a profitable commercial entity and is being replicated to other major cities of Tajikistan.

Transition Impact

The original Project which was signed in 2011 involved financing the installation of electronic metering and automated billing, partial rehabilitation of related electricity distribution network equipment to reduce distribution network losses and improve quality of supply. The Project increased revenue collections and introduced commercial business practices of the Client, whereby addressing energy efficiency and increasing the reliability of power supply. Advanced metering infrastructure, including a billing system, was introduced. As part of the Project requirement, an Environmental and Social Action Plan (ESAP) has been developed and was partially implemented. The Project also supports a plan developed to strengthen the regulatory framework as well as improvements in corporate governance and business conduct of the Client through the introduction of IFRS reporting, ESAP.

Client Information

BARKI TOJIK OJSC

Barki Tojik is a 100% state-owned power utility accounting for 80% of domestic power output and responsible for transmission and distribution of electricity almost in the entire Tajikistan. Barki Tojik is controlled by the Government of Tajikistan and its Supervisory Board comprises of government ministers and is chaired by the Prime Minister. In late 2020, the transmission and distribution units of Barki Tojik were incorporated into separate legal entities.

 

EBRD Finance Summary

EUR 12,453,245.32

USD 14.15 million sovereign guaranteed loan to Barki Tojik. The Project is co-financed with a parallel EUR 7.0 million loan from the European Investment Bank (EIB) and a EUR 7.0 million grant from the EU Investment Fund for Central Asia.

Total Project Cost

EUR 26,453,245.32

USD 30.45 million

Additionality

The Bank's additionality related to the lack of long-term financing for infrastructure projects in Tajikistan. 

Environmental and Social Summary

Categorised B under the 2008 Environmental and Social Policy. An increase in the loan amount (2011) was used to finance the construction of a new substation and potential impacts were readily identified and mitigated. The independent environmental and social due diligence was conducted in March-April 2016. The ESDD included the site visit, review of the current environmental, health and safety and social practices employed by BT and an assessment of impacts and benefits of the proposed investment. The ESDD also included the status of the previously agreed ESAP. The findings indicated that the local communities generally support Project activities as tangible benefits include better electricity supply and meter readings system. Project-related information was communicated to stakeholders on a regular basis. However, the implementation of ESAP has not progressed as was envisaged by original implementation deadlines due to limited resources. It is intended to use PIU consultants to support the Company in implementing the ESAP.

Technical Cooperation and Grant Financing

Technical and environmental due diligence of the Project

Supervision of the physical implementation of the Project

Assistance for Barki Tojik's operational management focused on IFRS implementation

Assistance for energy sector regulatory support

Review, design and preparation of the Qairokkum HPP rehabilitation

Company Contact Information

Barki Tojik OSHC
barkitojik@gmail.com
http://www.barqitojik.tj
64 Ismoil Somoni Avenue Dushanbe, Tajikistan 734026

Implementation summary

Following approval of the project by the EBRD's Board of Directors in June 2011, the loan agreement was signed in June 2011 to finance purchase and installation of modern electricity meters, meter reading systems, design and install an automated billing system in Khujand, second largest city of Tajikistan.

The loan agreement became effective in May 2013, and Project's physical implementation began in early 2014. In 2016, at request of Barki Tojik, the Bank approved an increase of the loan. The extension further reduced the electricity distribution losses by partial rehabilitation of related electricity distribution network equipment to reduce network losses and to improve quality of supply. The physical implementation of the Project was split into three components, which were successfully completed in 2017 and 2019 (the extension).

The Project objectives (i) to reduce the existing level of electricity losses in the network, (ii) to increase collections and (iii) to improve the quality of electricity supply by purchase and installation of modern electricity meters, meter reading systems, design and installation of an automated billing system, rehabilitation of low-voltage power distribution network in the city of Khujand in Sugd region, second largest region in Tajikistan by population, were achieved.

The Project supported the ongoing transition of Barki Tojik to a profitable commercial entity and the Project is being replicated to other major cities of Tajikistan.

PSD last updated

21 Feb 2022

Understanding Transition

Further information regarding the EBRD’s approach to measuring transition impact is available here.

Business opportunities

For business opportunities or procurement, contact the client company.

For business opportunities with EBRD (not related to procurement) contact:

Tel: +44 20 7338 7168
Email: projectenquiries@ebrd.com

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Tel: +44 20 7338 6794
Email: procurement@ebrd.com

General enquiries

Specific enquiries can be made using the EBRD Enquiries form.

Environmental and Social Policy (ESP)

The ESP and the associated Performance Requirements (PRs) set out the ways in which the EBRD implements its commitment to promoting “environmentally sound and sustainable development”.  The ESP and the PRs include specific provisions for clients to comply with the applicable requirements of national laws on public information and consultation as well as to establish a grievance mechanism to receive and facilitate resolution of stakeholders’ concerns and grievances, in particular, about environmental and social performance of the client and the project. Proportionate to the nature and scale of a project’s environmental and social risks and impacts, the EBRD additionally requires its clients to disclose information, as appropriate, about the risks and impacts arising from projects or to undertake meaningful consultation with stakeholders and consider and respond to their feedback.

More information on the EBRD’s practices in this regard is set out in the ESP.

Integrity and Compliance

The EBRD's Office of the Chief Compliance Officer (OCCO) promotes good governance and ensures that the highest standards of integrity are applied to all activities of the Bank in accordance with international best practice. Integrity due diligence is conducted on all Bank clients to ensure that projects do not present unacceptable integrity or reputational risks to the Bank. The Bank believes that identifying and resolving issues at the project assessment approval stages is the most effective means of ensuring the integrity of Bank transactions. OCCO plays a key role in these protective efforts, and also helps to monitor integrity risks in projects post-investment.

OCCO is also responsible for investigating allegations of fraud, corruption and misconduct in EBRD-financed projects. Anyone, both within or outside the Bank, who suspects fraud or corruption should submit a written report to the Chief Compliance Officer by email to compliance@ebrd.com. All matters reported will be handled by OCCO for follow-up. All reports, including anonymous ones, will be reviewed. Reports can be made in any language of the Bank or of the Bank's countries of operation. The information provided must be made in good faith.

Access to Information Policy (AIP)

The AIP 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 following its entry into force on 1 January 2020. Please visit the Access to Information Policy page to find out what information is available from the EBRD website.

Specific requests for information can be made using the EBRD Enquiries form.

Independent Project Accountability Mechanism (IPAM)

If efforts to address environmental, social or public disclosure concerns with the Client or the Bank are unsuccessful (e.g. through the Client’s Project-level grievance mechanism or through direct engagement with Bank management), individuals and organisations may seek to address their concerns through the EBRD’s Independent Project Accountability Mechanism (IPAM).

IPAM independently reviews Project issues that are believed to have caused (or to be likely to cause) harm. The purpose of the Mechanism is: to support dialogue between Project stakeholders to resolve environmental, social and public disclosure issues; to determine whether the Bank has complied with its Environmental and Social Policy or Project-specific provisions of its Access to Information Policy; and where applicable, to address any existing non-compliance with these policies, while preventing future non-compliance by the Bank.

Please visit the Independent Project Accountability Mechanism webpage to find out more about IPAM and its mandate; how to submit a Request for review; or contact IPAM  via email ipam@ebrd.com to get guidance and more information on IPAM and how to submit a request.

 

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