The EBRD is considering an equity investment of the HUF equivalent to up to EUR 50 mln for a 25% stake in Iberdrola Renovables Magyarország Kft (“IBR Magyar” or “the Company”) by subscribing for new shares in the Company following a capital increase. Proceeds of the investment will fund the development, construction, and operation of the Company’s current portfolio of wind power projects in Hungary.
IBR Magyar currently has one wind farm with 50MW of installed capacity in operation whilst two additional wind farms, Scott and Csoma I, are expected to start operating in 2H2010, bringing the total installed capacity to 124MW. The Company will also develop additional projects in the country during the next five years.
The project will assist Hungary in achieving its renewable energy objectives. The investment will support the expansion of the renewable energy markets in Hungary through the development and commissioning of the portfolio of wind farms owned by IBR Magyar. By financing one of the most visible wind farm portfolios in Hungary, EBRD’s investment will provide comfort to project developers and other private investors and will demonstrate confidence in Hungary’s renewable energy framework. The project will also set appropriate standards for the environmental permitting process and wind assessments in the country.
Iberdrola Renovables Magyarország Kft (“IBR Magyar” or the “Company”) is a fully-owned Hungarian subsidiary of Iberdrola Renovables, S.A. (“IBR”), a world leading developer in the renewable energy industry.
25% equity investment in IBR Magyar of the HUF equivalent to up to EUR 50 mln, by subscribing for shares following a capital increase.
Categorised ‘B’ in accordance with EBRD’s 2008 Environmental and Social Policy (ESP), requiring a corporate environmental and social audit to assess the Company’s current environmental and social management systems against the Bank’s Performance Requirements (PRs).
A corporate audit of the Company’s current environmental and social management system and the Company’s past and current operations was undertaken by an international environmental consultant as part of the Bank’s Environmental and Social Due Diligence (ESDD). The Bank, in parallel, undertook an ESDD of the Hungarian operations, including a review of the existing and planned investment portfolios that cover each wind farm project and an assessment of site sensitivity, receptors and the permitting process.
The ESDD confirmed that none of the wind farms developed or currently under development are located in sensitive areas, such as Natura 2000 areas, or would be associated with economic displacement or public health concerns. The ESDD also confirmed that the current portfolio does not include wind farm projects that, due to their size or location, could be categorised ‘A’ according to Appendix 1 of the Bank’s ESP. However, the ESDD identified the need for improving the public consultation process at a corporate level as well as in relation to projects, in accordance with the Bank’s PR 10. The ESDD also identified the need for additional institutional strengthening of Environmental, Health and Safety (EHS) management systems.
Based on the ESDD, a comprehensive Environmental and Social Action Plan (ESAP) as well as a corporate Stakeholder Engagement Plan (SEP) have been developed and agreed with the Company. These require, among others, the formal appointment of an EHS manager and development of an environmental management system. The implementation of the current investment programme and the ESAP will enable to the Company to meet national, EU and its own corporate environmental standards as well as achieve compliance with the Bank's PRs, which will further improve the Company's environmental management and overall performance. As part of the ESAP requirements, the Company will develop stakeholder engagement procedures to ensure that meaningful public consultation takes place on all new projects.
Expected implementation requirements
• The Company will implement a corporate Environmental, Health and Safety Management System as required by the ESAP and appoint an environmental manager.
• The Company will implement the Bank’s Performance Requirements.
• The Company will provide to the Bank an annual environmental and social report, including updates on the implementation status of the ESAP and notification on any material accidents or incidents.
• The Company will facilitate periodic monitoring visits by Bank staff or appointed representatives, when deemed necessary.
Andres Bartrina Prat,
International Business Director, North Europe, Asia & Pacific
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