Project Description

A revolving facility to finance VAT payments during construction of a 200MWac solar photovoltaic power plant (the "Project") located in towns of Talin and Dashtadem of the Aragatsotn Region in the west of Armenia. The Borrower is a limited liability company incorporated in Armenia and 85% owned by Abu Dhabi Future Energy Company PJSC - Masdar (the "Sponsor").

Project Objectives

The Project will contribute to the strategic priority of the Government of Armenia to increase the share of renewable projects in the national energy mix and decrease its reliance on the fossil-fueled generation. It will contribute to the mitigation of climate impact by adding 200 MWac of solar generation capacity to the national energy system corresponding to expected reduction of CO2 emissions by up to 169,000 tonnes per annum.

Transition Impact

ETI score: 69The transition impact stems from (i) the potential contribution of the Project to the EBRD Green Economy Transition ("GET") approach as it will allow producing electricity using solar power, which will reduce the country's current high reliance on thermal power generation, and (ii) the fact that the Project will be the second utility scale private power generator in Armenia, where only small scale private capacity of intermittent generation is operating.

Client Information

TO BE DEFINED

EBRD Finance Summary

USD 6,000,000.00

Total Project Cost

USD 186,600,000.00

Additionality

Financing structure: The Bank is highly additional in providing long-term financing on terms and conditions not available in the local market. Innovative financing structures and/or instruments: The Bank will provide a set of tailored financing facilities under the project finance structure, innovative for the Armenian power sector. Risk mitigation: The Sponsor is a longstanding client of the Bank, and seeks EBRD's involvement in the Project in light of EBRD's experience and track record with similar projects in other COOs and the Bank's involvement in Armenia.

Environmental and Social Summary

The Project has been Categorised B in accordance with EBRD's Environmental and Social Policy (ESP) 2019. Environmental and Social Due Diligence (ESDD) by the Lender's independent E&S Consultant (LESC) is on-going include a site visit and review of the Masdar's environmental and social documentation including draft ESIA and Non-Technical Summary (NTS), Stakeholder Engagement Plan (SEP); Livelihood Restoration Plan (LRP) and Cultural Heritage Management Plan (CHMP) is on-going.Preliminary results of the ESDD indicate are summarised below and the PSD will be updated on completion of the due diligence.The area of land required for the solar photo-voltaic (PV) site is 525ha which is located in modified habitat on low quality agricultural land in Talin community. The short (c. 300m) new overhead line will connect to an existing sub-station line passing through adjacent to the site. The Project is not located on a major bottle-neck or geographical feature that would concentrate migrating bird species and does not contain features which would attract migrating or over-wintering birds. No species which would trigger critical habitat have been identified to date and a small number of species have been identified as Priority Biodiversity Features (PBFs).The Project site is located between the settlements of Dashtadem, Talin, Ashnak and Katnaghbyur and prior to a land transfer process was formerly communal land of Dashtadem and Talin communities. Agricultural use of the site by local communities is limited to seasonal grazing.A large number of cultural heritage features have been identified within the Project, none of which are of national significance or legally protected monuments. As part of the impact assessment process the Sponsor has undertaken a revision of the Project layout and design, to avoid the most sensitive features and additional mitigation measures have been incorporated into a CHMP.Enhanced supply chain due diligence is on-going for the solar components in accordance with the Bank's Management Approach for Solar Supply Chain Risk Management.

General enquiries

Specific enquiries can be made using the EBRD Enquiries form.