Modernization of heat supply Kyzylorda city - Procurement and Implementation Support

The European Bank for Reconstruction and Development (EBRD) has provided a loan to Kyzylordateploelektrotsentr, the municipal district heating company in Kyzylorda, to support the implementation of a priority investment programme (PIP) to rehabilitate and modernise the district heating infrastructure in the city.

The condition of most of the electricity and heat generation facilities, as well as the centralised network, has deteriorated significantly. Over the past decade, the Company has begun modernising its combined heat and power plant by replacing oil with heavy gas oil and natural gas. As a result, the first natural gas turbine was commissioned in 2005.

The Company covers around 50% of the city’s electricity needs and almost 90% of its heat needs. The remaining electricity needs are currently met by more expensive sources from neighbouring industrialised regions, while hot water is produced mainly by individual water heating boilers installed by residents.

In parallel with the investment in equipment, the Project contributed to the development and organizational strengthening of the Enterprise in the areas of procurement, commercialization, creditworthiness and improvement of the environmental situation in the city of Kyzylorda.

The Enterprise and the Akimat (and the future management company, which will operate under the terms of the Public Service Agreement) must improve the commercial reputation, service level, environmental and social performance of the Enterprise. The main objective is to identify and implement corporate, financial and operational improvements necessary to meet the relevant contractual obligations stipulated in the EBRD financial documentation.

Consulting companies CECT RU and BDC Consulting provided services to support the implementation of the project, including assistance with the procurement of goods and services.

The project included measures to modernize and optimize the district heating infrastructure through the reconstruction of networks, the replacement of a number of gas turbines and the installation of individual boiler houses (“IB”) equipped with heat meters providing automated control and regulation of heat supply. This will result in increased energy efficiency, reduced hot water consumption and heat losses in the system, and improved environmental compliance.

The project has improved the quality of its district heating services by implementing priority investments to rehabilitate and modernize the infrastructure, increase energy efficiency, significantly reduce heat and hot water losses, and improve environmental standards, including reducing CO2 emissions. This process will stimulate the commercialization of the Company's activities, supporting sector reforms and, overall, having a significant demonstration impact in the country.