Modus Biogas Portfolio Phase II

Location:

Belarus

Project number:

50393

Business sector:

Power and energy

Notice type:

Private

Environmental category:

B

Target board date:

13 Feb 2019

Status:

Concept Reviewed

PSD disclosed:

11 Jan 2019

Project Description

The provision of a senior loan of up to US$ 24 million to four special purpose vehicles (the "Borrowers") established in the Republic of Belarus for the purpose of developing and operating a portfolio of 4 biogas power plants with 7 MW aggregated installed capacity in Belarus (the "Project").

The Borrowers will be 100per cent ultimately owned by UAB Modus Group (the "Sponsor"). The biogas power plants will generate electricity and sell their power to the regional subsidiaries of Belenergo, the Belarusian state-owned utility company.

Project Objectives

The Project will support the development of renewable power generation in Belarus. Renewable generation capacity in Belarus currently amounts to an estimated 266 MW, around 2.5 per cent of the total electricity generation capacity.

The Project will also lead to the increase in private ownership in the generation sector in Belarus, where state-owned Belenergo still accounts for 89 per cent of the 10GW of installed capacity. The
Project will add 7MW to the privately owned capacity in Belarus.

Transition Impact

The Project will target the "Green" quality by supporting the Sponsor develop its portfolio of electricity generation assets through financing the construction and operation of a 7 MW biomass power plant in Belarus. Once fully operational, the Project will result in (i) CO2 emissions savings of approx. 26,806 tonnes annually and (ii) waste minimisation and further greenhouse emissions avoidance from methane fugitive emissions that would be the result of annual waste degradation.

Client Information

The Borrowers will be special purpose vehicles incorporated in Belarus for the purpose of developing, constructing and operating the Project. The Borrowers will be 100 per cent controlled by
UAB Modus Group. UAB Modus Group is a holding company based in Vilnius, Lithuania with four business segments: Automotive dealership, Real Estate, Services and Energy. The Sponsor's energy
business has approximately 30 MW installed capacity of biogas power plants and solar photo voltaic power plants in operation in Lithuania, Latvia, Poland and Belarus.

EBRD Finance Summary

USD 24,000,000.00

A senior secured loan of up to US$ 24 million (up to € 21.2 million equivalent).

Total Project Cost

USD 34,500,000.00

The total project costs is approximately US$ 34.5 million (€ 30.5 million equivalent).

Environmental and Social Summary

The Project is categorised as B under ESP 2014. Environmental and social issues associated with the construction of four biogas power plants with total 7 MW capacity in Belarus can be readily
assessed and mitigated based on the results of the Environmental and Social Due Diligence (ESDD).

The ESDD will be carried out based on the site visit, questionnaire review, local EIAs documents revision and the results of the technical due diligence to ensure that the Project is structured to comply with the relevant Bank PRs and National legislation. Specific attention will be placed on the technology and abatement measures, site location sensitivities, as well as fuel supply. Based on the ESDD, an Environmental and Social Action Plan will be developed and agreed with the Borrower to address any identified issues. The ESDD process is still ongoing and the results will be updated here following its completion.

Technical Cooperation

€ 60,000 technical cooperation funds will be placed for technical due diligence. The funds will be provided via the existing Green Economy Project Preparation and Implementation Framework financed by the Government of Japan.

Company Contact Information

Gediminas Norkunas
gediminas.norkunas@modus.group
+370 5 274 0440
+370 5 274 0444
http://www.modusenergy.ie/
J.Balcikonio st. 9 (8th floor) LT-08247, Vilnius

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