KAZREF II - Borey Wind

Location:

Kazakhstan

Project number:

52857

Business sector:

Energy

Notice type:

Private

Environmental category:

B

Approval date:

15 Dec 2021

Status:

Concept Reviewed

PSD disclosed:

09 Nov 2021

As permitted by paragraph 2.6 of Section III of the Access to Information Policy, disclosure of this PSD was deferred in accordance with paragraph 1.4.4 of the Directive on Access to Information.

Project Description

The provision of a senior loan of up to KZT 19.3 billion (equivalent to US$ 44.83 million) to Borey Energo LLP to finance the development, construction, and operation of a wind power plant in central Kazakhstan, with a total installed capacity of 100 MW, as well as construction of a double-circuit 110kV line to connect to the 220kV Shygys substation.

Project Objectives

The project will support Kazakhstan in its objective to increase the share of renewable energy in the energy mix, contribute to reducing Kazakhstan's carbon intensity, and address the country's increasing electricity demand.

Transition Impact

ETI score: 70

The Transition Impact arises from the Green and Inclusive qualities:

Green - the project entails the addition of 100MW of RES capacity added to Kazakhstan's generation profile.

Inclusive i the project will contribute to Gender inclusion and promote access to employment and entrepreneurship opportunities for women in Kazakhstan's renewables sector. 

Client Information

BOREY ENERGO LLP

Borey Energo LLP, a special purpose entity incorporated in the Republic of Kazakhstan to implement the project, will act as a borrower.  The borrower is wholly-owned by Sungrow Renewables Development Co, a Chinese company that develops renewable projects in China and worldwide, which has developed 1.9GW of wind capacity globally. 

EBRD Finance Summary

USD 44,830,000.00

A senior loan of up to US$ 44.83 million in KZT equivalent (KZT 19.3 billion) in favour of the Borrower, Borey Energo LLP.  The Project is expected to be co-financed with another financial institution in the amounts of up to KZT 19.3 billion (equivalent to US$ 44.83 million).

Total Project Cost

USD 141,780,000.00

US$ 128.8 million in KZT equivalent (KZT 54.99 billion)

Additionality

The EBRD is providing provides a long-term loan with a tenor that is scarcely available on the commercial market in Kazakhstan, especially for structured project finance transactions of this nature. Under the current circumstances, long-term local currency financing is not readily available in Kazakhstan. Moreover, the EBRD's good track record in the country provides comfort to the sponsor, enabling its entry into the Kazakh market. The Bank is also additional in terms of requiring adherence to EHS aspects and the EBRD PRs, which are stricter than local requirements.  Through the project, the Bank will support policy and regulatory work to promote inclusion opportunities in the renewable energy sector.

Environmental and Social Summary

The Project is Category B under the 2019 Environmental & Social Policy. The Project considered for the EBRD's financing is a 100MW Borey wind farm located located near Bulaksay village and Saryoba station in the Arshaly district of Akmola, central Kazakhstan. This will be a first stage of a larger 206MW project to be developed over the next few years by the Sungrow. The wind farm will be connected to the national grid via a 42-km long overhead powerline to the existing 110kV KEGOC substation Shygys. The project has received permissions from competent local authorities, and a local EIA in line with national regulations was prepared by the developer. The construction is envisaged to start in 2Q 2022.

The independent consultants were engaged to carry out the Project's ESDD and additional cumulative E&S assessment of the whole development. The ESDD confirmed that the wind farm is not located in E&S sensitive areas, and there are no protected or designated nature reserves within 50-km of the Project. The centreline of the nearest bird migratory route is located 8-km from the site as confirmed by the ornithological studies and the independent ESDD. The area's ecological value is considered to be relatively low with the vegetation and animals typical for the waterless zones of the steppe. Overall E&S impacts are judged to be site specific and manageable in compliance with the Bank's Performance Requirements via implementation of the ESAP mitigation measures.

The company completed land acquisition process for the plots under turbines and reached easement agreements for the land leases under the power line route through voluntary negotiations with the land owners. The project will not be associated with resettlement or livelihood loss and is compliant with the local development plans. Currently, the area is used for agricultural purposes as cattle pasture and wild animals hunting. The project would not cause significant impact as these activities can continue in adjacent available land areas. The impact of influx of up to 70 construction workers to the area with 1437 population is considered to be low.

The baseline biodiversity surveys of wildlife identified marmot, hare, roe deer, and fox on the open steppe, while the lakes/limans and shrubs also serve as habitat to hedgehog, frogs and shrew species. No bats were identified, and the sites lack of suitable hibernation or roosting places. During spring and autumn ornithological surveys carried out over 2020/21 no priority biodiversity features of concern or critical habitats were identified. The migratory bird surveys did not find migration fluxes neither congregatory species over the Project area. Bird species detected were related to open habitats and wetlands. The ESAP requires post-construction fatality monitoring, including application of carcass search protocol and involvement of an independent expert for ornithological surveys to re-evaluate bird impacts and establish adaptive management approach if high fatalities numbers are recorded.

As part of the E&S assessment noise propagation modelling was carried out confirming that after 300m the turbine maximum noise dissipates to 50dB in compliance with good industry practice. The results of the visual impact modelled via photomontage tool were shared with the affected parties and the impact is considered as significant due to rural open nature of the landscape and absence of other vertical structures. The shadow flicker impact can negatively affect a number of houses, and if standard industry thresholds are exceeded the turbines shutdown procedures would need to be implemented. Ice and blade throw, fire accidents, traffic safety and electro-magnetic radiation were also assessed among other public safety impacts and were considered as manageable via ESAP measures implementation.  

The ESAP developed based on the results of the ESDD identified a number of actions at the corporate management system level comprising inter alia of strengthening institutional capacity of the Sponsor to implement the EBRD PRs, contractor management, and additional stakeholder engagement and grievance mechanism application that will have to be implemented prior to the works start, during construction and operation. The ESAP is yet to be agreed with the Client prior to the Bank's Board meeting.

To ensure meaningful consultation process with Project affected people and third parties more detailed information on the Project, its impacts and how those will be minimised is being disclosed locally by appointed Community Liaison Officer and through relevant documents publication on the Company's website. Additionally, an international consultant developed a corporate level Stakeholder Engagement Plan (SEP) and a Non-Technical Summary (NTS) for the overall future development of 206MW in the area. Those documents along with the Project related stand-alone NTS and SEP for Borey 100MW wind farm are available in English and Russian on the Company's website:

http://boreyenergo.kz

The Bank will monitor the implementation of the Project through review of annual reports and site visits when deemed necessary.

Technical Cooperation and Grant Financing

Technical, Environmental and legal due diligence was co-financed by the Clean Technology Fund.

Company Contact Information

Alibek Tleubayev
alibek.t@sungrow-re.com
+7 701 587 91 88
http://boreyenergo.kz
4 Okzhetpes St., Bulaksay village, Arshaly district, Akmola region, Kazakhstan, 05004

PSD last updated

09 Nov 2021

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 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 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 compliance@ebrd.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 ipam@ebrd.com to get guidance and more information on IPAM and how to submit a request.

 

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