Ayg-1 Solar Power Plant

Overview
Project Summary Document
Environmental and Social Documentation
Procurement
Complaints

Overview

A secured limited recourse project finance facility to the Client (the "Borrower") in the amount of up to USD 45mm (the "Senior Loan") coupled with a concessional loan to the Borrower of up to USD 6.5mm by Clean Technology Fund (the "CTF Loan") to finance the development, design, construction and operation 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 (together the "Loans"). The Borrower is a limited liability company incorporated in Armenia and 85% owned by Abu Dhabi Future Energy Company PJSC - Masdar (the "Sponsor").

Project ID 53283

Status Approved

Location

Armenia

Business Sector

Energy

Notice Type

Private

Project timeline

Exploratory
Passed Concept Review
Passed Structure Review
Passed Final Review
Board Approved
Signed
Implementing
Completed

Company Contact Information

Vipul Goyal
vgoyal@masdar.ae
https://masdar.ae/
PO Box 54115, Abu Dhabi, UAE

Project ID 53283

Status Approved

Location

Armenia

Business Sector

Energy

Notice Type

Private

Environmental Category

Approval Date

24 Jan 2024

Disclosure date

17 Oct 2023

Ayg-1 Solar Power Plant (Armenian) (PDF, 0.74MB)

Project description

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:69

nsition 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.

EBRD Finance Summary

USD 45,000,000.00

Total project cost

USD 181,700,000.00

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 & Social Summary

The Project has been Categorised B in accordance with EBRD's Environmental and Social Policy (ESP) 2019 as the majority of impacts are site-specific and readily addressed through mitigation measures. Environmental and Social Due Diligence (ESDD) by the Lender's independent E&S Consultant (LESC) included a site visit, and review of the Masdar's environmental and social documentation including ESIA and Non-Technical Summary (NTS), Stakeholder Engagement Plan (SEP); Livelihood Restoration Plan (LRP) and Cultural Heritage Management Plan (CHMP) which have been disclosed by the Sponsor on the Project website https://masdar.ae/en/renewables/our-projects/ayg-1-solar-photovoltaic-plant.

The ESDD indicated that risks and impacts can be mitigated by the measures outlined in the E&S documentation and through the implementation of Project specific Environmental and Social Action Plans (ESAP) which have been agreed with the Sponsor. The Borrower is 85% owned by the Sponsor who has the capacity to implement the Project in accordance with the Performance Requirements (PRs). As required by the ESAP the Project Company will include appropriate E&S resources and will finalise and implement the Environmental and Social Management System during construction and operations.

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 municipality. The short (c. 300m) new overhead line will connect to an existing sub-station adjacent to the site. 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) for which mitigation measures have been developed as required to meet PR6.

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. No physical resettlement is associated with the Projects and potential economic displacement has been reduced with the avoidance agricultural land and areas used by local communities being limited to seasonal grazing. The land acquisition for the Project site was undertaken by the Government of Armenia under Article 65 of the Land Code through agreements with the communities and transferred to Armenian National Interests Fund (ANIF), which retains an interest in the Project Company. The Project is expected to cause negligible to minor economic displacement by restricting access to grazing areas. In addition to a direct donation to the Talin and Dashtadem communities from the Project and the Government which were part of the land transfer process, the Project will implement livelihood restoration measures in the four affected communities mostly focused on herders, but also benefiting the wider communities. The LRP will be finalised in consultation with the affected parties.

A large number (171) of cultural heritage features have been identified within the Project boundary, none of which are of national significance or legally protected monuments. As part of the ESIA process the Sponsor has amended the Project layout and design, to avoid all of the most sensitive features (67) and additional mitigation measures have been incorporated into a CHMP. Mitigation measures include pre-construction evaluation, site protection, construction monitoring and/or full systematic recording of features that will be impacted prior to construction. Consultation on the proposed avoidance and mitigation measures has been undertaken with the Ministry of Culture and other stakeholders. The CHMP has also been disclosed for public comment prior to finalisation. Fulltime monitoring of cultural heritage will be undertaken for all ground disturbance activities and the chance find procedure implemented. No significant visual or landscape impacts are predicted on the fortress or monastery which are located over 1km from the Project. Other construction impacts, including traffic, occupational and community health and safety and labour and working conditions will be managed by measures included in management plans as part of the ESMS.

Enhanced supply chain due diligence has been completed for the solar components in accordance with the Bank's Management Approach for Solar Supply Chain Risk Management. The Sponsor has provided evidence of a functioning supply chain management system and the supply chain for this particular project, to polysilicon, has been mapped and will be verified by an independent consultant for point of origin. The Financing Agreement and ESAP requires the Sponsor and Borrower to maintain due diligence and management procedures for the sourcing of solar modules in accordance with Good International Practice. At the current stage of the project, there are a number of potential suppliers of solar modules, all of which have provided supply chain maps to the polysilicon level and all of which have been subject to enhanced due diligence.

The Projects will be monitored regularly by independent Environmental and Social consultants to ensure compliance with the ESAP and the Performance Requirements.

Company Contact Information

Vipul Goyal
vgoyal@masdar.ae
https://masdar.ae/
PO Box 54115, Abu Dhabi, UAE

Implementation summary

PSD last updated

26 Dec 2023

Understanding transition

Further information regarding the EBRD’s approach to measuring transition impact is available here.

Business opportunities

For business opportunities or procurement, contact the client company.

For business opportunities with the EBRD (not related to procurement) contact:

Tel: +44 20 7338 7168
Email: projectenquiries@ebrd.com

For state-sector projects, visit EBRD Procurement:

Tel: +44 20 7338 6794
Email: procurement@ebrd.com

General enquiries

Specific enquiries can be made using the EBRD Enquiries form.

Environmental and Social Policy (ESP)

The ESP and its associated Environmental and Social Requirements (ESRs) set out the ways in which the EBRD implements its commitment to promoting “environmentally sound and sustainable development”. The ESP and the ESRs include specific provisions for clients to comply with the applicable requirements of national laws on public information and consultation, and to establish a grievance mechanism to receive and facilitate resolution of stakeholders’ concerns and grievances, in particular, about the environmental and social (E&S) performance of the client and the project. Proportionate to the nature and scale of a project’s environmental and social risks and impacts, the EBRD also requires its clients to disclose information, as appropriate, about the risks and impacts of projects or to undertake meaningful consultation with stakeholders and consider and respond to their feedback.

More information on the EBRD’s practices in this regard is set out in the ESP.

Integrity and compliance

The EBRD's Office of the Chief Compliance Officer (OCCO) promotes good governance and ensures that the highest standards of integrity are applied to all of the Bank's activities in accordance with international best practice. Integrity due diligence is conducted on all Bank clients to ensure that projects do not present unacceptable integrity or reputational risks to the Bank. The EBRD believes that identifying and resolving issues in the project assessment and approval stages is the most effective means of ensuring the integrity of Bank transactions. OCCO plays a key role in these protective efforts andhelps to monitor integrity risks in projects post-investment.

OCCO is further responsible for investigating allegations of fraud, corruption and misconduct in EBRD-financed projects. Anyone, either within or outside the Bank, who suspects fraud or corruption should submit a written report to the Chief Compliance Officer by email to compliance@ebrd.com. OCCO will follow-up all matters reported. It will review all matters reported. Reports can be made in any language of the Bank or of the Bank's countries of operation. The information provided must be made in good faith.

Access to Information Policy (AIP)

The AIP, which entered into force on 1 January 2025, sets out how the EBRD discloses information and consults with its stakeholders to promote better awareness and understanding of its strategies, policies and operations. Please visit the Access to Information Policy page to find out what information is available from the EBRD website.

Specific requests for information can be made using the EBRD enquiries form.

Independent Project Accountability Mechanism (IPAM)

If efforts to address environmental, social or public disclosure concerns with the Client or the Bank are unsuccessful (for example, through the client’s project-level grievance mechanism or through direct engagement with Bank management), individuals and organisations may seek to address their concerns through the EBRD’s Independent Project Accountability Mechanism (IPAM).

IPAM independently reviews project issues that are believed to have caused (or to be likely to cause) harm. The purpose of the mechanism is: to support dialogue between project stakeholders to resolve environmental, social and public disclosure issues; to determine whether the Bank has complied with its Environmental and Social Policy or the project-specific provisions of its Access to Information Policy; and where applicable, to address any existing non-compliance with these policies, while preventing future non-compliance by the Bank.

Please visit the Independent Project Accountability Mechanism webpage to find out more about IPAM and its mandate and how to submit a Request for review. Alternatively, contact IPAM by email at ipam@ebrd.com for guidance and more information on IPAM and how to submit a request.

Environmental and Social Documentation is not available for this project.

Selected procurement notices related to this project may be shown below. Further procurement opportunities related to this and other projects, if available, maybe be viewed in the EBRD Procurement Portal.

The EBRD's Environmental and Social Policy (ESP), Access to Information policy (AIP) and Project Accountability Policy (PAP) enable sound and sustainable development in its projects. The Independent Project Accountability Mechanism (IPAM) deals with complaints about environmental, social and disclosure matters related to the Bank’s investments.

No complaints about this project have been made so far.

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Ayg-1 Solar Power Plant

Overview

Project timeline

Company Contact Information

Project description

Project objectives

Transition impact

EBRD Finance Summary

Total project cost

Additionality

Environmental & Social Summary

Company Contact Information

Implementation summary

PSD last updated

Understanding transition

Business opportunities

General enquiries

Environmental and Social Policy (ESP)

Integrity and compliance

Access to Information Policy (AIP)

Independent Project Accountability Mechanism (IPAM)