Lomonosov District Heating Project

cancelled

The EBRD is considering financing of construction, rehabilitation, upgrade of boilers and distribution network (pipes) in the Lomonosov municipal district (the “Municipality”) within the Leningrad region. The priority investments to be financed by EBRD will be defined by consultants in a feasibility study. Transition impact is expected to be achieved through: “LR TEK” LLC (the Operating Company), providing water, wastewater and district heating services to both residential and industrial customers in the Lomonosov municipal district within the Leningrad region and wholly owned by the Municipality; “LEK” Jsc (the Company), holding water, wastewater and district heating assets operated and leased by the Operating Company and wholly owned by the Municipality; Senior loan of up to RUB 400 million (equivalent to ca EUR 10 million) to the Operating Company, backed by a financial guarantee from the Company and the Municipality. The loan is proposed to be co-financed by a capital grant from the Northern Dimension Environmental Partnership (“NDEP”). Up to RUB 600 million. Screened B (2008) requiring an environmental and social analysis of the proposed investment and an environmental, health and safety audit of the existing operations and facilities of the Company. Initial screening identified that the following Performance Requirements are applicable to the Project: PR 1 – Environmental & Social Appraisal & Management The boundaries of the project include existing district heating plants and distribution network owned by the Company as well as goods and services supplied in relation to the proposed project. PR 2 – Labour & Working Conditions Key issues might include the availability of adequate working conditions and health and safety hazards control measures for operational personnel. Potential presence of asbestos in the insulation material might pose an occupational health risk during decommissioning of old boilers and pipes. An asbestos survey would need to be conducted and appropriate procedures for asbestos, if found to be present, removal and handling developed and adhered to by contractors. The due diligence will also identify that the Company has and adequate grievance procedure. PR 3 – Pollution Prevention & Abatement Construction phase might be associated with the disposal of construction waste, increased noise and dust levels. Current activities of the Company might be associated with the handling and disposal of waste, wastewater treatment and discharge and general housekeeping. PR 4 – Community Health, Safety & Security Replacement of pipes might entail some safety risks related to availability of proper fencing; temporary passage plates over the trenches; and lighting of temporary construction sites at night. Another issue could be a potential damage to water pipes and other underground facilities during removal of old pipes. The due diligence shall identify if the Company has in place a procedure for an advance notification of planned activities as well as sign-posting of temporary construction sites. PR 10 – Information Disclosure & Stakeholder Engagement Stakeholders of the Project include direct consumers of district heating supplied by the Company; any communities that might be affected by replacement of pipes; NGOs and regulators. An external communication programme of the Company will need to ensure that there is an ongoing communication to members of public on environmental, social, health and safety issues that might affect them. An environmental and social due diligence of the Project will need to be completed and An Environmental and Social Action Plan developed and agreed with the Client prior to the Final Review of the Project. Grant funds will be sought for: