ACWA Sunrise Al Mafraq Solar PV

Location:

Jordan

Project number:

48322

Business sector:

Power and energy

Notice type:

Private

Environmental category:

B

Target board date:

20 Jul 2016

Status:

Disbursing

PSD disclosed:

18 May 2016

Translated version of this PSD: Arabic

Project Description

A senior secured loan of up to USD 27 million to finance the construction of a 50 MW solar photovoltaic plant located within the King Hussein Bin Talal Development Area near the city of Al Mafraq in Mafraq Governorate, 80 km north of Amman in Jordan. The Project will be one of the first utility-scale solar plants of this size in Jordan and will support the country in increasing its renewable energy capacity and reducing its reliance on costly hydrocarbon imports.

Project Objectives

Project rationale stems from Jordan's strategy to procure cost-effective, indigenous energy supplies to mitigate its energy crisis. As part of the government's second round of direct proposals for solar ("Round 2"), the Project represents an important part of its ambitious programme to generate 10% of Jordan's electricity demand from renewables by 2020.

Transition Impact

The Project will assist Jordan in diversifying its power sector which is heavily focused on thermal power generation. It will increase the generation of energy through indigenous renewable sources and will be developed to comply with EBRD's E&S Policy 2014, which requires Projects to meet EU environmental standards.

The Project marks the transition from a feed-in tariff model (Round 1 of government-run direct proposals process) to a tender process in which the tariff is set competitively (Round 2). Consequently, the Project will be one of the cheapest sources of electricity of any kind in Jordan and the wider region. The successful implementation of Round 2 will demonstrate the benefits of using a competitive process and will establish this as the model for future rounds.

Client Information

The Local Company for Water and Solar Energy Projects PSC.

The Borrower will be a special purpose vehicle to be incorporated in Jordan for the sole purpose of developing, constructing and operating the Project. The Borrower will be ultimately owned by International Company for Water and Power Projects (ACWA Power), one of the Middle East leading power and water players with more than 7.6 GW of operational power assets owned, 9.2 GW under construction, and 5.9 GW in advanced development.

EBRD Finance Summary

USD 27,000,000.00

Up to USD 27 million senior secured loan, alongside parallel or syndicated facilities of the same amount.

Total Project Cost

USD 72,000,000.00

USD 72 million.

Environmental and Social Summary

Category B. The 50MW solar PV plant is located in the KHBTDA industrial zone, adjacent to several houses to the north. The closest conservation site, an Important Birds Area, is in 7 km to the south of the site. The archaeological authorities confirmed that the plant does not impact any designated cultural heritage monuments areas. The Project has been subject to a Jordanian Environmental and Social Impact Assessment (ESIA) that is currently going through the permit approval process issue by the Competent Authorities.

The Project was categorised B (ESP 2014) following an Initial Environmental and Social Examination in April 2016 by the Bank's environmental expert, and the scope of the Environmental and Social Due Diligence (ESDD) was determined accordingly. An independent consultant is contracted to carry out the ESDD of the Project under the terms of reference prepared by the Bank. The ESDD focused on reviewing Client’s E&S institutional capacity and management systems to ensure Project’s compliance with EBRD Performance Requirements (“PR”), analysis of specific environmental issues such as dust emissions, water use and wastewater management, raw materials sustainability and supply chain issues, waste handling of broken or old panels, and review of specific social issues, including plant’s visual impacts, land acquisition and compensations for loss of grazing land, local employment opportunities, construction workers influx management, cultural heritage, and occupational and community safety among others.

ESDD assessed the social investment needs of the local community and required stakeholder engagement, and based on this is recommending to implement a specific Corporate Social Responsibility (“CSR”) programme and Stakeholder Engagement Plan (“SEP”). A Non-Technical Summary (“NTS”) was prepared for the Project and posted on the Company’s website, as well as being made available as hard copies locally to facilitate information disclosure in the neighbouring community.

To ensure compliance with the Bank’s PRs and to address the gaps identified at the ESDD the ESAP has been developed and agreed with the Client. The Bank will monitor the implementation of the Project via annual Environmental and Social reports review and monitoring site visits when required.

A Non-Technical Summary (NTS) of the Project was prepared as part of the Jordanian ESIA process.

The Bank will monitor the implementation of the Project via annual Environmental and Social reports review and monitoring site visits when required.

Technical Cooperation

None.

Company Contact Information

Alexandre Allegue
aallegue@acwapower.com
+971 (0)4 509 1061
+971 (0)4 385 9625
http://acwapower.com/
ACWA Power Nassima Tower, Sheikh Zayed Road P. O. Box 30582 Dubai, UAE

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