Non-technical resume Of investment projects on environment impact assessment of “SEVKAZENERGO” JSC “SEVKAZENERGO” JSC has long-term investment program, directed towards the modernization of power complex, the aim of which is the increase of park resource of equipment, increase of available and installed capacities of electric and heat power, and decrease of emissions of polluting substances into environment, as well as power saving. Implementation of the investment program on power sources is executed by the mean of annual signing of bilateral agreement on investment liabilities with the Ministry of industry and new technologies of the Republic of Kazakhstan in order set by the legislation. The Company undertakes the investment liabilities with the purpose of technological park modernization, within the frames of Regulation of the Government of the Republic of Kazakhstan “On approval of cap rates” # 392 dated 25.03.09”. I. The current practice of EIA of investment projects Policy of “SEVKAZENERGO” JSC is uniform in its quality, energy management, occupational health and safety, environmental protection. This policy identifies the principles, aims, objectives and main directions of the Company’s activity in the field of environment protection and providing of environmental safety. Basic liabilities of the management policy of “SEVKAZENERGO” JSC on the issues of decrease of negative impact of the enterprise to the environment are the following: execution of corresponding legislative and regulatory requirements related to the ecological aspects, improvement of technological power generation processes, as well as openness and availability of information for all interested parties. Within the process of technical projects development, implementation of which may directly affect the environment and health of the citizens, the Company mandatorily develops section “Environment Impact Assessment” (EIA). Within the frames of conducted EIAs of the project decisions in compliance with “Instruction for conducting EIA of the projected economic or other activity within development of preplanned, pre-project and project documentation” (Astana, the Ministry of Environmental Protection of the Republic of Kazakhstan, 2007), the Company conducts impact assessment on atmosphere air, surface and subterranean waters, soil and subsoil, plant and animal life, physical impact on environment as well as mandatorily on socio-economic sphere. After project development, with the purpose of compliance with the requirements of Art.57 of Environmental Code of the Republic of Kazakhstan in the field of compliance with the transparency principle of state environmental expertise and public access to decision making, the Company with the help of mass media informs about conducting public consultations. For obtaining open and true information on forthcoming works and impact, which the enterprise may occur to the environment, the consultations are conducted with participation of all interested 1 parties: representatives of local authorities (Akimat), authorized bodies in the field of environment protection, mass media, interested public, population. The results of actions are minuted, placed in mass media, and further the projects are submitted for state environmental expertise. In accordance with the approved Investment obligations of “SEVKAZENERGO” JSC on the implementation of activities aimed at the reconstruction and modernization of Petropavlovsk CHP2 for 2014 the following projects were developed: “Environmental impact assessment” (EIA) with the receipt of the conclusions of the state ecological expertise (SEE) to the following investment projects: Conclusion of the state environmental expertise #KZ10VCY00018043 dated 12.26.2014 for the project “Reconstruction of the Petropavlovsk CHP-2, including replacement of turbine number 1”; Conclusion of the state environmental expertise # KZ82VDC00029538 dated 11.19.2014 for the project “Reclamation of ash disposal area number 3 of PHPP-2 of “SEVKAZENERGO” JSC; Conclusion of the state environmental expertise # KZ80VDC00005615 dated 19.03.2014 for the project of maximum permissible emissions for loam career of “SEVKAZENERGO” JSC. II. Description of implemented and transitioning to the next period investment projects To increase the supply of electric and thermal energy from the energy source CHP-3 to meet the needs of existing and prospective customers, as well as improving the reliability of power supply, steam supply and heat supply the project “Reconstruction of the Petropavlovsk CHP-2, including replacement of turbine number 1” was developed with the introduction of modern automated process control system (PCS), the planned completion date of construction - 2015. Reconstruction of K-63-90 TA turbine unit number 1 in place of dismantled T-42-90 / 1.2 LMZ turbine allows to: Increase the heat load of the renovated and modernized turbine in order to increase technical and economic indicators of the turbine; Increase the production of electricity at the most economical heating cycle on the basis of heat supply from the heating selection of the turbine for external customers and for their own needs; Increase the installed electrical capacity of TPP-2 for increase power generation in order to supply it to the regional / wholesale electricity markets, to reduce the gross heat rate depending on the mode of operation of turbine, and, respectively, to reduce the specific consumption of equivalent fuel, which ultimately helps to reduce emissions of harmful substances in the atmosphere of the city. In order to prevent the ash dump surface dusting at worked-out section the technical restoration of ash dump №3 PHPP-2 of “SEVKAZENERGO” JSC is provided, which means creating protective layer by dint of sandy clay, planning grass, access ramp arrangement. Filled section is to be covered by protective quarry-sandy-clay layer of 0.5 m-thickness, laced with 10%-vegetable soil in upper 2 layer of 0.2 m, which complies with 1.04-14-2003 sanitary regulations and norms of the Republic of Kazakhstan “Toxic industrial wastes deactivation and burial areas”. Planned term reclamation of ash dump №3 is from 2015 to 2020. The project also includes a set of measures to reduce the impact of reclamation of ash dump TPP-3 on the environment: the use of the developed land, moisturizing territory and roads, shelter tents dump truck for transportation of loose and dusty materials. The works on the reconstruction of a generating boiler number 8 are completed. The purpose of reconstruction of boiler number 8 made by Barnaul Boiler Plant is not only to reduce the deficit of stem capacity by increasing it up to 270 t / h, but also the ability to provide reliable operation of the boiler equipment in a wide range of loads with increased environmental and economic performance of work. In line with the project, the existing furnace is replaced by a gas-tight furnace. Stiffness and strength of the walls of the furnace is provided by horizontal stiffness belts mounted on the perimeter. Boiler drum is left with full replacement of separation devices inside the drum. To ensure regulatory steam velocity at elevated boiler load the steam collector is increased in diameter and the main steam valve is provided with a larger nominal bore diameter of 250 mm, instead of the valve with a diameter of 225. It is provided to use existing channels of hydraulic ash for transfer of the pulp-slag from the boiler number 8 in the Ash-pump. The boiler is provided for staged combustion of fuel, thereby reducing the excess air ratio and reducing the amount of nitrogen oxide formation. In addition, when using a solid fuel boiler application of bottom air nozzles helps to prevent slagging and reduces the carbon failure. Implementation of the investment activities on the project “Reconstruction of the Petropavlovsk TPP-2 with the replacement of boiler unit number 8” is aimed at reducing emissions of NOx, increasing efficiency and reliability. Due to the reconstruction of furnace and boiler burners the atmospheric emission of nitrogen oxides will be reduced to value guaranteed by the manufacturer (450 mg / Nm3). Similar reconstruction was carried out in 2012 on a boiler at station number 7of PCHP of “SEVKAZENERGO” JSC. III. Environmental impact assessment Implementation of projects is of great socio-economic value determined by the scale and proportion of electricity and heat production in North-Kazakhstan region. Technical solutions adopted in the implementation of investment projects suggest the following conclusions on the impact of the natural and socio-economic environment: 1. Atmospheric air Every project includes measures to prevent (reduce) emissions into the atmosphere. 3 The main sources of impact on the environment during the construction and installation work on the reconstruction of turbine and boiler are: motors of trucks and construction machinery, construction machinery refueling by bowser, suction of soil, gravel, sand and gravel and sand, welding and gas cutting works, painting and waterproofing, asphalt paving, etc. Direct operation of the turbine units is not accompanied by the emission of pollutants into the atmosphere. The increase of emissions from fuel combustion at the implementation of this project is not provided, since the capacity of boilers, and time consumption of coal in the whole plant is not changed. Boiler steam output remains is unchanged. Under the current project “Environmental impact assessment” to PCHP-2 of “SEVKAZENERGO” JSC the maximum fuel consumption for the whole company is designed for nominal operation of boilers. Pollutant emissions for the whole plant after commissioning of turbine units will not exceed the standards established for the PCHP-2 of “SEVKAZENERGO” JSC. Calculations of dissemination for the period of the equipment reconstruction and operation proved that surface concentrations of all ingredients to not exceed 1 maximum permissible concentration on the company's sanitary protective zone boundary. 2. Water resources Ongoing projects include measures to prevent and reduce the impact on water resources. With the purpose of maintaining necessary hydrological regime of the cooling pond, the Company executes regular cleaning of the lake from sludge and bottom deposits. In compliance with the requirements of “Rules of operation of water facilities, located directly at water objects” dated 30.01.2012 # 171. In September 2013 the Company conducted commission periodical technical review of hydro technical water facilities: on-shore pumping station, discharge and influent channels of CHP-2, central pumping station, located directly at water objects of Ishim river and Beloye lake. The Company performed the systematic replacement of the obsolete water-oil coolers with the worked out economic life for the modern ones. Stations Number 6, 7, 3 are equipped with this equipment. This measures prevent the used turbine oil and petroleum products from entering into drain of Beloye lake cooling pond. The modal network of wells and observation over the stage of the groundwater are provided for groundwater monitoring. According to the project of reconstruction of turbine units the water for cooling will be supplied from the existing recycling system of technical water supply. Accounting for the consumption of fresh water for feeding water recycling system provided by the existing flow meters. Water consumption in the period of reconstruction and operation of the designed facility will not result in exceeding the permitted limit of water intake. There are no any water surface bodies in the vicinity of the location of the proposed facility, so a direct impact on them is eliminated. The probability of groundwater contamination is virtually absent, as underground water table is 4 deep enough. In order to prevent impact on groundwater during the implementation of all projects the measures are provided in order to prevent penetration into the soil and groundwater of mastics, solvents, fuels and lubricants used in the construction and operation of construction equipment and vehicles, to prevent the organization of irregular garbage and construction waste dumps. Under the terms of the construction the impact on groundwater pollution is not expected during project implementation. In order to protect the environment and reduce the impact of the ash dump of PCHP on the hydrosphere, to protect the surface and groundwater from pollution and to reduce the consumption of fresh water the revolving cycle of water supply system GMI is provided. 3. The Soil. Waste The project provides measures to prevent and reduce the impact on the soil. Projected turbine and boiler are placed within the existing land allotment enterprises, removal of topsoil is not provided, since the reconstruction sites are located in the existing main building of the enterprise. With the purpose of reducing negative impact of wastes on environment, the Company carefully organizes collection, storage, and disposal of wastes to the sites of its disposal. For prevention of pollution by production and consumption wastes, the Company provided the following actions: arrangement of the site with containers; collection of communal and production wastes is executed into different containers, and wastes are disposed regularly; repair of vehicles is executed only in a specialized territory, which prevents pollution of soil by the wastes and oil products. Wastes of all kinds, produced in the course of reconstruction, are transferred to respective enterprises under agreements for their allocation or treatment. The planned improvement works and landscaping businesses are fully implemented. 4. Subsoil No new lands are withdrawn for the projects' purposes, which excluded: building on areas of commercial mineral occurrence; violation of rare geological outcrops, mineral buildups and subsoil sites, proclaimed as reservation parks, natural, history, and culture monuments. 5. Flora and fauna Analysis of flora and fauna of the territories, which were in operation for a long period of time, demonstrates that due to the long-term man-made burden, the structures of plant and animal life simplify, which is firstly related to the factor of displacement. In this regard, the reconstruction of the boiler and turbine will not lead to a violation of the existing structures of tehnic landscape, flora and fauna. 5 There are no rare plants and plants from the Red Book in the area of reclamation of ash dump №3. 6. Physical impact on the environment Every project involves activities aimed at reducing the physical impact on the environment. Turbo facilities and accompanying equipment being installed cause the following physical impact: noise, vibrations, thermal and electromagnetic emissions. In order to reduce physical impact the projects provide the following activities are to be implemented: usage of modern facilities producing noise and vibrations which don’t exceed permissible allowance; construction of independent equipment understructures; covering of the turbines cylinders, high-temperature equipment and pipelines by special thermal acoustic evaporate insulation, allocating equipment in special rooms and enclosures (cages, mantles); using silencing heads, flexible connections (clutches), elastic gaskets, flexible supports and suspensions for the equipment being installed. Physical impact from the objects being reconstructed is eliminated through the above mentioned activities within the main building and site. Upon the engineered objects being put in operation the level of physical impact will not increase for the whole enterprise in general, as old-fashioned equipment will be replaced by turbo generators. 7. Socio-economic environment In every project the evaluation of environmental risks and risks to health of the local population, assessment of the impact on the socio-economic sphere are performed. Directly reconstruction of equipment of PCHP “SEVKAZENERGO” JSC does not have any impact on the socio-economic conditions of the local population and has no change in the characteristics of its work. Implementation of investment projects on the reconstruction of equipment of PCHP will improve the sanitary-epidemiological status of the station area by reducing the total emissions of inorganic dust in the atmosphere. At the same time, environmental information of the ‘SEVKAZENERGO” JSC was published 2 times in Kazakhstan print media: according to the request from the Center for Sustainable Production and Consumption in April 2014, information about “SEVKAZENERGO” JSC was officially published in print media through participation in the project "Preparation of ecological and energy ratings of companies in Kazakhstan» Based on the received by the “SEVKAZENERGO” JSC letter of invitation to the partnership of “KEGOC” JSC, the application for the Practice of the Company was prepared on the theme “Environment” for the publication of the first Kazakh industry business benefits on corporate social responsibility and sustainable development. This application is accepted for official publication in May 2014. 6