Provision of senior debt financing to finance the construction and operation of a 50 MW solar PV plant under the first round of large scale solar IPP in Tunisia.
The Project will further promote private sector participation in the Tunisian power sector and increase the share of renewable energy in the energy mix in line with the nationally declared targets.
The Project will add 50 MW of green generation capacity to the Tunisian power system - currently dominated by gas-fired power plants (94.7% of installed capacity) to support the country's low-carbon transition by reducing its reliance on thermal power generation.
ETI score: 80
The Project will contribute to the "Green" transition quality by adding 50 MW of new renewable capacity to the Tunisian electricity generation sector currently dominated by thermal power plants, thus contributing to a reduction in CO2 emissions.
The Project will also support the "Competitive" quality by funding a renewable project developed by a private developer in the power generation sector, which remains majority-owned by state-owned STEG.
SCATEC TOZEUR PV POWER
"Scatec Tozeur PV Power" is a Limited Liability Company to be incorporated in Tunisia for the sole purpose of constructing and operating a solar photovoltaic (PV) power plant in the area of Tozeur, Tunisia, with an installed capacity of 50 MW. The Project Company will be ultimately owned by Scatec ASA.
EBRD Finance Summary
The 50 MW solar PV project would benefit from senior debt financing of up to EUR 35 million including 1) an EBRD loan of up to EUR 15 million, 2) a SPREF loan of up to USD 5.7 million (equivalent to EUR 4.7 million), to be provided by the Clean Technology Fund and the Global Environmental Facility, secured under the SEMED Private Renewable Energy Framework and administered by the EBRD, and 3) a parallel loan of up to EUR 15 million from Proparco.
Total Project Cost
Financing Structure: EBRD offers financing that is not available in the market from commercial sources on reasonable terms and conditions, e.g. a longer grace period than the market average. Such financing is necessary to structure the Project. The terms and conditions offered by EBRD are not available from commercial banks, and only offered by IFIs. This is due to the fact that large scale RE IPPs are new to the country hence the market is still not tested.
Policy, sector, institutional, or regulatory change: EBRD's involvement in a project is considered additional when it is designed to trigger a change in the policy, sector, institutional or regulatory framework, or enhance practices at the sector or country level (e.g., an introduction of cost-reflective pricing of energy, water etc.).
Over the past 5 years, the EBRD has been a key partner to the Tunisian Government in developing the country's solar programme, providing constant, direct support to ensure the bankability of the contractual framework.
Environmental and Social Summary
Category B (2019 ESP). The environmental and social due diligence (ESDD) was carried out by an independent consultant; it included the review of an information package supplied by the client, visit of the Tozeur site, and a review of the E&S Scoping Studies conducted previously for the PV site and the transmission line. The environmental and social (E&S) risks and impacts associated with construction and operation of a solar 50 MW PV plant and associated transmission line (1.4 km for Tozeur) are site specific, readily identified and will be managed by the implementation of an Environmental and Social Action Plan (ESAP). The main points of the ESAP have been agreed in principle with Scatec, and the ESAP will be finalised prior to signing. The Bank's enhanced DD on specific suppliers for solar panels will have to be completed before signing. The approach in relation to informal users on site also needs to be agreed in writing before signing.
The PV project will be designed, built and operated by a company that is majority-owned by Scatec ASA. The transmission line will be designed and built under STEG's control, and operated by STEG. The ESAP requires Scatec to i) assign an E&S manager in Tunisia before the start of the construction, ii) include E&S clauses in the construction contracts, iii) develop an E&S management system aligned with ISO14001 standards for the operation phase. The Project does not require an environmental permit under the Tunisian legislation.
Up to 300 construction personnel will be employed during the peak period of the construction works on the site. The recruitment of local workforce will be implemented through a transparent mechanism agreed with the local population representatives and the employment bureau, as confirmed in the ESAP. The Scatec Global HR policy, aligned with PR2, will apply to the Tunisian Company (an SPV yet to be established). Worker grievance mechanisms will be developed by Scatec and STEG during the construction phase. Before starting any construction activities, Scatec will prepare specific Health, Safety and Environment Management Plans (HSEMP). Scatec has experience building and operating such PV plants in compliance with international standards and ISO 14001 / ISO 45001 standards.
There is no domestic water network at the PV site; the main source of water will be from cisterns/tankers brought to sites. The ESAP recommends waterless solution for solar panel cleaning. Scatec will require PV panels' suppliers to meet the key objectives of the EU Directive on Waste Electrical and Electronic Equipment (WEEE) in terms of the collection, treatment, recovery and environmentally sound disposal. The CO2 emissions avoided are estimated to be approx. 60,000 tCO2 eq for the Project.
The Project does not encroach on protected or internationally recognized areas, and the Project is not affecting critical habitats (the main type of habitat is sandy-clayish desert). Reptiles (snakes, lizards, geckos...), out of whom many species are classified as "rare and endangered" under the Tunisian legislation, are present on the site. The adopted mitigation measures (confirmed in the ESAP) include the collection and relocation of reptiles from the PV site. Fences around the PV site will also be designed so that they allow reptiles passage. Tozeur project will, together with the existing adjacent STEG PV plant, cause a cumulative reduction of pathways; this will be addressed by using mesh wire fence at Scatec PV site that allows ecological continuity for reptiles.
The Project site is not located next or close to a cultural or historic site that might be visually impacted. Potential for chance finds is not excluded and the contractor will therefore prepare, adopt and implement a Chance Find Procedure.
The PV site as well as the transmission lines will occupy a limited area of a vast state domain land, away from any urban area. The Project does not require any physical resettlement. The land required for the Project will be leased from the State. There are informal uses of land in the Projects area: essentially crops, palm or olive trees, and occasional grazing. On Tozeur PV site, several palm trees have been planted recently by a family (over less than 2% of the PV site). The Bank advised Scatec and the Ministry to declare the cut-off date as soon as possible to prevent new people from moving into the area, and to compensate the informal users (present before the cut-off date) as per PR5 requirements. Written commitment from Scatec and the Ministry confirming their acceptance of a PR5-aligned approach and defining an agreed cut-off date in the near future (for the Project) is necessary before Project signing (CP to signing).
The solar panel supply chain is associated with forced labour risks. A comprehensive Supply Chain questionnaire was used by the Bank to understand how Scatec are approaching the matter. According to their Procurement Framework disclosed on their website and to be signed by the Suppliers, Scatec expect "all vendors to act in accordance and demonstrate compliance with their Supplier Code of Conduct", which includes the requirement to conduct business consistently with the UN Guiding Principles on Business and Human Rights, including the elimination of all forms of forced and compulsory labour and effective abolition of child labour. Scatec will require all module suppliers considered for Project Procurement to be audited and to have a fully transparent traceability map completed prior to any procurement. An Integrity Due Diligence (IDD) screening of the suppliers and third-parties engaged on the Project is completed by Scatec. Scatec is currently working with an independent consultant to assess five of its top PV module suppliers regarding traceability throughout the module value chain. For the Project, the solar panel suppliers are not selected yet. The draft ESAP requires Scatec to develop due diligence and management procedures for the sourcing of solar modules in accordance with the EU Guidance on Due Diligence for EU Businesses to Address the Risk of Forced Labour in Their Operations and Supply Chains (2021), including i) Mapping and risk assessment of solar module and solar component suppliers, ii) Inclusion of appropriate clauses in procurement notices and contracts, iii) Labour audits of first tier solar supplier(s), iv) Requirements for traceability protocols from solar suppliers down to wafer/ingot producers. The Bank will include specific provisions in the Loan Agreement. The Bank's enhanced DD on specific suppliers will have to be completed before signing (CP to signing).
Scatec is committed to develop Community Development Initiatives in the Project area, based on a needs assessment. A Stakeholder Engagement Plan (SEP) has been developed during ESDD; it will be disclosed by Scatec. The Bank will monitor closely the implementation of the ESAP, through review of annual Environmental and Social Reports (AESR) as well as communications with the Company and site visits, as necessary.
Technical Cooperation and Grant Financing
- Project Preparation Support (TCRS Assignment ID 13398/108883): The Bank has secured EUR 400,000 (EUR 100,000 from SEMED Multi-Donor Fund ("MDF") and EUR 300,000 from SSF) to partially cover part of the costs associated with the lenders' due diligence costs for Tozeur and Sidi Bouzid solar projects. Grant Review approval 08/04/20 & 17/08/21.
Client Contribution: The client will make a parallel contribution to the Project Preparation Support by financing any due diligence costs that are not covered by TC funds. As agreed with the client the TC funds will cover for an amount up to the lower of (i) 80% of total costs of the lenders' due diligence and (ii) EUR 400,000.
- Environmental and Social Scoping study on the seven sites tendered under the first round of the Concession Regime (5 solar and 2 wind) / TCRS Assignment ID 1272 / Grant approval 07 October 2015 i EUR 74k, funding requested from SEMED MDA.
- Environmental and Social Scoping study on the transmission lines for the solar projects tendered under the first round of the Concession Regime / TCRS Assignment ID 100501 / Grant approval 25/01/2021i EUR 50k, funding requested from SEMED Cooperation Funds Account.
- Land acquisition framework: TCRS Assignment ID 102315 / Grant approval 02/03/2021i EUR 50k, funding requested from SEMED Cooperation Funds Account.
Reimbursement: The above TCs will be non-reimbursable TCs required to support STEG and the Tunisian authorities to implement these strategic renewable energy projects.
In addition to the above donor funded EUR 20,000 from Infrastructure Project Preparation Facility ("IPPF") to hire international and local counsels to support the Bank in negotiating with the Ministry of Energy bankable Project Documents (Concession Agreement, PPA, Direct Agreements and Land Lease Agreement).
Company Contact Information
Askekroken 11, 0277 Oslo, Norway
PSD last updated
24 Mar 2022
Further information regarding the EBRD’s approach to measuring transition impact is available here.
For business opportunities or procurement, contact the client company.
For business opportunities with EBRD (not related to procurement) contact:
Tel: +44 20 7338 7168
Specific enquiries can be made using the EBRD Enquiries form.
Environmental and Social Policy (ESP)
The ESP and the associated Performance Requirements (PRs) set out the ways in which the EBRD implements its commitment to promoting “environmentally sound and sustainable development”. The ESP and the PRs include specific provisions for clients to comply with the applicable requirements of national laws on public information and consultation as well as to establish a grievance mechanism to receive and facilitate resolution of stakeholders’ concerns and grievances, in particular, about environmental and social 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 additionally requires its clients to disclose information, as appropriate, about the risks and impacts arising from 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 activities of the Bank 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 Bank believes that identifying and resolving issues at the project assessment approval stages is the most effective means of ensuring the integrity of Bank transactions. OCCO plays a key role in these protective efforts, and also helps to monitor integrity risks in projects post-investment.
OCCO is also responsible for investigating allegations of fraud, corruption and misconduct in EBRD-financed projects. Anyone, both within or outside the Bank, who suspects fraud or corruption should submit a written report to the Chief Compliance Officer by email to email@example.com. All matters reported will be handled by OCCO for follow-up. All reports, including anonymous ones, will be reviewed. 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 sets out how the EBRD discloses information and consults with its stakeholders so as to promote better awareness and understanding of its strategies, policies and operations following its entry into force on 1 January 2020. 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 (e.g. 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 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; how to submit a Request for review; or contact IPAM via email firstname.lastname@example.org to get guidance and more information on IPAM and how to submit a request.