Talimarjan Power Project

Location:

Uzbekistan

Project number:

50116

Business sector:

Power and energy

Notice type:

Public

Environmental category:

A

Approval date:

31 Oct 2018

Status:

Signed

PSD disclosed:

24 Aug 2018

Translated version of this PSD: Uzbek

Project Description

Provision of financing for the construction of an additional 900 MWe of Combined Cycle Gas Turbine (CCGT) generation capacity at the existing Talimarjan Power Plant ("TPP" or the "Project"), located in the Southern Kashkadarya region. The Project will be implemented by the Unitary Enterprise Talimarjan TPP, a 100% subsidiary of JSC "Uzbekenergo", a state-owned vertically integrated power utility.

Project Objectives

The Project will improve energy efficiency and reliability of the power supply in Uzbekistan and contribute to the Government of Uzbekistan's initiative to modernise the country's power generation capacity. Overall, the proposed Project forms part of an ambitious power sector reform initiative in Uzbekistan and has a positive impact in securing the energy supply that is critical to achieving the country's development objectives.

Transition Impact

The expected transition impact of the Project is twofold:

  • Well-Governed: the Project will contribute to the institutional and regulatory framework for the power sector in Uzbekistan via a comprehensive technical cooperation assignment and a capacity building component through the Council of European Energy Regulators (CEER). 
     
  • Resilient: the Project will contribute to the improvement of the flexible capacity as well as to improving climate resilience and water intensity of the sector through the introduction of effective technologies as well as new technical cooperation across the sector, including renewables.

Client Information

UZBEKISTAN SOVEREIGN

Republic of Uzbekistan, on-lending to JSC "Uzbekenergo", a 100% state-owned vertically integrated power utility

EBRD Finance Summary

USD 240,000,000.00

The Project will be co-financed with the Asian Development Bank, which in December 2017 approved a USD 450 mln lending facility to the Republic of  Uzbekistan for the Project. In addition, Uzbek Fund for Reconstruction and Development (UFRD) will provide financing of approximately USD 175 mln.

Total Project Cost

USD 1,063,000,000.00

Environmental and Social Summary

Category A (ESP 2014). The addition of a 900 MW Combined Cycle Gas Turbine (CCGT) power plant to an existing Talimarjan Power Plant (TPP) requires an Environmental and Social Impact Assessment (ESIA) of the proposed investment in accordance with the Bank's Environmental and Social Policy (2014).  The ESIA was disclosed on the 29 of June 2018 to allow for 120 days disclosure period in line with the Bank's Environmental and Social Policy.

TPP consists of an 800 MW gas fired unit commissioned in 2004 (referred to as TPP0) and the two 450 MW CCGT units commissioned in 2018 (TPP1).  TPP1 was co-financed by the ADB and JICA.  The current Project is the extension of TPP with the addition of two 450 MW Gas Fired Turbines (900 MW capacity) to be constructed at the same site.  An ESIA for the current Project has been undertaken by an independent advisor on behalf of JSC Uzbekenergo, and includes the new CCGT as well as cumulative impacts from the existing 800 MW gas fired power plant (TPP0) and the two 450 MW CCGT units (TPP1) in line with National, EU and international standards.

The Bank's Environmental and Social Due Diligence (ESDD) was undertaken by an independent consultant and included a review of current operations at the existing facility, as the new CCGT plant will share some of the existing infrastructure of the Talimarjan Power Plant. ESDD consisted of an environmental and social audit of the existing power plant and an ESIA of the new 900 MW CCGT plant and associated facilities.

The existing plant is well kept, operates in compliance with National environmental standards and has an effective environmental, health and safety management system. The ESDD concluded that, although in principle the Company has the institutional capacity to implement the Bank's Performance Requirements, additional capacity building will be required to meet good international practices. This has been included in the Environmental and Social Action Plan (ESAP).  In terms of technology, the new CCGT will meet the Bank's Performance Requirements (PRs) and is structured to meet EU Industrial Emissions Directive standards. Overall, the proposed technology, i.e. F-class turbines, can attain EU standards in terms of efficiency and emissions and the CCGT will include continuous emission monitoring systems.  The estimated carbon intensity of the new unit is below 370gCO2(eq.)/kWh; which is within the World Bank Group (2008) Net Carbon Intensity Guideline of 348-374gCO2(eq.)/kWh.  This estimate is comparable with the current European Investment general guideline of 350gCO2(eq.)/kWh; and furthermore, significantly below the average carbon intensity of power production in Uzbekistan (operating margin of 673gCO2(eq.)/kWh according to the joint MDB harmonised emission factors database).  The ESIA concluded that the Project will not have negative impact on the air quality.

The ESDD concluded that the principal environmental impact is associated with water use at the TPP and the water cooling systems. TPP is designed to operate open circuit cooling system using water from irrigation channels. This results in water loss through evaporation. The ESDD and ESIA reviewed the various options in terms of both cooling technology and overall water management in the areas taking into account long term climatic projections that may further impact water availability. Lack of cooling water could result in reduced operations. The conclusion thus far, is that water use should be reduced to ensure safe operating environment and limit water loss.  Additional studies are being commissioned and a water reduction and catchment management plan TC is planned.  The ESAP has been updated to reflect the results of further studies and public consultations to date.  This will include further water management and that the Company will include in the design and tendering process closed circuit cooling towers and no abstraction from the canal except for make-up water, if evaporative cooling is used.  This will save between 90-98% of water use depending on the final design.  The Bank will monitor this process together with ADB as part of the tender process, construction and a commissioning audit is required as part of the ESAP. 

The ESDD confirmed that the Project has the capacity to fully implement the Bank's Environmental, Labour and Health and Safety standards on the Project. The measures to manage any potential risks associated with labour and working conditions have been included in the ESAP and will be agreed with the client.  An ESAP has been agreed with Uzbekenergo.  The Environmental and Social Impact Assessment is available for this Project on the Bank and the Company's websites.

The Bank will monitor the implementation of the Project.

There is an Environmental and Social Impact Assessment available for this Project.

Technical Cooperation

The Bank's technical, procurement, environmental and social, financial and legal due diligence of the Project will capitalize on the comprehensive due diligence performed by ADB. In November 2017, ADB published a report on the Project, including the results of the due diligence and a project administration manual. TC technical review and project preparation will be carried out that will confirm appropriateness of technical solution and propose improvements for energy efficiency and implementation plans. Technical Cooperation funds might be used in the implementation of the policy dialogue activities the Bank is considering implementing.

Company Contact Information

JSC Uzbekenergo: Mr. Olim Yusupov - PIU Head, Talimarjan TPP Project
pmutpp2p@gmail.com
+998712333498
www.uzbekenergo.uz
6 Istiklol Street, Tashkent, 100000, Uzbekistan

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