The provision of € 24.9 million loan (in KZT equivalent) for the development, construction and operation of a 76 MWp solar PV power plant located in Karaganda region, Central Kazakhstan. The funds will be used to finance the 26MWp extension of the original project (the Project)
The Project will support Kazakhstan in its objective to increase the share of renewable energy in the energy mix and will contribute to achieving the Kazakhstan government's goal of renewable energy source sector (apart from large hydro) accounting for 3 per cent all power generation by 2020 (10 per cent by 2030).
ETI score: 70
70 The transition impact stems from the fact that the Project will assist Kazakhstan in diversifying its coal dependent power sector and reducing CO2 emissions and support gender inclusion in renewable energy sector in Kazakhstan.
KAZSOLAR 50 LLP
KazSolar 50 LLP is a SPV incorporated in Kazakhstan for the purpose of development, construction and operation of a 50 MWp solar PV power plant, and the subsequent 26MW extension located Karaganda region, Central Kazakhstan.
EBRD Finance Summary
EBRD loan amount - €24.9 million in KZT, GCF loan amount - US$ 11.54 million, CTF fund - USD 3.1 million.
Total Project Cost
The EBRD offers the long-term local currency loan with a tenor, which is above the market average and is necessary to structure the project in the face of regulatory, institutional, and macroeconomic uncertainties which include the current Covid-19 and foreign exchage volatility. Kazakhstan declared state of emergency on 15 March 2020, following the lockdown of Nur-Sultan and Almaty on 19 March 2020 and other cities including Karaganda on 30 March 2020, affecting both individuals and businesses (state of emergency has since been lifted while lockdowns are still selectively applied). The impact of COVID-19 is exacerbated by the drop in global oil prices and Kazakhstan's economy under significant stress. The GDP is projected to contract by 3 per cent by the EBRD's latest macroeconomic projections. The Covid-19 crisis might negatively impact the country's renewables sector which is still at its nascent stage of development.
The institutional uncertainty is associated with the recently introduced auction scheme, which needs to deliver a critical mass of successful projects to inspire investor confidence and ensure strong participation in the following tenders in the new post COVID environment. This showcase would be important as the Government recently announced its plans for November 2020 renewables auctions as the implementation of auctioned projects got delayed. The proposed operation will therefore send a strong signal to other developers and investors that the Kazakh renewable energy sector remains open for business in the post COVID environment.
Environmental and Social Summary
Category B (ESP 2019) and Low to Medium risk due to land use and construction process. Environmental and social risks and impacts associated with the addition of 26 MW capacity to an existing Bank funded 50 MW solar PV plant will not be associated with significant environmental or social impacts and implemented within the existing footprint and land use. The Project is consistent with the GET approach and the GET share is 100%.
In-house desk-based ESDD has reviewed the Client's E&S reporting, including status of the ESAP implementation, and confirmed that the Project is compliant with the host country's EHS legislation and the EBRD PRs, and good progress has been achieved in implementing mitigation measures and establishment of the Project's E&S management systems. Potential adverse environmental or social impacts of the extension Project are associated mainly with the construction activities and the subcontractor's labour, health and safety and social standards and capacity; therefore Sponsor will have to ensure full implementation of its corporate E&S standards at the Project level and appropriate site supervision. The Company has been developing a site specific community investment program as part of the ESAP and CSR to support local developments. Stakeholder Engagement Plan (SEP) and Non-Technical Summary (NTS) will be updated to include the new Project components and disclosed on the Company's web site.
Overall, the Company has been implementing the Project to the satisfaction of the Bank and the ESDD confirmed that the existing ESAP does not need to be amended. The Client will continue implementation of the agreed ESAP and overall E&S performance will be monitored by the Bank via Annual Environmental and Social Reports.
Technical Cooperation and Grant Financing
Company Contact Information
+7 778 9170 991
Zhambyl street. 85V, Saran 101201, Karaganda region, Republic of Kazakhstan
PSD last updated
30 Jun 2020
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Project Complaint Mechanism (PCM)
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