The European Bank of Reconstruction and Development (EBRD) has financed a power plant in the far east of Russia.

The bank has made a loan of €100mn to Energy System of East (ESV) to build a gas-fired plant in the Pacific port of Vladivostok. The loan has a tenor of 12 years, linked to mosprime rate, and is guaranteed by ESV’s parent company, RusHydro.

Furthermore, Aida Sitdikova, portfolio manager at the EBRD, tells GTR that the European Investment Bank (EIB) will potentially match its €100mn contribution.

It is the first power plant to be built in the far eastern region of Primorsk for 30 years and is designed to cut the area’s CO2 emissions by 700,000 tonnes a year.

Sitdikova says that the bank was unable to find private sector backing as “commercial banks don’t find such long-term loans attractive and traditionally seek a shorter payback”.

She adds: “This is the first new power plant in many years due to the prolonged period of economic downturn the region experienced following the collapse of the Soviet Union. The loan will help finance the construction of the new plant, which will improve the reliability of electricity and heat supply and facilitate an improvement in Vladivostok’s environmental situation by supplementing the coal-fired generation.”