Kazakhstan: EBRD provides post-privatization support to power utility company

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ASTANA (TCA) — The European Bank for Reconstruction and Development (EBRD) is providing post-privatisation support to Mangistau Regional Distribution Company (MREK), a major power utility in western Kazakhstan, the Bank said on March 16.

A senior loan of up to KZT 12 billion (up to €31 million equivalent) will help MREK finance its investment programme until 2020. As part of the government’s strategic programme of privatising the state utility JSC Samruk-Energy, MREK was recently acquired by Kazakhstan Utility Systems (KKS), a privately-owned company that operates in electricity and heat generation, distribution and supply.

It is expected that the EBRD’s loan will be supported by a US$ 5.3 million loan from the Green Climate Fund (GCF). This portion will be spent on preparing the electricity grid to integrate renewable energy from future generating facilities, several of which are currently being planned in the region.

The EBRD loan will help finance MREK’s priority investments, up to 40 subprojects, which include modernisation of the existing substations and distribution lines, the construction of new power lines, and the installation of Supervisory Control And Data Acquisition systems (SCADA) and modern automatic control systems.

MREK’s network capacity, efficiency and reliability will be significantly improved and will allow for a smooth integration of renewables into the grid.

Aida Sitdikova, EBRD Director for Energy and Natural Resources for Russia, the Caucasus and Central Asia, signed the project in Almaty. She said: “We are pleased to start the Bank’s engagement with KKS and to continue our support of renewables and privatisation in the Kazakh energy sector.”

Nabi Aitzhanov, CEO of KKS and Chairman of the Board of Directors of MREK, added: “KKS is pleased to sign the first transaction with the EBRD and views this project as an important first step that unlocks huge potential for our cooperation in the future.”

Once implemented, the project will help MREK achieve greater efficiency and reduce energy losses, resulting in the reduction of CO2 emissions by 11,670 tonnes per year.

The loan will be the fourth sub-project under the Kazakhstan Renewables Framework established by the Bank in 2016. The EBRD is the largest financier of renewable energy in Kazakhstan.

Sergey Kwan

TCA