OREANDA-NEWS. December 20, 2007. The European Bank for Reconstruction and Development has acquired a blocking stake in a privately-owned and dynamic district heating company operating in the southern Russian city of Taganrog as part of a strategy to increase private participation in a sector which has traditionally been publicly owned and operated, reported the press-centre of EBRD.

In what is the Bank’s first investment in a dedicated heating network in Russia, the EBRD has paid 133 million roubles (equivalent of ?3,8 million) to subscribe for new shares representing 25 percent plus one share of JSC TEPLOENERGO’s capital.

The proceeds will be used to finance the rehabilitation and upgrade of the district heating infrastructure and to make its operations more energy efficient.

The company, established in 1977, became one of the first private operators in the market 20 years later. It occupies a unique position among private sector operators in that it owns the underlying assets. Teploenergo is profitable and financially sound even though it does not receive any state subsidies.

The proceeds from the investment will help the company modernize its facilities, provide better service to customers and improve overall efficiency due to reduced energy losses. Its achievements so far have demonstrated how the private sector can be instrumental in improving both efficiency and service levels in district heating supply.