An investment of EUR 7.5m in the green senior unsecured fixed coupon corporate bond (the Green Bond) issued by Photon Energy NV (the Company).
This is a follow-on operation of the Bank's investment of EUR 10m in the Company's inaugural EUR 55m green bond (maturing on November 2027) which took place at the end of 2021 (Opid 52971). The Company is to issue additional EUR 15m green bond with the same terms in two tranches; the first EUR 10m in May 2022 and the second EUR 5.0m to be made in 3Q 2022. The Bank's investment will be up to 50% of each tranche.
The Company has a pipeline of 340+ MW solar projects in the CEE region (including 27 MW in Hungary, 194 MW in Poland and 225 MW in Romania) and Australia. The Bank's proceeds will be used to finance the development of solar projects in the Central and Eastern Europe region, with the Hungarian and Romanian pipeline being currently the most advanced.
ETI score: 60
Competitive: The operation will support the development by the Company of new RE capacity in Hungary, Poland and Romania. This new capacity will help to increase the share of private generation and facilitate further competition in the countries' energy markets.
Green: The Project is 100% GET and will contribute to climate mitigation through the addition of new solar capacity. While it is most likely that the first project to materialize after this additional top-up issuance would be a solar portfolio of 37 MW in Romania, a conservative assessment was taken in assessing the CO2 target savings. The Bank's proceeds of up to EUR 7.5m are expected to correspond to an increase of 7.5 MW in solar capacity. This 7.5 MW addition will generate 9.86 GWh of electricity annually, contributing to 4.08 thousand tons of CO2 savings per annum.
PHOTON ENERGY NV
Photon Energy NV, a corporation incorporated in the Netherlands with major substances in the Czech Republic (the Company), is a regional renewable developer with an operating portfolio of 90.5 MW in small sized solar PV power plants in Czech Republic, Slovakia, Hungary and Australia and an ambition to become a regional independent renewables producer.
EBRD Finance Summary
Total Project Cost
- Financing structure: EBRD financing is expected to effectively 'close the funding gap' and allows carrying out a successful book-building process with appropriate scaling back in case of oversubscription.
- Resource mobilization: EBRD's involvement in a debt capital market transaction provides comfort to other investors and further widens market participation.
Environmental and Social Summary
Categorised B (2019 ESP) and High-Medium risk due to the solar supply chain issues related to labour risks in China and additional information required to assess E&S sensitivity of the pipeline. The extension of the existing bond transaction with this Client was subject to the limited ESDD with review of the recent Sustainability report, and ESAP compliance status updates.
The Company is implementing the existing ESAP and committed to comply with National and EU legislation inclusive EU disclosure and reporting requirements. The ESDD also confirmed that the Company has the institutional capacity to implement the Bank's PRs and none of the proposed sites are located in sensitive areas and would not fall under the Banks Environmental and Social Policy A category.
As part of the original project Framework Agreement the Client agreed to introduce enhanced procurement procedures to minimize supply chain risks associated with the sourcing of PV panels from China and related human rights issues. The Bank's participation in this top up of the existing green bond is related to 7.5MW increase in solar PV capacity of the pipeline in Romania and Hungary. There is no new locations associated with this transaction. Therefore, the existing ESAP remains valid, but the Framework Agreement will have to reflect the updated Management Approach to distributed solar projects. Therefore, the Client is being consulted on the need to limit future projects to 5MW capacity and to incorporate GTS use for the procurement of solar panels.
The Project is eligible as 100% GET and is considered aligned with the objectives of the Paris Agreement. The assessment of the physical climate risk of the CART Counterparty After Risk Transfer was undertaken and resulted in a Physical Climate Risk (PC) score of 1.
Technical Cooperation and Grant Financing
Company Contact Information
PSD last updated
08 Jun 2022
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