An investment of up to PLN 80m (€ 17m) in the senior corporate green bond issued by R.Power S.A. (the "Company") under the Green Bond framework of PLN 1bn (€ 222m).
The proceeds will be used to finance and refinance capital expenditures for the construction and development of solar PV projects in Poland. The Company has also committed to invest a two times multiple of the Bank's funds in solar PV projects in the Bank's countries of operation.
ETI score: 60
Competitive: The transaction will support the development by the Company of renewable capacity in Poland. This new capacity will help to increase the share of private generation and facilitate further competition in the country energy market.
Green: The Project is 100 per cent GET and will contribute to climate mitigation through the addition of new solar capacity. The Bank's proceeds of up to €17m are expected to close the funding gap for the construction of additional 96MW of solar PV capacity, which in turn will generate 100GWh of electricity annually, contributing to 72 thousand tonnes of CO2 savings per annum. The Company has also committed to invest a two times multiple of the Bank's funds in solar PV projects in the Bank's COOs.
R.Power S.A. (the "Company") is a vertically integrated solar PV developer, EPC and O&M contractor and an independent power producer ("IPP") incorporated in Poland. The Company's current solar PV portfolio includes 38MW of operating capacity and a strong pipeline of assets under construction or at development stage.
EBRD Finance Summary
Total Project Cost
Bonds outstanding unde the Green Bond framework following the EBRD transaction.
Financial structure: The transaction is one of the Bank's first capital market investments since the start of the war on Ukraine and the first bond investments into a renewable developer in Poland.
Resource mobilisation: The Bank's participation in the issuance is to provide a valuable signal to the market and facilitate a successful placement in the current uncertain debt capital market environment.
E&S: The Company is fully committed to implement the EBRD's requirements on solar PV supply chain management, including developing robust supply management systems and ensuring future panel procurement has legally binding commitments to no presence of forced labour.
Environmental and Social Summary
The Project has been Categorised B in line with the 2019 ESP. The Project has a high-medium E&S risk profile due to allegations of forced labour in the solar supply chain. ESDD has been completed by ESD in line with capital market transactions approaches, which included a review of the Green Bond Principles ("GBP"), Second Party Opinion ("SPO") associated with the initial issuance and direct engagement with the Issuer. The SPO confirms the use of proceeds for renewable energy meets the 2018 GBPs and will lead to positive environmental impacts and advance the UN Sustainable Development Goal 7 (Affordable and Clean Energy) and no further ESDD is required.
The EBRD Management Approach has been applied to address the issue of forced labour and enhanced due diligence has identified that the refinancing component of the Transaction requires no further assessment. The enhanced due diligence has identified that the procurement of PV panels for projects already in development and operation has been from suppliers with which the EBRD has already engaged. With regards to future pipeline of projects, the Company ahas agreed to update and publish their corporate level policies on human rights, labour and working conditions and positions on zero tolerance to forced labour. In addition, the ESAP included in the Framework Agreement, requires that the Issuer develops and implements a corporate level supply chain management system to ensure appropriate due diligence is undertaken for all future procurement of PV panels. The management system will include a mechanism to cascade the corporate level requirements to contractors and suppliers and a mechanism to verify that the requirements have been met. In addition, the Company has agreed to participate with peers in appropriate industry group fora where such issues are discussed. Overall, the risks of forced labour related issues being associated with the future projects has been mitigated as far as possible and the Company has agreed to adopt good practices for supply chain management regardless of the EBRD's further involvement.
The Project is considered aligned with the mitigation objectives of the Paris Agreement as it features in the joint MDB aligned list. The Company agreed to incorporate climate adaptation assessments as part of their site selection and development, and report these together with appropriate climate reliance measures when deemed necessary under ESAP/FA.
Technical Cooperation and Grant Financing
Company Contact Information
+48 505 264 379
PSD last updated
29 Jul 2022
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