The European Bank for Reconstruction and Development has prepared a project together with the Joint Stock Company Kyzylorda Regional Electricity Company and the Akimat of Kyzylorda Oblast to modernise electricity distribution networks in the City of Kyzylorda and the Oblast of Kyzylorda in the Republic of Kazakhstan.
The Company has been suffering from poor operating and financial performance in the past decade, resulting in substantial underinvestment and the deterioration of quality of supply. High losses and chronic underinvestment present significant challenge for economic and social life of the region. The Project will enable the Company to address the above outlined issues and improve its electricity distribution services by financing priority investments for the rehabilitation and modernization of the metering system and strengthening of the network.
The Project will result in increased energy efficiency, a reduction in losses, and improvements in reliability of power supply. The expected technical and commercial losses reduction will have a significant impact on the related carbon emissions as the power generation sector of Kazakhstan is of high carbon intensity.
The scope of the project includes renovation of the MV and LV distribution network of two regions, with about 10,000 customers each, are included. The project scope will include the renovation of part of 35/10 kV substations, 10 kV networks, installation of new MV/LV transformer stations and renovation of MV and LV networks with aerial bundled conductors (ABC).
AF Mercados EMI (Spain) and BDC Consulting KZ responsibilities under PMU Support scope is divided into phases:
- Project Preparation Phase: Development of PIU operating procedures; Support during the procurement process; Support during the evaluation process; Support during contract finalization
- Project Implementation Phase: Assistance in site supervision, monitoring and reporting; Testing, commissioning and operational acceptance; Environmental and social action plan; Knowledge transfer to client;
- Project Completion.
In parallel to the physical investment, the EBRD is supporting the institutional strengthening of the Company through a Technical Assistance project to improve the KREC’s commercial standing, service and environmental and social performance. In May 2016, Corporate Solutions Consultancy Ltd. (UK) and BDC Consulting KZ were appointed to help KREC identify and implement necessary corporate, financial and operational improvements required to meet the covenants included in the EBRD’s Loan Agreement (LA).
The improvements will be achieved via the following institutional development actions:
- Development and implementation of a Financial and Operational Performance Improvement Programme (“FOPIP”);
- Development and adoption of a medium-term Corporate Development Plan for the Company and improving its corporate planning capacity to assist on-going transition towards a self-sustaining entity and commercial operations, as well as implementing the Environmental and Social Action Plan developed for the Company;
- Development and introduction of a Management Information System (MIS);
- Develop a methodology, standards and monitoring systems for annual publication of energy use and key energy efficiency indicators on the Company website.