Far East Distribution Loan

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Translated version of this PSD: Russian The EBRD is considering financing part of the investment programme of JSC “Far East Distribution Company” ( DRSK) aimed at modernisation of the existing electricity network in the Far East region, Russia. The loan will be channelled through JSC “RusHydro” and partially will be used to refinance the existing debt of DRSK. The loan will finance network modernisation and upgrade programme which will result in improved reliability, reduced losses and the reduction of CO2 emissions. The programme envisages the installation of a new grid management and control system, including smart meters, which will provide more advanced and efficient service to DRSK customers. The Bank will provide technical assistance to DRSK in order to review the investment needs and also to develop a long term investment programme and action plan for the rehabilitation and modernisation of the electricity network in line with the best international practices. The loan will be provided to JSC “RusHydro” – power company with 36.5 GW of installed electricity capacity in Russia of which 71per cent is comprised of hydro power generation. RusHydro through JSC “RAO ES of East” (vertically integrated power utility in the Far East region) controls DRSK that operates 54,000km of electric lines and 708 substations across five regions of the Russian Far East. Senior loan of up to RUB 4.4bn (EUR 100m) is envisaged for the project. The total operation amount for the Project is estimated at RUB 9bn (EUR 204mn). Category B. Environmental and social issues associated with electricity network upgrade project can be readily assessed and mitigated. The Project will be associated with significant environmental benefits as the result of improvements in distribution lines efficiency. The Bank will undertake an Environmental and Social Due Diligence (ESDD) of the Project, to confirm that the project is structured to meet the Bank's PRs. Based on the ESDD, a corporate Environmental and Social Action Plan (ESAP) and Stakeholder Engagement Plan (SEP) will be developed for the project. The PSD will be updated once the ESDD has been completed. TC technical audit, action plan and project preparation for the investment programme of DRSK using the Bank’s TC Framework for the Sustainable Development of the Power Sector.