FRV/Empire Al Mafraq Solar PV Project

Location:

Jordan

Project number:

48153

Business sector:

Power and energy

Notice type:

Private

Environmental category:

B

Target board date:

20 Jul 2016

Status:

Disbursing

PSD disclosed:

01 Jun 2016

Translated version of this PSD: Arabic

Project Description

A senior secured loan of up to USD 35.5million 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

AL AMBARATOURIA LL TAKA AL SHAMSIA

The Borrower will be a special purpose vehicle incorporated in Jordan for the sole purpose of developing, constructing and operating the Project. The Borrower will be ultimately owned by Abdul Latif Jameel Group, one of the Middle East's largest group of diversified businesses involved in automotive and engineering, financial services, land and real estate, consumer products and, following the acquisition of Fotowatio Renewable Ventures (FRV) in 2015, energy and environmental services. FRV is a global solar development company with a development portfolio of 3.8GW across emerging solar markets such as Australia, the Middle East, Africa and Latin America. FRV's management team has developed a strong record in the sector since 2006 - they have been involved in the development, financing, operation and maintenance of close to 700MW of PV and CSP solar plants representing more than USD2.1 billion in total financing with a large number of local and international banks.

EBRD Finance Summary

USD 35,470,612

Up to USD 35.5 million senior secured loan, in parallel with a loan to be provided by the French development agency Societe de Promotion et de Participation pour la Cooperation Economique (Proparco).

Total Project Cost

USD 98,446,854

USD 98.4 million.

Environmental and Social Summary

 

Category B (ESP 2014). The 50MW solar PV plant is located in the KHBTDA industrial zone. 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”) and permit approval process by the Competent Authorities.

The Project was categorised B, 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 after the site visit and documents review. An independent consultant carried 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 E&S reports review and monitoring site visits when required.

Client website

Non-technical summary

Technical Cooperation

None.

Company Contact Information

Shalabh Arora
Shalabh.arora@frv.com
+971 4 375 8554
+971 4 45 18 763
http://www.frv.com/
23rd Floor, Unit 2304, Jumeirah Business Center, Cluster G, Building G2, Jumeirah Lake Towers,
P.O. Box 392632 Dubai, UAE

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