Sugd Transmission Grid Upgrade

Project Description

The provision of financing for rehabilitation of the two existing transformers at 500/220/35 kV substation in the Sugd region of Tajikistan (the project) in the form of an up to € 23 million sovereign loan to the Republic of Tajikistan with loan proceeds to be on-lent to OJSC Shabaqahoi Intiqoli Barq, the implementing entity.

Project Objectives

The implementation of the project shall contribute to strengthening of the power sector in Tajikistan by reducing losses, improving collection rates and revenue streams. The project objectives are to address most urgent needs for the replacement of aged infrastructure and to contribute towards the reduction of distribution network losses resulting in financial and CO2 emissions savings. The project shall strengthen reliability and stability of the transmission network and improve capacity of the electricity system, ultimately leading to the reduction of system losses.

Transition Impact

ETI score: 69

• Resillient (primary): The project will aim to develop a policy package looking to: i) improve the sector governance by introducing corporate governance standards in the transmission system operator (TSO) as a benchmark for other state-owned enterprises (SOEs)  that can allow efficient oversight over its functioning and create structures for operational autonomy, ii) provide support to the TSO to help the capital expenditure (CAPEX) calculation and maintenance part of operation and maintenance (O&M) for tariff estimation and plan for grid development including renewable energy sources (RES) integration and iii) consider capacity support to the regulator to cover point i) and ii).
• Inclusive (secondary): The project is expected to help address the key transition challenge of youth unemployment by developing new work-based learning opportunities addressing the Company’s business-critical skills needs for the modernisation of the electricity transmission infrastructure.  The new training programme developed will meet national accreditation standards and follow international best practices.

Client Information

SHABAQAHOI INTIQOLI BARQ OJSC

 

Borrower: Republic of Tajikistan

Project Entity: Open Joint Stock Company Shabaqahoi Intiqoli Barq was established in 2021 as a result of unbundling of the vertically integrated power company Barqi Tojik. The company is responsible for operation and maintenance of the entire transmission network in Tajikistan. The Company is 100 per cent owned by the Government. 

EBRD Finance Summary

EUR 23,000,000.00

Total Project Cost

EUR 29,300,000.00

Additionality

• Financing structure: the EBRD offers financing that is not available in the market from commercial sources on reasonable terms and conditions. Such financing is necessary to structure the project. The EBRD offers a tenor, which is above the market average and is necessary to structure the project.

• Standard-setting: Gender Smart tag: Client seeks/makes use of the EBRD expertise on higher gender standards and/or equal opportunities action plans (e.g. improving women’s access to skills and employment opportunities): Outreach to local institutes to offer career advice to youth through female and male role models (chosen among successful client’s employees) will be embedded in the programme together with a gender-focused campaign in the Sugd region to improve the perception and awareness of equal opportunities in the energy industry.

Environmental and Social Summary

Categorised B (2019 ESP) as the environmental and social impacts associated with the rehabilitation of the existing transformers and construction of a new transformer are site-specific and/or readily identified and addressed through effective mitigation measures. The Bank’s Environmental and Social Due Diligence (ESDD) is being carried out by an independent consultant and has included a site visit and review of the Client’s current operations and the proposed Project and documentation review.

The results of the on-going ESDD have confirmed that as a relatively new entity, which was formed from unbundling of the national power utility, the Company has very limited institutional capacity or environmental and social management systems in place. The main E&S risks are associated with labour and working conditions, occupational health and safety and hygiene including within the direct and contractor workforce, contractor management and pollution prevention issues such as a lack of procedures for managing hazardous substances, waste management or for the identification and management of any materials containing polychlorinated biphenyls. It is understood that the Project will not be associated with any physical resettlement or economic displacement or impacts on cultural heritage as it will be built within the boundary of the existing sub-station.

The ESAP is under development and will focus on actions required to address the risks and impacts identified, ensure the Project is structured to meet the EBRD’s Performance Requirements (PRs) and existing operations are aligned with the PRs. The PSD will be updated on the completion of ESDD.

Technical Cooperation and Grant Financing

The following technical co-operation (‘TC’) assignments are envisaged as part of this Project: 

• Project Due Diligence to include environmental and social due diligence and technical review; financed by the Japan-EBRD Cooperation Fund.
• IFRS support; proposed to be financed by the Sustainable Infrastructure Fund.
• Project Implementation Unit support to assist the project implementation unit with procurement of goods, works and services for the Project and to provide organizational and technical assistance; funding source to be confirmed.

Company Contact Information

SHABAQAHOI INTIQOLI BARQ OJSC
info@shib.tj
+992 37 235 8666
+992 37 235 8692
64 Ismoil Somoni Street, Dushanbe, Tajikistan 734026

PSD last updated

15 Aug 2023

Understanding Transition

Further information regarding the EBRD’s approach to measuring transition impact is available here.

Business opportunities

For business opportunities or procurement, contact the client company.

For business opportunities with EBRD (not related to procurement) contact:

Tel: +44 20 7338 7168

Email: projectenquiries@ebrd.com

For state-sector projects, visit EBRD Procurement:

Tel: +44 20 7338 6794

Email: procurement@ebrd.com

General enquiries

Specific enquiries can be made using the EBRD Enquiries form.

Environmental and Social Policy (ESP)

The ESP and the associated Performance Requirements (PRs) set out the ways in which the EBRD implements its commitment to promoting “environmentally sound and sustainable development”.  The ESP and the PRs include specific provisions for clients to comply with the applicable requirements of national laws on public information and consultation as well as to establish a grievance mechanism to receive and facilitate resolution of stakeholders’ concerns and grievances, in particular, about environmental and social performance of the client and the project. Proportionate to the nature and scale of a project’s environmental and social risks and impacts, the EBRD additionally requires its clients to disclose information, as appropriate, about the risks and impacts arising from projects or to undertake meaningful consultation with stakeholders and consider and respond to their feedback.

More information on the EBRD’s practices in this regard is set out in the ESP.

Integrity and Compliance

The EBRD’s Office of the Chief Compliance Officer (OCCO) promotes good governance and ensures that the highest standards of integrity are applied to all activities of the Bank in accordance with international best practice. Integrity due diligence is conducted on all Bank clients to ensure that projects do not present unacceptable integrity or reputational risks to the Bank. The Bank believes that identifying and resolving issues at the project assessment approval stages is the most effective means of ensuring the integrity of Bank transactions. OCCO plays a key role in these protective efforts, and also helps to monitor integrity risks in projects post-investment.

OCCO is also responsible for investigating allegations of fraud, corruption and misconduct in EBRD-financed projects. Anyone, both within or outside the Bank, who suspects fraud or corruption should submit a written report to the Chief Compliance Officer by email to compliance@ebrd.com. All matters reported will be handled by OCCO for follow-up. All reports, including anonymous ones, will be reviewed. Reports can be made in any language of the Bank or of the Bank’s countries of operation. The information provided must be made in good faith.

Access to Information Policy (AIP)

The AIP sets out how the EBRD discloses information and consults with its stakeholders so as to promote better awareness and understanding of its strategies, policies and operations following its entry into force on 1 January 2020. Please visit the Access to Information Policy page to find out what information is available from the EBRD website.

Specific requests for information can be made using the EBRD Enquiries form.

Independent Project Accountability Mechanism (IPAM)

If efforts to address environmental, social or public disclosure concerns with the Client or the Bank are unsuccessful (e.g. through the Client’s Project-level grievance mechanism or through direct engagement with Bank management), individuals and organisations may seek to address their concerns through the EBRD’s Independent Project Accountability Mechanism (IPAM).

IPAM independently reviews Project issues that are believed to have caused (or to be likely to cause) harm. The purpose of the Mechanism is: to support dialogue between Project stakeholders to resolve environmental, social and public disclosure issues; to determine whether the Bank has complied with its Environmental and Social Policy or Project-specific provisions of its Access to Information Policy; and where applicable, to address any existing non-compliance with these policies, while preventing future non-compliance by the Bank.

Please visit the Independent Project Accountability Mechanism webpage to find out more about IPAM and its mandate; how to submit a Request for review; or contact IPAM  via email ipam@ebrd.com to get guidance and more information on IPAM and how to submit a request.