Zaporizhzhia Energy Efficiency Project

cancelled

Translated version of this PSD: Ukrainian The EBRD is considering providing a €12.5 million loan to finance the installation of new gas engine units for simultaneous co-generation of heat and electricity and the installation of individual heating stations at the building level in the district heating system of the city of Zaporizhzhia in Ukraine. The Project is designed to increase the overall efficiency of the district heating system in the city of Zaporizhzhia and focus on reduction of fuel consumption. The transaction will have significant demonstration effect for other cities and utilities in Ukraine concerning ways to improve energy efficiency of district heating operations and reduce fuel consumption. It will also increase the penetration of combined heat and power technologies for which there exists a substantial market potential in the country. Through physical investments and the Corporate Development Support Programme, the Project will improve financial and operational performance of the Company. The Corporate Development Support Programme and other donor funded assistance will provide substantial training for the key staff of the Company enabling substantial market skill transfer. The District Heating Company “Miski Teplovi Merezhi” (the “Company”), a municipal utility wholly owned by the City of Zaporizhzhia. €12.5 million loan to the Company, secured by a guarantee of the City. The project is expected to be co-financed by an up to €5 million grant from the Eastern Europe Energy Efficiency and Environment Partnership (E5P). Up to €18.5 million. The project was categorised B/1 in accordance with EBRD's 2003 Environmental Policy. The modernisation of an existing district heating system should bring about environmental benefits in terms of reduced water and heat loss. The environmental and social due diligence of the Project, consisting of the environmental audit as well as an environmental analysis of the Project was carried out by independent consultants within the Feasibility Study for the proposed Project. The due diligence is currently being finalised. There were no major issues identified and any adverse impacts are expected to be limited to short-term environmental, health and safety issues arising from construction works which can be adequately mitigated by taking environmental protection measures into consideration in construction planning and work practices. An Environmental and Social Action Plan (the “ESAP”), containing mitigation measures for identified issues, has been developed and is currently being reviewed by the Client. The Client will need to implement the ESAP and submit annual environmental and social reports to the Bank. Pre-signing Feasibility Study, which was done during 2011. The study covered analysis of alternative options, technical feasibility of the selected option, environmental impact assessment, economic and financial analysis. The assignment was financed by the Swedish International Development Cooperation Agency (Sida). Total cost was EUR 160,000; Post-signing