Khanty Mansi District Heating Project

cancelled

The EBRD is considering a loan to “YuTEC” (Yugra Energy Company), the power transmission and distribution company, wholly owned by Khanty-Mansi Autonomous Okrug (the “Okrug”). The loan would finance the regional priority investment programme in district heating sector with significant cost saving and environmental potential. The overall project would focus on rehabilitation and upgrade of the municipal local heating systems through refurbishment of up to 164 small electricity and heat generating facilities (i.e. diesel fired generators and boilers) and rehabilitation of adjacent distribution networks) in small settlements of the Okrug. Energy Efficiency will be improved and costs optimization will be achieved by switching from the fuel oil to local fuels including bio-fuel. The project would also include the regulatory framework improvement component for the municipal and housing services sector of Okrug. The operation will bring efficiency improvement in provision of the municipal heating and electricity distribution services in small settlements, will support institutional strengthening, commercialisation, tariff reform, enhance transparency of the budget subsidy mechanism, and introduce the appropriate incentive based service/lease contracts with operating company, reflecting the international best practice in respect to operator performance. Strong demonstration effects are expected for the benefit of neighbouring regions which could follow the lead of Khanty-Mansi Autonomous Okrug “YuTEC” (Yugra Heat and Energy Company), the power transmission and distribution company, owned by the Khanty-Mansi Autonomous Okrug. The loan up to RUB 1,500 million (equivalent to ~ EUR 33.6 million) to YuTEC under a guarantee of Khanty-Mansi Autonomous Okrug RUB 2,000 million (equivalent to ~ EUR 44 million). The project was screened B/1. As a result an environmental, health and safety audit of the existing facilities of the Okrug and an Environmental Analysis (EA) of the potential environmental impacts of the priority investment programme (PIP) according to EBRD's Environmental Policy (2003) were carried out by AF Consult Oy. Based on the findings and recommendations of the EA a Health, Safety, Environment and Social Management Plan (HSESMP) was prepared. This plan has been approved by the YuTEC, who will report on its implementation on an annual basis. The Project shall be designed, constructed and operated to meet national legal requirements and relevant EU standards (BAT) and good practice on health and safety requirements. The results of the Environmental Analysis of the project indicate that it will have positive environmental and social effects. These include: The Project may cause some local environmental impacts and occupational health and safety risks especially during the construction phase. The impacts and risks that may arise are likely to be local, short term in nature and can be mitigated or prevented by good construction practice and the implementation of the Health, Safety, Environment and Social Management Plan (the “HSESAP”) The Project will report annually on the implementation of the HSESAP and environmental and social matters. Loan funded Client funded Grant financing had been used for project preparation activities