The European Investment Bank (EIB) is lending EUR 100 million (RUB 4bn) to support the modernisation of power and heat generation technology in Vladivostok.
The project is part of a larger programme to bring natural gas to Russia’s Far East, enabling a switch from coal to natural gas as the primary energy source and reducing CO2 emissions.
The loan – the first ever to be extended by the EIB in Russian roubles – will finance the installation of three new state-of-the-art combined heat and power gas turbine units, which will increase electricity and heat production and bring environmental and energy efficiency performance into line with best practice.
“This loan will contribute to climate change mitigation, which is a key priority for the European Union and therefore also one of the key operational priorities of the EIB,” said Wilhelm Molterer, EIB Vice-President responsible for lending operations in Russia, adding that the project also contributes to the implementation of the EU – Russia Partnership for Modernisation.
The operation is being carried out under the EIB’s Climate Change Mandate for non-EU countries introduced in 2011 and is being co-financed with the European Bank for Reconstruction and Development.
Each of the three new units will consist of a 46.5 MW high-efficiency gas turbine and an associated 40 Gcal/h heat-recovery hot water generator. This will help to cover the heat base-load throughout the year in Vladivostok and supply electricity to the region. The project also includes the installation of three heat-only boilers (100 Gcal/h each) to cover winter/peak loads and replace the old heat-only boilers currently being used.
Konstantin Bessmertniy, Member of the Management Board of JSC RusHydro, the project promoter, said: “RusHydro is now unveiling a large-scale construction project in Russia’s Far East. Construction of the new generating facilities will enhance the region’s energy security and provide consumers with a reliable power supply. Support for our projects from major financial institutions such as the European Investment Bank is obviously an advantage and will help to make the implementation of RusHydro’s investment plans a success.”
General Director of JSC “Energy Systems of East” Sergei Tolstoguzov, stated: “Today the south of Primorye region faces lack of energy. Construction of the new station will allow the city to get two independent power facilities. Vostochnaya CHP input will increase Vladivostok heat power capacity and create the necessary provision for electricity and heat. According to our experts, the station will supply electricity to more than 50,000 apartments and provide heat to more than 600 multi-family homes.”
The European Investment Bank is the European Union’s long-term lending institution and is owned by the EU Member States. It extends long-term finance to viable projects in order to contribute towards EU policy goals.
The EIB finances projects in the Russian Federation under its lending mandate for the Eastern Neighbourhood Countries (Armenia, Azerbaijan, Georgia, Moldova, Russia and Ukraine), which amounts to EUR 3.8bn for the period 2007-2013 and is contributing to the development of the local private sector, the improvement of social and economic infrastructure, and climate change mitigation and adaptation.
RusHydro Group is one of Russia’s largest generating companies. It is the leading producer of renewable energy in Russia, with over 70 generating facilities in Russia and abroad. It also manages a number of R&D, engineering and retail electricity companies. The Group’s thermal assets are operated by a subsidiary (RAO Energy System) in Russia’s Far East. Its total electricity generating capacity is 36.5 GW and its heating capacity is 16 200 GCal/h.
The Russian Federation owns 67.1% of RusHydro, the remainder being held by other institutional and individual shareholders (over 360 000). The company’s shares are traded on the MICEX and RTS stock exchanges and are included in MSCI’s EM and Russia indexes. The company’s GDRs are traded on LSE’s IOB and its ADRs on OTCQX International.