Kyivenergo To Increase Loan From World Bank By USD 45 mln

Yesterday the Kyiv City Council voted to allow Kyivenergo (KIEN: HOLD) to take additional USD 45 mln loan from the World Bank (WB) for its heating network rehabilitation project. The loan has to be re-paid in 17 years with a five-year grace period. Alexander Paraschiy: Kyivenergo planned to spend USD 200 mln World Bank loan for the purchase of equipment for heating network reconstruction in 1999. In 2004, the company asked the WB decrease loan to USD 160 mln, then in 2006 the company decided to ask it to increase the limit to finish the project. As Kyivenergo signed a long-term agreement for a heating network lease with Kyiv city, now the WB is ready to increase a loan for the company to successfully finish reconstruction. At the moment, we do not see large economic effect from the upgrade of heating infrastructure, as the tariffs for heat supply are heavily regulated.