China Development Bank provides $400 million loan for 630 MW Third Unit of the Ekibastuz GRES-2 Power Plant Project (Linked to Record ID#66481)

Project narrative

On October 22, 2013, China Development Bank (CDB) and Russia's Vnesheconombank (VEB) signed a $400 million loan agreement to finance the construction of the Third Unit of the Ekibastuz GRES-2 Power Station (Экибастузская ГРЭС-2) in Kazakhstan. The loan has a maturity of 10 years; its other borrowing terms are unknown. The loan is often referred to, in conjunction with a $800 million CDB loan to VEB for a multifunctional complex in Moscow that issued at the same time (as captured via Record ID#66481), as a '$1.2 billion USD loan'. VEB used the proceeds of the CDB $400 million USD loan to on-lend to the "Ekibastuz GRES-2" Joint Stock Company (JSC) for the construction of the third unit of Ekibastuz GRES-2 coal power plant in Ekibastuz. Ekibastuz GRES-2 was a coal-power thermal power plant with an installed capacity of 1 GW, located in the city of Ekibastuz in the north of Kazakhstan. The VEB consortium with the Eurasian Bank of Kazakhstan was to provide a $700 million syndicated loan for the project. The project had a total cost of $700 million. VEB's finances were drained because of its financing of Olympic facilities in Sochi, making it look to CDB to partially finance the project. "Ekibastuz GRES-2" Joint Stock Company (JSC), an energy company located in Kazakhstan, managed the plant. Until December 2019, Russian energy company Inter RAO UES owned 50% and Samruk-Energy (JSC) owned 50% of Ekibastuz GRES-2. In December 2019, Samruk-Kazyna JSC purchased the 50% Inter RAO's shares for $25 million, transferring the plant entirely to Kazakhstan through the management of Samruk-Energy (JSC). Ekibastuz GRES-2 was a coal-power thermal power plant with an installed capacity of 1 GW, located in the city of Ekibastuz in the north of Kazakhstan. The two existing power units at GRES-2 currently produce about 12% of all electricity produced in Kazakhstan in 2010. The CDB-financed project involved the construction, development and operation of a third unit, which, once completed, would seek to increase the power station’s installed capacity by 50%. The capacity of the third unit was expected to be 630 MW. Construction began on October 21, 2014. The project was planned to be completed in 2017. Construction was apparently delayed in 2016, but it subsequently resumed. The reconstruction of the Ekibastuz GRES-2 was originally expected to be completed in 2020. In its 2021 annual report, Samruk Energy stated that the approval of the project by Gosekspertiza (State Technical Supervision Authority) was expected by the end of 2021. An environmental impact assessment (EIA) was published in 2021, and it appeared that public consultation took place in June 2021. However, in March 2023, it was reported that public consultations would be carried out in March 2023. As of December 2022, there were no updates on the approval or progress of the project during 2022. In March 2023, it was announced that China Machinery Engineering Corporation (CMEC) together with Samruk-Kazyna are working on a project to build two units (Unit 3 and the additional Unit 4). As of April 2023, it appeared that construction of Unit 3 had not yet begun. As of January 2024, comissioning the third unit was pushed to 2027.