COUNTRY | Kazakhstan
REGION | Asia
SECTOR | energy
QII Principles | Principle 1 Sustainable Growth & Development, Principle 2 Economic Efficiency, Principle 3 Environmental Considerations, Principle 4 Building Resilience, Principle 5 Social Considerations, Principle 6 Infrastructure Governance
QII Sub-Principles | 1: SDGs, 1: Paris Agreement, 1: Wider economic benefits, 2: Operation and maintenance, 2: Technological innovation, 2: Risk management, 3: Environmental Impact Assessment, 3: Environmental Impact Mitigation, 3: Emissions, 4: Resilience, 4: Disaster risk management, 5: Capacity and institutional building, 5: Occupational health and safety, 6: Growth & development strategies, 6: Financial & debt sustainability, 6: Access to information and data, 6: Transparency of infrastructure investment, 6: Enabling Environment, 6: Policy
Overview
Two senior loans totaling up to EUR 243.5 million in local currency equivalent with a 6-year tenor (the “Loans”) to the state-owned companies Intergas Central Asia JSC (KZT 53.9BN and EUR 100MM in Kazakh tenge equivalent) (“ICA”) and Kaz TransGas Aimak JSC (KZT 12.9BN) (“KTGA”), the Bank’s existing clients and fully owned subsidiaries of KazTransGas JSC (the “Sponsor”, “KTG”), the national gas operator of Kazakhstan.
The Loans will consist of restructuring of the existing loans to ICA and KTGA in total amount of KZT 66.8BN (EUR 143.5MM) and a new working capital tranche of up to EUR 100MM equivalent
Timeline
The project is effective from execution via restructuring of the existing loans and availability of the working capital tranche.
The Program will be developed and implemented over 2020-2026.
Relevance to QII
Throughout the implementation period the Borrowers will be annually reporting on progress on identified milestones of the Methane Reduction Program and Corporate Governance Action Plan
Benefits
The liquidity support to KazTransGas and its subsidiaries will enable the companies to withstand the Covid-19 downturn and implement the Fugitive Methane Emissions and Carbon Intensity Program reducing GHG emissions by 1.5 million tCO2e annually.
Realised benefits:
- Liquidity support at a time of Covid-19 downturn to the strategic infrastructure companies securing stable gas supply to consumers in Kazakhstan and abroad;
- This engagement will not only support reduction in methane emissions but will also enable the shift in Kazakhstan from dominant and polluting coal to transitional gas, resulting in cleaner air in major Kazakh cities and further scale-up of intermittent renewables balancing the system.
Expected benefits: the loan allowed the Borrowers to commit to development and implementation of the Fugitive Methane Emissions and Carbon Intensity Program (the Program) aiming to invest KZT 100bn (USD 250 million) over 2020-2026. It is expected that implementation of the Program would help to reduce GHG emissions by 1.5 million tons of CO2 equivalent annually.
Name of Institution
European Bank for Reconstruction and Development
Website URL