The European Investment Bank (EIB) is lending EUR 250 million to Russian company Enel OGK-5 to finance the upgrading of a gas fired power plant located in Nevinnomyssk, South Russia. This is the first EIB loan in support of the Russian power generation sector, and also the first EIB project in Southern Russia. Enel OGK-5 is majority-owned by Italian power utility Enel.

The project concerns the construction of a modern, efficient combined cycle gas turbine (CCGT) unit with a capacity of 410 MW to replace / put in cold reserve old power plant units, as well as the rehabilitation of existing generating capacity. This will lead to greater energy efficiency as well as a reduction in CO2 emissions per unit of electricity produced.

Through its loan to Enel’s Russian operations, EIB therefore supports European Foreign Direct Investment (FDI) in Russia, while at the same time contributing to European policies in the important areas of energy efficiency and climate change. By helping to enhance access to modern sources of energy in Russia, EIB’s loan promotes the operational safety of energy infrastructure and contributes to energy security and economic development. The project is co-financed by EBRD.

Background information:

The EIB can lend up to EUR 3.7 billion with a Community Guarantee to projects in Russia, Eastern European and Southern Caucasus countries within the period 2007 - 2013. There is no ex-ante allocation of the overall amount by country. Under this mandate, the EIB is prepared to consider support to sound projects in the areas of transport, energy, telecommunications and environmental infrastructure, as well as to certain structures for lending to SMEs.

In addition, EIB has recently set up the Eastern Partners Facility (EPF) in an amount of EUR 1.5 billion, of which up to EUR 500 million for Russia, that will complement the afore-mentioned mandate for the 2007-2013 period and will enable the Bank to support notably EU Foreign Direct Investments (FDI) in the region.

In Russia, the EIB has provided financing amounting in total to some EUR 470 million, supporting also projects focused on the improvement of water quality in the Baltic Sea and anti-flood measures in St. Petersburg, as well as in the telecom sector.