fbpx 51315-001: Samruk-Energy Green Transformation | Asian Development Bank

Kazakhstan: Samruk-Energy Green Transformation

Sovereign (Public) Project | 51315-001 Status: Closed

Samruk-Energy is the largest electricity generation company in Kazakhstan with approximately 7,000 megawatts (MW) of installed capacity. Samruk-Energy is one of the seven SOEs owned by Samruk Kazyna and planned for IPOs. In preparation for the IPO, Samruk-Energy is implementing a comprehensive corporate transformation program, which includes sales of nine of its assets, improvements to corporate governance, an introduction of enterprise resource planning system, etc. Following the government's development goals, in 2015 Samruk-Energy adopted the Long-term Development Strategy 2015 2025. Among other things, by 2025 Samruk-Energy plans to increase the power generation capacity from renewable sources up to 10% of total installed capacity (850 MW), which presently is less than 1%. In this context, Samruk-Energy has requested ADB to provide a technical assistance to support its corporate transformation and balance sheet restructuring planning.

Project Details

Project Officer
Yuki Inoue Central and West Asia Department Request for information
Country
  • Kazakhstan
Sector
  • Energy
 
Project Name Samruk-Energy Green Transformation
Project Number 51315-001
Country Kazakhstan
Project Status Closed
Project Type / Modality of Assistance Technical Assistance
Source of Funding / Amount
TA 9367-KAZ: Samruk-Energy Green Transformation
Technical Assistance Special Fund US$ 225,000.00
Strategic Agendas Inclusive economic growth
Drivers of Change Private sector development
Sector / Subsector

Energy / Energy sector development and institutional reform

Gender Equity and Mainstreaming No gender elements
Description

Samruk-Energy is the largest electricity generation company in Kazakhstan with approximately 7,000 megawatts (MW) of installed capacity. Samruk-Energy is one of the seven SOEs owned by Samruk Kazyna and planned for IPOs. In preparation for the IPO, Samruk-Energy is implementing a comprehensive corporate transformation program, which includes sales of nine of its assets, improvements to corporate governance, an introduction of enterprise resource planning system, etc. Following the government's development goals, in 2015 Samruk-Energy adopted the Long-term Development Strategy 2015 2025. Among other things, by 2025 Samruk-Energy plans to increase the power generation capacity from renewable sources up to 10% of total installed capacity (850 MW), which presently is less than 1%. In this context, Samruk-Energy has requested ADB to provide a technical assistance to support its corporate transformation and balance sheet restructuring planning. In addition to the corporate transformation to improve operation efficiency, Samruk-Energy faces liquidity requirements of EUR500 million by mid December 2017. The European Bank for Reconstruction and Development (EBRD) signed a loan agreement with Samruk-Energy in May 2017 for a EUR100 million loan to support its restructuring. While Samruk-Energy indicates that it would be able to raise the remaining amount from other financing sources, these will largely be from local banks, which will have limited tenors and continue to create challenges in managing Samruk-Energy's cash flow.

The TA will have three major outputs: (i) a report on Samruk-Energy's corporate transformation program, including the assessment of the activities and their impact on the energy sector and the whole economy of Kazakhstan and recommendations; (ii) detailed historical and pro-forma financial analysis of Samruk-Energy with a financial model to support the analysis and planning of balance sheet restructuring; and (iii) an environmental and social safeguard audit of Samruk-Energy's current environmental and social management system (ESMS) with recommendations to fill any gaps to meet international standards. There will be a small workshop with Samruk-Energy's relevant staff to share the findings by the consultants.

Project Rationale and Linkage to Country/Regional Strategy Kazakhstan, as a major oil exporter, has been facing economic challenges caused by the steep decline in the world oil prices and tenge depreciation after shifting to a floating regime in 2015. In its efforts to manage this economic downturn, the Government of Kazakhstan issued a decree in December 2015 to implement a new privatization program to improve the efficiency of state assets and to reduce budget expenditures. As part of the privatization plan, Samruk Kazyna, the sovereign wealth fund of Kazakhstan, plans to conduct initial public offerings (IPOs) of at least seven state-owned enterprises (SOEs) that it owns by 2020. These are also among the largest SOEs in the country.
Impact

Electricity supply from renewable energy sources in Kazakhstan increased to 3% by 2020.

Transfer of state-owned assets to a competitive environment by 2020.

Project Outcome
Description of Outcome Samruk-Energy's transformation program as preparation for initial public offering started
Progress Toward Outcome Analyses on the status of corporate transformation program and safeguard system have been conducted, and dialogue and improvements to lead to preparation for potential IPO are ongoing although with some delays.
Implementation Progress
Description of Project Outputs

Corporate transformation program ready for implementation

Balance sheet flexibility improved

Improvements to safeguard management system identified.

Status of Implementation Progress (Outputs, Activities, and Issues)

Initial inputs to corporate transformation program and balance sheet flexibility have been provided to the executing agency through another support from ADB.

Safeguard consultant has been engaged and the task has been completed.

The project completion date has been extended by 12 months to 30 September 2019 to allow completion of the remaining tasks.

Geographical Location Nation-wide
Summary of Environmental and Social Aspects
Environmental Aspects
Involuntary Resettlement
Indigenous Peoples
Stakeholder Communication, Participation, and Consultation
During Project Design
During Project Implementation
Business Opportunities
Consulting Services The Safeguard consultant has been engaged and the task has been completed.
Procurement Not applicable.
Responsible ADB Officer Yuki Inoue
Responsible ADB Department Central and West Asia Department
Responsible ADB Division Energy Division, CWRD
Executing Agencies
"Samruk Energy" Joint-Stock Company
Sergey Li, Head of Corporate Finance Department
[email protected]
Block B, Business Center "Q", Kabanbay Batyr Ave, 15A 010000, Astana, Republic of Kazakhstan
Asian Development Bank
6 ADB Avenue,
Mandaluyong City 1550, Philippines
Timetable
Concept Clearance -
Fact Finding 08 Sep 2017 to 08 Sep 2017
MRM -
Approval 08 Sep 2017
Last Review Mission -
Last PDS Update 28 Sep 2018

TA 9367-KAZ

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
08 Sep 2017 - 08 Sep 2017 30 Sep 2018 30 Sep 2019 -
Financing Plan/TA Utilization Cumulative Disbursements
ADB Cofinancing Counterpart Total Date Amount
Gov Beneficiaries Project Sponsor Others
225,000.00 0.00 0.00 0.00 0.00 0.00 225,000.00 08 Sep 2017 222,630.34

Project Data Sheets (PDS) contain summary information on the project or program. Because the PDS is a work in progress, some information may not be included in its initial version but will be added as it becomes available. Information about proposed projects is tentative and indicative.

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Safeguard Documents See also: Safeguards

Safeguard documents provided at the time of project/facility approval may also be found in the list of linked documents provided with the Report and Recommendation of the President.

None currently available.

Evaluation Documents See also: Independent Evaluation

None currently available.

Related Publications

None currently available.


The Access to Information Policy (AIP) establishes the disclosure requirements for documents and information ADB produces or requires to be produced in its operations to facilitate stakeholder participation in ADB's decision-making. For more information, refer to the Safeguard Policy Statement, Operations Manual F1, and Operations Manual L3.

Requests for information may also be directed to the InfoUnit.

Tenders

Tender Title Type Status Posting Date Deadline
Samruk-Energy Green Transformation Individual - Consulting Closed 16 Apr 2019 24 Apr 2019

Contracts Awarded

No contracts awarded for this project were found

Procurement Plan

None currently available.