The provision of long-term senior debt of up to USD 105 million for the development, construction and operation of a wind power plant with an installed capacity of 240 MW located in the Khizi and Absheron regions of eastern Azerbaijan (the Project). ACWA Power Azerbaijan Renewable Energy Limited Liability Company, a special purpose vehicle established in Azerbaijan, will act as the borrower. ACWA Power will act as the sponsor for the project.
The Project will add 240 MW of wind generation capacity to the power system of Azerbaijan. This would help substitute natural gas-based power plants and help in meeting the renewable energy targets set by the Government of Azerbaijan in line with county's commitments under the Paris Agreement. The Project will also result in strong environmental benefits with estimated annual CO2 emissions savings of up to 400,000 tonnes. This will assist the country in its low-carbon transition, reducing its current high reliance on thermal power generation.
ETI score: 65
The transition impact of the Project is expected to come mainly from its contribution to the currently state-dominated Azerbaijani power sector by adding a new private entrant. The Project is expected to be the first privately owned utility scale wind power project in the country. The Project will also introduce a new international power sector sponsor to the country in a key milestone for power sector development.
The transition impact of the Project will also stem from its alignment with the EBRD's Green Economy Transition approach (GET) as it will allow producing electricity using wind power, which will assist the country in its low-carbon transition, reducing its current high reliance on thermal power generation.
TO BE DEFINED
ACWA POWER AZERBAIJAN RENEWABLE ENERGY LIMITED LIABILITY COMPANY
ACWA Power Azerbaijan Renewable Energy Limited Liability Company (the Borrower) is a limited liability company incorporated in Azerbaijan for the sole purpose of the Project.
ACWA Power is an international developer of power generation and desalinated water projects.
EBRD Finance Summary
Up to USD 105 million loan to the Borrower to finance the development of a 240 MW wind power plant. Along with the EBRD, a number of other financial institutions are expected to support the Project.
Total Project Cost
Financing structure: The Bank is additional in providing long-term financing at terms and conditions not available in the local market for this major infrastructure project, particularly in view of the limited liquidity caused by the COVID-19 pandemic and as this is one of the first private project financings of a renewable energy project in Azerbaijan.
Policy, sector, institutional, or regulatory change: The Bank is actively involved in the development of policy dialogue in Azerbaijan. The Project is a key milestone for the country's renewables sector, and will further its green agenda, serving as a pilot for further renewables development.
Environmental and Social Summary
Categorised A (ESP 2019) and High Risk due to the wind sector, and size of the Project, cumulative impacts and proximity to candidate Emerald/IBA Site. The cumulative development of a two greenfield 240 MW wind farms (WPP) and grid connection infrastructure is associated with potential considerable E&S risks, notably biodiversity, land and social impacts, and requires an Environmental and Social Impact Assessment (ESIA) in line with EBRD ESP and 60 days' disclosure prior to the Board consideration.
An Environmental and Social Impact Assessment (ESIA) as well as supplementary ESIA package, inclusive of NTS, ESAP, SEP and LARF have been developed by an international Consultant engaged by ACWA Power and disclosed on ACWA Power's and EBRD's websites on 20 May 2022.
EBRD ESDD is being undertaken by an independent E&S Consultant and includes review of the ESIA and gap analysis, assessment of cumulative impacts from the Project and the associated infrastructure, community and livelihood impacts resulting from land take and operation of wind farm, social, labour and safety aspects during construction and operation, as well as supply chain management. The ESDD is also reviewing potential impact on avifauna and need for mitigation measures based on a bird collision risk assessment.
The PSD will be updated after the completion of the ESDD.
Technical Cooperation and Grant Financing
Company Contact Information
+994 12 465 99 38
ACWA Power Azerbaijan office, Landmark Business Centre III, 90A Nizami street, Baku, Azerbaijan
PSD last updated
14 Jun 2022
Further information regarding the EBRD’s approach to measuring transition impact is available here.
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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).
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