KAZREF - Universal Energy Zhangiz Solar

Location:

Kazakhstan

Project number:

50640

Business sector:

Energy

Notice type:

Private

Environmental category:

B

Approval date:

09 Apr 2019

Status:

Disbursing

PSD disclosed:

19 Mar 2019

Translated version of this PSD: KazakhRussian

Project Description

A senior loan of up to USD 12 million equivalent in KZT on a project finance basis to Zhangiz Solar LLP for the development, construction and operation of a solar photovoltaic power plant ("SPP") with an installed capacity of 30 MWp near Zhangiztobe, in the East Kazakhstan region of Kazakhstan ("the Project"). The Project is expected to be co-financed by the Green Climate Fund of up to USD 5 million.

Project Objectives

The Project is expected to contribute to the Kazakh Renewables Framework objectives by supplying 30MWp of additional renewable energy capacity into the grid as well as introducing more private
ownership in the energy sector of Kazakhstan.

Transition Impact

The Project contributes to the Green Transition Impact (TI) quality by introducing additional solar energy capacity into the grid (approximately 42,000 MWh) as well as financing the Project on a
project finance basis. The Project is expected to contribute in excess of 35,450 tCO2 emissions savings annually to the Framework's goal of approximately 600,000 tCO2 annually. Furthermore,
the Project contributes to the Competitive quality by introducing a new international privately-owned company into the Kazakh renewables market.

Client Information

ZHANGIZ SOLAR LLP

Zhangiz Solar LLP (the "Borrower") is a Special Purpose Vehicle (SPV) established in the Republic of Kazakhstan for the development and construction of the solar farm. The ultimate sponsor/parent
of the SPV is Universal Energy Co. Ltd, a private Chinese power company focused on renewable energy investments.

EBRD Finance Summary

USD 12,000,000.00

Total Project Cost

USD 22,500,000.00

Environmental and Social Summary

Category B (ESP 2014). Environmental and social risks and impacts associated with the construction and operation of a greenfield 30 MWp solar photovoltaic power plant were assessed as part of the Environmental and Social Due Diligence (ESDD) and will be mitigated via the agreed Environmental and Social Action Plan (ESAP).

Independent ESDD has confirmed that the Project is currently fully compliant with the host country's EHS legislation and can be structured to meet the Bank's Performance Requirements (PRs) through employment of good E&S management practices, implementation of the ESAP and monitoring.

Potential adverse environmental or social impacts are associated mainly with the construction activities and the contractor's labour, health and safety and social standards and capacity, as well as
E&S management systems. The Project is not associated with any significant negative effects of land use and livelihood and this will be monitored during construction and early operation.

Biodiversity impacts are also expected to be low due to location and the absence of sensitive receptors. Some residual risks are associated with potential bird collision and will be addressed through regular bird mortality monitoring.

A number of the environmental and social management improvements were included in the ESAP, inter alia: enhancement of the EHS management system, contractor and supply chain management, construction noise and emission reduction, Stakeholder Engagement Plan and grievance mechanism. As part of implementing the ESAP requirements, the Company will implement a Corporate Social Responsibility Program (CSRP) aimed at community development and outreach, including local social infrastructure, and increasing awareness of the Project. The developed ESAP will be agreed with the Client prior to signing and its implementation and overall E&S performance will be monitored by the Bank via Annual Environmental and Social Reports. A Stakeholder Engagement Plan (SEP) and Non-Technical Summary (NTS) have been prepared for the Project.

Technical Cooperation

TC funding will be sought to co-finance due diligence costs subject to availability under the existing Kazakhstan Renewables Framework or Energy Efficiency Framework in accordance with the
Framework's criteria.

Company Contact Information

Mr. Min Gao
min_gao@universalenergy.com
+8613918186737

Business opportunities

For business opportunities or procurement, contact the client company.

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Email: procurement@ebrd.com

General enquiries

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Tel: +44 20 7338 7168
Email: projectenquiries@ebrd.com

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