AES B.V. is the largest shareholder with 89.1% shareholding in KOE and 79.5% shareholding in ROE. The remaining shares are held by employees and financial investors who acquired shares either through a voucher privatization or on the stock exchange. AES is a power holding company that operates a globally diversified portfolio of electricity generation and distribution businesses. AES’s affiliates operate over 100 individual power assets in 26 countries that span the US, Central and South America, Europe, Asia and Africa. AES is publicly traded on the New York Stock Exchange.

The total project cost is estimated at approximately $80 million. The proposed IFC investment will be in an aggregate amount of up to $45 million in the form of IFC A Loans to KOE and ROE, and a Partial Credit Guarantee in the aggregate of up to $5million.

33.0 million (USD)

Product Line	IFC Investment (million USD)
Risk Management
Guarantee	3.0
Loan	30.0
Equity

* These investment figures are indicative

KOE is based in the city of Kyiv and operates a distribution network that covers the entire Kyiv oblast (excluding the city of Kyiv). ROE is based in the city of Rivne and operates a distribution network that covers the entire Rivne oblast.

This is a Category B project according to IFC’s Procedure for Environmental and Social Review of Projects because a limited number of specific environmental and social impacts may result which can be avoided or mitigated by adhering to generally recognized performance standards, guidelines or design criteria. The review of the project consisted of appraising technical and environmental/social information submitted by the Companies and a site visit by IFC environmental and technical staff. The following potential environment, health and safety and social impacts of the project were analyzed:

- Effectiveness of environment, health and safety program;
- Environmental liabilities from past and current operations;
- Effectiveness of safety tracking and reporting systems;
- Right-of-way management; and
- Risks related to the Chernobyl energy complex.
Location of environmental documents in locally affected community
Environmental documentation will be made available at following locations: KOE CJSC AES Kyivoblenergo 1a Stetsenka Street Kive, 04136 Ukraine ROE: CJSC AES Riveneenergo 71 Knyazya Volodymyra Street Rivne, 33000 Ukraine

IFC involvement will support the sustainability of the on-going reform and privatization process in Ukraine’s electricity sector by supporting capital investments in two of the best performing companies in the sector. The project’s development impacts are expected to include: - a reduction in outages caused by network faults (due to rehabilitation of assets); - a reduction in energy losses to a sustainable level; - improvement in customer services through modernization of billing and collection systems, and through more efficient handling of consumer complaints; and - a demonstration of the economic gains of privatization which may encourage further privatization programs in the region. Additionally, IFC's investment in the project will provide the necessary long term financing which is currently unavailable in Ukraine. Also, since a portion of the financing may be structured as a Hrivnya denominated loan, IFC’s financing would also facilitate access to longer term local currency financing for a utility that has local currency revenues. In addition, IFC's involvement would introduce the Companies to IFC’s environmental and social policies and help integrate these into their day-to-day operations.