Mosenergo

completed

Summary Of Project Information (SPI)Project NameRussian Federation - AO MosenergoRegionEuropeSectorProject No007673Projected Board DateFebruary 3, 1998Company NameAO MosenergoTechnical Partner and/or Major Shareholders RAO UES (49%)is the majority shareholder of AO Mosenergo. UES is a publicly traded joint stock company which owns and operates the Central Dispatch Unit for the Russian Federation power grid and all inter-regional powerlines. Other shareholders include: foreigners (29.6%), company employees (9.9%) and Russian investors (11.5%).Project Cost Including Proposed IFC Investment Total Project Cost up to US$185.5 million. IFC’s proposed investment is a US$32 million A Loan for IFC’s Account.Location of Project and Description of Site The IFC financing will be in part for corporate expenditures to improve Mosenergo’s generation, transmission and distribution of electricity and heat to Moscow and the Moscow region. Part of the financing will go toward completion of the Zagorsk pumped storage hydro power station which is located about 150 km east of Moscow, in the Sergiev Posad District of the Moscow Region, on the left bank of the Kunya River, a tributary of the Dubna River.Description of Company and Purpose of Project(include IFC’s Role and Development Impact) AO Mosenergo is the largest company among the 72 vertically integrated utilities that generate, transmit and distribute heat and electricity in the Russian Federation. Mosenergo services nearly 4 million customers, supporting a population, and its associated industry, of nearly 16 million in the City of Moscow and the surrounding Moscow region, an area of approximately 47,000 sq. km. The proposed project is to provide general corporate financing which in part will support the completion of a strategic asset (the Zagorsk pumped storage hydro power station) of Mosenergo. IFC’s role in providing this financing is twofold. This is the first international long-term debt financing to a Russian utility and can be expected to have a demonstration effect, not only for Mosenergo but also for other Russian utilities and large companies. In addition, IFC has introduced a number of corporate governance measures to assist the company in improving areas such as billing and collection systems and other management and accounting information, environmental planning and monitoring, financial reporting, and insurance. Environmental Category and Issues This is an environmental review category B project. Environmental issues associated with the project include environmental impact of completing the partially operating Zagorsk pumped storage hydro power plant, and environmental audit of the overall corporate operation and programs to move existing facilities towards compliance with appropriate World Bank environmental policies and guideline, and Russian requirements. An independent environmental consulting firm prepared an environmental audit and analysis. For its Zagorsk pumped storage hydro power station, Mosenergo has proposed a range of mitigation activities in collaboration with regulatory authorities. These include slope stabilization measures, construction of a municipal wastewater treatment plant, prohibition of new industrial, agricultural and construction activities inside the water protection zone around the upper and lower reservoirs, and environmental monitoring schemes for terrestrial and aquatic monitoring and geotechnical monitoring. All these mitigation and management activities will be included in a formal Environmental Action Plan (EAP). Mosenergo has developed a Strategic Environmental Program to the year 2010 that identified pollution control measures to improve the company’s environmental performance. This program was approved by the Moscow City government. By implementing the Program, the company plans to achieve full regulatory compliance by 2010 by reducing air pollutant emissions, waste water discharges, and noise levels at older power stations. The is from the Public Information Center.Date SPI sent to InfoShop      December 31, 1997“This Summary of Project Information is prepared and distributed to the public in advance of consideration of the proposed transaction by the Corporation’s Board of Directors. It is provided for the purpose of enhancing the transparency of IFC’s activities and should not be construed as presuming the outcome of IFC Board consideration.”For Additional Information contact: Corporate Relations Unit -telephone: (202) 473-7711facsimile: (202) 974-4384Environmental documents for this project are available at http://www.ifc.org and from the World Bank InfoShop (http://www.worldbank.org/html/pic/aboutinfo.html).