TAURON ENERGY INFRASTRUCTURE

The project concerns an investment programme comprising the following components: 1) Electricity distribution, consisting of multiple schemes involving around 11 000 new connections, construction of new and upgrading of existing 110/20kV substations, associated equipment and associated overhead lines, and roll out of smart metering 2) the modernisation and refurbishment of around seven existing small hydro power stations ranging in size and age from 0.3 to 13MW and 50 to 100 years respectively; 3) the construction of a new gas fired CCGT cogeneration plant of 135MW electrical capacity and 90MW thermal capacity to feed the local district heating system. The project will be dispersed throughout southern Poland.

Regarding the individual project components - 1) Electricity distribution - the project will enable the promoter to cater for implementing new connections, improve safety, improve the reliability of electricity supply, and support the development of smart grids through the smart metering pilot roll out; 2) Hydro - the project will ensure the continued operation and extension of life of existing hydro power plants and the production of renewable electricity at a competitive cost; 3) CCGT cogeneration - the project will contribute to meeting heat and electricity demand and support security of supply by using natural gas as a fuel source. All components of the project are located in a convergence region. The project is therefore eligible under Article 309 point (a) projects for developing less-developed regions. The financing of this project will contribute to the Bank’s lending priority policy towards convergence, security and diversification of energy supply and renewable energy.

Considering the technical characteristics of the electrical distribution and hydro components, the schemes fall under Annex II of the Environmental Impact Assessment (EIA) Directive (2011/92/EU), and consequently it is the responsibility of the competent authority to determine the need for an EIA. For the Electrical distribution component, due to the nature of the schemes it is not envisaged that EIAs will be required. For the hydro component the promoter has confirmed that two schemes require EIAs, which have been completed. Regarding the CCGT CHP plant, this falls under Annex I of the EIA Directive. An EIA has been prepared and the environmental authorisation issued. The plant will be located on a brown field site within the boundaries of an existing facility. The environmental aspects of the project will be further assessed during appraisal. The Bank has had three previous operations with this promoter and its environmental capacity is deemed to be good.

The promoter is a public undertaking in the sense of Art. 2.1(b) of the Procurement Directive - 2004/17/EC. The procurement of works, goods and services is undertaken, by the Promoter, in accordance with the Polish Public Procurement Act 2010, and successive amendments, which transpose the requirements of the EU procurement legislation – Dir. 2004/17/EC, Dir. 2007/66/EC amending Directives 1989/665/EEC and 1992/12/EEC. Tender notices, as and where appropriate, are published in the EU Official Journal as well as in the Polish press. The procurement procedures will be further assessed during appraisal.