ELEM Solar Project - Photovoltaic plant

Location:

North Macedonia

Project number:

50415

Business sector:

Energy

Notice type:

Public

Environmental category:

B

Approval date:

12 Dec 2018

Status:

Signed

PSD disclosed:

11 Sep 2018

Translated version of this PSD: Macedonian

Project Description

Provision of up to EUR 7 million long-term senior debt financing for the construction of a 10MW PV plant, adjacent to the existing TPP Oslomej. The PV plant will be constructed on the exhausted coal mine of the TPP Oslomej and the electricity produced will be directly sold in the nearby grid.

Project Objectives

The objective of ELEM is to make its first investment into PV plant, as part of the Company's strategy to decarbonise and develop a portfolio of RES projects. Furthermore, ELEM will take advantage of the proximity of the existing TPP substation, and at the same time the Project is likely to offset ELEM's obligation to invest in rehabilitating the site.

Transition Impact

Good.

The project will target the Green Transition Quality by supporting the development of a 10MW solar PV plant which is expected to displace 12,177 tonnes of CO2 annually. Electricity produced will be sold through the market without depending on a support scheme such as the feed-in-tariff.

Client Information

ELECTRICITY GENERATION COMPANY OF THE REPUBLIC OF MACEDONIA

ELEM is a public electricity generation utility, fully owned by the Government of FYR Macedonia.

The Company provides around 90% of the entire domestic production. Average annual production is about 3,600 GWh from TPP (installed capacity of 842 MW) and 1,200 GWh from the HPP (installed capacity 554 MW). ELEM also operates the first Wind farm in the Country, with installed capacity of 36.8 MW and production of about 100 GWh annually.

EBRD Finance Summary

EUR 7,000,000.00

Senior corporate loan to ELEM JSC

Total Project Cost

EUR 8,771,000

Environmental and Social Summary

Categorised B (Environmental and Social Policy, 2014). Due diligence confirmed that the environmental and social (E&S) impacts associated with a small scale (10MW) solar photo voltaic (PV) plant in an industrial zone are site specific and can be readily mitigated through the implementation of a targeted action plan. Independent Environmental and Social Due Diligence (ESDD) has been undertaken on the Project and an Environmental and Social Action Plan (ESAP) has been agreed with the Client.

The E&S risks and impacts of project are to a large extent mitigated by the site selection, utilising a brownfield site used for disposal of surplus overburden, within a former lignite mine provides rehabilitation and beneficial re-use of this currently unused land.  Preliminary results from a Phase 2 contamination assessment, supported by the Bank, indicate low potential for the presence of pre-existing contamination and any associated remedial work prior to construction. The site is located in close proximity to an existing sub-station with only a short cable connection required and is 2km from the nearest village.

This pilot project represents the opportunity to demonstrate the effectiveness of a new type of renewable energy by the public electricity generation utility and will assist with further diversifying the energy mix in the country which is currently dependent on non-renewable sources. Successful implementation of this project could mean it becomes one of several more PV plants to be developed as part of mine closure and rehabilitation, delivering renewable energy at the location of a former carbon intensive energy producer.

The ESDD focused on reviewing the Client's E&S institutional capacity and management systems to ensure Project's compliance with EBRD Performance Requirements ("PR"), supported the site selection and also included analysis of specific environmental and social issues. Based on a high-level biodiversity assessment, only woodland, grassland and wetlands habitats and associated species of local value are present within the site.  No cultural heritage sites have been registered or reported at this location and considering its former use the probability of chances finds is very low. Visual impacts are not considered to be significant due to the existing modified nature of the landscape and distance to nearest residential receptors. The project has prepared an EIA Elaborate report in accordance with national legislation which has been approved by the Ministry of Environment and Physical Planning.

The Client will need establish a team to implement the Project, including specialist environmental and social resources and further develop their Environmental and Social Management System including an environmental and social management plan, community and employee grievance mechanisms.  Relevant construction phase mitigations, including those related to occupational and community health and safety will need to be included in the Engineering Procurement and Construction (EPC) contract and their implementation monitored by the Client.

To ensure compliance with the Bank's PRs and to address the gaps identified at the ESDD, an ESAP has been agreed with the Client. The Bank will monitor the implementation of the Project via annual E&S reports review and monitoring site visits as required.

Technical Cooperation

The Project benefited EUR 74,840 TC funds from the Italian Technical Cooperation Fund to support the technical due diligence for the PV plant which included a technical review of the existing radiation measurements. The TC consultants prepared a preliminary design of the site and provided guidance to the company on the minimum technical requirements to be included in the tender specifications to ensure alignment of the project with international best practice. ELEM has co-financed the costs with 10% cost sharing.

Also project preparation was suuported by EUR 75,000 TC sourced from the Shareholders Special Fund, used to carry out environmental and social due diligence.  The consultant undertook an Environmental and Social Assessment including assessing compliance with applicable laws and the EBRD ESP and PRs, identifying any potentially significant future adverse environmental and social impacts associated with the project and determining the measures needed to prevent or minimise and mitigate the adverse impacts. The Consultant has also carried out a site investigation to determine the extent of any existing contamination and any pre-construction ground remedial work required.

In addition, the project will benefit from TC Grant during project implementation, of EUR 75,000 from the Green Economy Transition (GET) Project Preparation and Implementation Framework to support the Company with the tender procedures and with the supervision of construction works.

Company Contact Information

Igor Ilijovski, B.Sc.El.Eng
igor.ilijovski@elem.com.mk
+ 389 (0) 2 31 49 245
+ 389 (0) 2 32 24 492
www.elem.com.mk
JSC MACEDONIAN POWER PLANTS 11 Oktomvri 9, 1000 Skopje, R. Macedonia

Business opportunities

For business opportunities or procurement, contact the client company.

For state-sector projects, visit EBRD Procurement: Tel: +44 20 7338 6794
Email: procurement@ebrd.com

General enquiries

EBRD project enquiries not related to procurement:
Tel: +44 20 7338 7168
Email: projectenquiries@ebrd.com

Public Information Policy (PIP)

The PIP 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. Please visit the Public Information Policy page below to find out how to request a Public Sector Board Report.
Text of the PIP

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 how to submit a Request for review through our confidential online form, by email, mail or telephone. IPAM is available to discuss your concerns and answer any questions you may have about the submission or handling of Requests, which follow the Project Accountability Policy and Guidance. Requestors’ identities may be kept confidential, upon request.

Share this page: