Projects financed by the EDB
Construction Polotsk HPP on the Western Dvina
Improved energy efficiency is a key priority for Belarus
Eurasian Development Bank financed the construction at Polotsk HPP of a 111.2 m high concrete dam and a turbine room housing five generators.The construction of the power plant is promoting cooperation between Russia and Belarus.
Power shortages, energy security and volatile oil and gas prices are not only the concerns of politicians, experts and journalists. These are real economic issues that have a significant impact on the socioeconomic situation, primarily in countries which do not have abundant energy sources and are almost fully dependent on imports of hydrocarbon fuels. Problems relating to fuel are often the main barrier to sustainable development. There are few ways of mitigating their negative impact on economic growth besides energy-saving programmes and increasing the use of local energy resources, primarily renewables.
Belarus is one of the countries thus affected, therefore the country has launched several energy efficiency and energy saving programmes this century. One of the country’s flagship projects is the construction of a cascade of four hydroelectricity plants on the Western Dvina River (Polotsk, Vitebsk, Beshenkovichi, and Upper Dvina), with a total capacity of up to 130 MW. The project is being implemented by Vitebskenergo, Belarus’s largest state electricity producer, which generates up to 40% of the country’s total electricity output.
EDB lent its support to the project in November 2010, signing a loan agreement with Vitebskenergo to finance construction of the power plant. The Bank began loan disbursements to the project, which has a total cost of US $142.7 million, in February 2011. EDB’s financing totals US $99.8 million over ten years, the loan guaranteed by the Government of the Republic of Belarus.Polotsk HPP was the first to be built, with a capacity of 21.75 MW. The plant is expected to generate 112 million kWh a year.
Construction began in the autumn of 2011 near Luchno village in Polotsk District (Vitebsk Region).
As well as the construction of the hydroelectric unit, the project requires new infrastructure (access roads, a diversion channel, power transmission lines, bridges), earthworks for the construction of a reservoir (earth removal, deforestation and bank protection), repositioning of power lines, the demolition of houses and other buildings in the flood area, and the construction of new houses for those displaced by the construction. A reservoir with a capacity of almost 100 million cu m is to be built at Polotsk HPP in order to attain the required 7.7 m hydraulic head.
In agreeing to finance the construction of Polotsk HPP, EDB acknowledged the project’s potential to promote sustainable development in one of its member states. It will help reduce the energy intensity of Belarus’s GDP and improve its energy security by increasing the proportion of local renewable energy sources in its fuel and energy mix, which will also help to reduce the plant’s negative impact on the environment.
The project will also help reduce the prime cost of electricity generation and save 35,100 tonnes of fossil fuels per year. It will generate nearly US $45 million of tax revenues for the country’s exchequer over the loan period.
Russia’s Technopromexport, one of the world’s leading energy engineering companies, is the general contractor for the project. The company builds hydraulic, thermal, geothermal and diesel power plants, transmission lines and substations. It has worked on new facilities in fifty countries with a total commissioned capacity exceeding 86 million kW.
All the equipment for the plant (except turbines) will be acquired from Belarus and Russia boosting the development of related sectors and deepening integration in the region through additional mutual trade.