Infrastructure

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Widening gas distribution networks

Turkey: Widening gas distribution networks

Municipal and environmental infrastructure

The EBRD supported the liberalisation of Turkey’s gas distribution network and encouraged people to switch from less energy-efficient fuels by lending US$ 50 million (€36 million equivalent) to Energaz, one of the country’s leading gas distribution companies.

The loan also helped to leverage support from two commercial banks – Garantibank and DenizBank – and will support the growth of Energaz by financing its investment programme for 2013-14. This includes the expansion of its gas distribution network and extensive modernisation of its metering and IT systems.

Energaz operates in 10 regions in central and southern Anatolia. By expanding its network in these areas, the company will encourage people to switch from fuels such as oil and coal, which are more expensive and environmentally polluting than gas.

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Improving energy security

Poland: Enhancing energy security

Municipal and environmental infrastructure

The EBRD provided a 12-year loan of PLN 300 million (equivalent to €75 million) to Gaz-System SA, Poland’s gas transmission system operator, to create the first liquefied gas terminal in Poland and in the whole of the EBRD’s region of operations.

The terminal, due for completion in 2014, will be able to re-gasify enough liquefied gas to supply nearly one-third of the country’s consumption.

Other financing for the project came from the European Investment Bank, the EU and Gaz-System itself. Approximately two-thirds of the capacity has been secured on a long-term basis, while the remainder is being offered to interested users in accordance with third party access rules.

The Polish economy is one of the most energy intensive in central and eastern Europe with coal and lignite-fired power plants accounting for over 80 per cent of the primary fuel mix in the country. This project will not only improve Poland’s energy mix but also improve energy security across central and eastern Europe.

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Cutting energy waste in district heating

Russia: Cutting energy waste in district heating

Municipal and environmental infrastructure

People living in the main city on the Russian island of Sakhalin can look forward to more reliable heating and hot water services thanks to an EBRD-funded project which aims to modernise the area’s district heating system. The Bank is lending 450 million roubles (€10 million equivalent) to the utility company SKK to upgrade the outdated and inefficient heating infrastructure in Yuzhno-Sakhalinsk, a city of 193,000 people.

As well as improving the service provided to residents and keeping prices at affordable levels, the investment will cut the current high rate of heat and water losses by replacing the network’s old and worn-out pipes. SKK will also install heating meters in a bid to encourage residential customers to save energy. Major efficiencies in the consumption of gas, electricity, heat input and chemically-treated water are expected by 2016 as a result of the investment programme.

This project marks the first time in 20 years that Yuzhno-Sakhalinsk’s district heating system has benefited from major external investment.

A technical cooperation programme funded by donors will help SKK, which is majority-owned by the city of Yuzhno-Sakhalinsk, to upgrade its pipes and other infrastructure, improve its financial and environmental management and promote service-oriented customer relations.

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Diversifying funding for infrastructure

Turkey: Diversifying funding for infrastructure

Municipal and environmental infrastructure

The port of Mersin on Turkey’s southern coast is the largest in the country and a key gateway for Turkish trade with the Middle East. To help the facility manage increased exports and imports and keep pace with Turkey’s economic growth, in 2013 the EBRD participated in a bond issue by the port’s owners that will fund a refinancing plan and a capacity expansion programme.

The EBRD invested US$ 79.5 million (€58 million equivalent) in the US$ 450 million Eurobond launched by Mersin International Port, which was Turkey’s first infrastructure bond. As well as helping to refinance an existing loan facility, the EBRD funding will support an investment programme that will allow the port to accept larger vessels and cater for larger volumes of industrial and agricultural goods.

The successful placement of the bond on the Irish Stock Exchange, with its broad base of global investors, demonstrated new ways of financing infrastructure investments in Turkey. The listing should encourage other infrastructure companies to diversify their sources of funding.

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Winning sustainability awards

Turkey: Winning sustainability awards

Transport

TAV Group, Turkey’s leading airport operator, has been honoured with a sustainability award from the Turkish branch of the World Business Council for Sustainable Development. The award praises its “innovative sustainability practices” in building the new terminal for domestic flights at Adnan Menderes airport in Izmir, the country’s third-largest city.

TAV Group, which received a €145 million financing package from the EBRD last year for the €250 million project, is recycling and reusing 99 per cent of the old terminal building to construct the new one. The Bank has continued to work closely with TAV Group on its sustainability agenda during 2013, including monitoring the successful implementation of their waste minimisation and recycling plans.

In addition to the recycling of the construction waste, the new terminal will incorporate the latest energy-efficient technology in building design and smart water management: heat pumps; solar collectors; a combined heat, power and cooling (CHPC) plant; rainwater harvesting; and grey water re-use systems. As part of the EBRD’s support for the project, the Bank and TAV Group have also agreed to develop and implement a gender action plan to increase women’s participation in the project and supporting businesses and services.

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Developing intermodal logistics

Georgia: Developing intermodal logistics

Transport

An EBRD loan of €1 million to a joint venture between Austrian transport and logistics company Gebrüder Weiss and Tegeta Motors, a Georgian auto parts retailer, will contribute to the development of an intermodal logistics terminal in Georgia.

With the construction of this new terminal, the joint venture will transfer international expertise while addressing Georgia’s needs for quality warehousing infrastructure, modern supply chain management and cost-efficient and flexible transport services.

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Upgrading transport

Belarus: Upgrading transport

Transport

To support the development of the private sector in Belarus and contribute to the modernisation of the country’s rolling stock, the EBRD provided a €20 million loan to a joint venture between Stadler Rail of Switzerland and the Minsk Region Executive Committee.

The investment will help finance the construction of a new rolling stock production facility that uses advanced technologies on a greenfield site close to Minsk. It will also support the modernisation of the existing production facilities of Belkommunmash, a leading manufacturer of trolleybuses and trams in the Commonwealth of Independent States (CIS).

As well as helping to improve rail transport in Belarus, through this project the EBRD is backing the reorganisation and commercialisation of a state-owned entity into a majority privately-owned company.

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Investing in road safety

Serbia: Investing in road safety

Transport

A major project to improve the safety and quality of more than 1,000 kilometres of Serbia’s roads is benefiting from a €100 million EBRD investment. The sovereign loan will help finance work to upgrade stretches of the national and regional road network and the road safety audits used to guide these improvements.

As part of the project, Serbia’s national road agency will develop a comprehensive road safety strategy, including a training and certification programme on road safety audits. With technical assistance funded by the Central European Initiative, it will also become the first country in the EBRD region to implement the new ISO 39001 global standard for road traffic safety management.

The project will involve the private sector and make use of its international experience by providing corporate grants for road safety awareness campaigns. It will also support reform of the road sector by introducing performance-based maintenance contracts.

A further significant innovation under this project is the provision of technical cooperation funding to support the creation of training opportunities for up to 120 young people in the construction industry, via the contracting of works, in line with EBRD procurement policies and rules.

A US$ 100 million (€72 million equivalent) loan from the World Bank and a €100 million loan from the European Investment Bank (EIB) will co-finance the project, alongside a €185 million investment from the Serbian government.

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Streamlining public transport

Hungary: Streamlining public transport

Transport

The Hungarian capital is justifiably proud of its metro network, which dates back to 1896 and is the oldest in continental Europe. But public transport in Budapest still relies on separate paper tickets for each mode of transit, making commuting a sometimes complicated process and one that is out of step with the city’s growing population of professionals. That is why the EBRD has invested €54.5 million in an electronic ticketing system for Budapest which commuters can use across all modes of municipal public transport.

The loan to transport authority BKK will help develop a contactless travel card valid for use on the city’s metro, bus, tram and trolleybus networks. By making it quicker and easier for passengers to get through fare collection points and switch between different modes of transport, BKK hopes to make public transport more attractive and reverse the trend of rising car use in the city. This would boost Budapest’s transport revenues while also cutting the capital’s carbon emissions.

In Numbers

EBRD annual Bank investment by sector, 2013

Infrastructure ABI
  • Infrastructure 20%
  • Industry, commerce and agribusiness 31%
  • Financial institutions 28%
  • Energy 21%

Infrastructure: annual Bank investment by subsector

Infrastructure subsector
  • Transport 67%
  • Municipal and environmental infrastructure 33%

Key facts about our work in this sector

[table class=””] Municipal and Environmental Infrastructure [attr colspan=”1″] [/table] [table class=””][attr colspan=”1″] “In the municipal and environmental infrastructure sector, the Bank financed 36 projects, representing a total EBRD commitment of €556 million – a record figure for us in this sector.”


“The EBRD invested a total of €163 million in improving the quality and efficiency of drinking water, sewage and effluent treatment services for under-served populations.”


“Our work helped reduce water consumption in Talas (Kyrgyz Republic) by 3.1 million m3 per year.


“The Bank signed 14 projects in the water and wastewater sector in 2013.”
[/table]


[table class=””] Transport [attr colspan=”1″] [/table] [table class=””][attr colspan=”1″] “Non-sovereign projects accounted for almost 60 per cent of the number and volume of Bank projects in the aviation, maritime, rail, road and intermodal sectors.”


“The largest transaction in the transport sector was a landmark €200 million participation in a €1.2 billion infrastructure bond. It will optimise the long-term financing of recently-built sections of the R1 Motorway in the Slovak Republic and support the sustainability of public-private partnerships (PPPs).”
[/table]

About this report

The EBRD’s Annual Report 2013 provides a comprehensive overview of our activities and achievements in the countries where we invest.

The report demonstrates that, amid economic turbulence and the deterioration of economies, the EBRD remains a strong, resilient and trusted partner.

It describes the transition impact of the Bank’s investments, projects and policy work, highlights its innovation in key sectors and geographical initiatives, and shows how the EBRD continues to promote sustainable growth and recovery.

Who we are

The EBRD is investing in changing people’s lives and environments across a region that stretches from central Europe to Central Asia, the Western Balkans and the southern and eastern Mediterranean.

Working together with the private sector, we invest in projects, engage in policy dialogue and provide technical advice that fosters innovation and builds sustainable and open-market economies.

What we do

We provide funds for well-structured, financially robust projects of all sizes (including many small businesses), both directly and through financial intermediaries such as local banks and investment funds. The Bank works mainly with private sector clients, but also finances municipal entities and publicly owned companies.

Our principal financing instruments are loans, equity investments and guarantees. We maintain close policy dialogue with governments, authorities, international financial institutions, and representatives of civil society, and provide targeted technical assistance using funds donated by member governments and institutions.

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