Project description
and objectives:
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Proposed corporate loan to Eesti Energia to finance investment in transmission
and distribution, and rehabilitation at the existing Balti and Eesti power
stations that would utilise energy-efficient technology with a high degree of
pollution control and environmental remediation.
The EBRD would provide funds to finance investment at each of the Balti and
Eesti power stations (the Narva Power programme). The Narva Power investment
programme comprises three distinct elements: repowering projects, renovation
projects and environmental remediation. The programme has three main
objectives: (1) to reduce the total level of sulphur dioxide (SO2) emissions
to enable Estonia to meet its international environmental obligations with
regard to SO2; (2) to address other environmental issues at the power plants
such as particulate emission, ash pond rehabilitation, soil and ground water
contamination and water plant renovation; and (3) to improve the efficiency
and reliability of the power plants. The repowering investments will boost
fuel efficiency by 20 per cent by increasing the efficiency by about 6.5 per
cent.
The Project will also include investment in transmission and distribution to
increase efficiency, reduce losses and extend service to new customers.
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Transition
impact:
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The Project will be supported by an agreement with the Government and the
Company to (1) establish a grid code to support Estonia’s goal to create a
competitive electricity market; (2) further separate transmission, dispatch
and distribution into new legal entities to create more transparent
operations; and (3) to establish a tariff methodology for the sector.
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The client:
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Eesti Energia is the vertically integrated Estonian electricity utility and
100 per cent owner of Narva Power, a subsidiary company that owns the Balti
and Eesti power stations. Eesti Energia is owned 100 per cent by the Estonian
Government.
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EBRD
finance:
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The EBRD expects to provide €50-100 million as a 15-year parallel loan
alongside the Nordic Investment Bank, KfW and bond investors. Total debt
financing is expected to be approximately €350 million.
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Total project cost:
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€650 million through 2007.
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Environmental impact:
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Summary of Environmental Impacts
The environmental studies carried out to date have shown that Narva Power is
in compliance with current Estonian environmental laws and requirements. The
investment programme has been designed to continue the operation of Narva
Power Plants in compliance with increasingly stringent Estonian, EU and
International environmental requirements and will result in significant
reduction of their environmental impact.
The key conclusions of the environmental assessment of the project are:
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Narva Power's two power stations, Balti and Eesti, are Estonia’s major sources
of air pollutants and urgently require rehabilitation.
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The Narva Power investment programme, which has mainly environmental
objectives, will result in significant environmental benefits, enabling Narva
Power to meet increasingly stringent future environmental requirements.
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The project will reduce air emissions of SO2 by 44 per cent and of
particulates by 93 per cent. NOX and CO2 emissions will also be reduced.
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Narva Power's transboundary sulphur load to adjacent areas in Finland and
Russia is expected to reduce in the same proportion as the emissions.
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The project will result in additional environmental benefits through clean-up
of contaminated soil, rehabilitation of the waste management system,
reclamation of an ash disposal area, closure and encapsulation of industrial
landfills, removal and repair of the present asbestos insulation, occupational
health and safety programmes and introduction of ISO 14001 Environmental
Management System.
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Further environmental mitigation measures and improvements will be addressed
in an Environmental Action Plan to be implemented in addition to the
investment programme.
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Any potential adverse environmental impacts of the construction works are
assessed to be limited both in time and scale.
The complete Executive Summary of the Environmental Impacts of the Narva Power
Plants is available at EBRD's web site: www.ebrd.com
Eesti Energia is currently carrying out a comprehensive study of the
environmental impacts of the Narva Power investment programme on the request
of the Estonian Ministry of the Environment (MoE). The study includes
consultations with the public as required under Estonian law. Due to Narva
Power’s transboundary environmental issues, the Estonian MoE has also notified
the relevant Finnish and Russian authorities in accordance with the UNECE
Convention on Environmental Impact Assessment in a Transboundary Context as
well as the Estonian-Finnish intergovernmental agreement on assessment of
transboundary environmental impact. Further information on the study, public
consultation process and the environmental impacts of Narva Power Plants is
available at Eesti Energia's web site: www.energia.ee
There is an Environmental Impact Assesment available for this project.
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Technical
cooperation:
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None.
For consultant opportunities for projects financed by technical cooperation
funds, visit procurement
of consultants.
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EBRD contact:
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Richard Stanaro, Operation Leader: stanaror@ebrd.com
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Procurement or tendering
opportunities:
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Visit EBRD Procurement
Enquiries: Tel: +44 20 7338 6794; Fax: +44 20 7338 7472, Email: procurement@ebrd.com
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General
enquiries:
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EBRD project enquiries not related to procurement:
Tel: +44 20 7338 7168; Fax: +44 20 7338 7380
Email: projectenquiries@ebrd.com
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