Shobak Wind Farm

Location:

Jordan

Project number:

49222

Business sector:

Power and energy

Notice type:

Private

Environmental category:

A

Target board date:

16 Nov 2017

Status:

Disbursing

PSD disclosed:

18 Sep 2017

Translated version of this PSD: Arabic

Project Description

Provision of a senior secured A/B loan of up to USD 52 million to Shobak Wind Energy PSC to finance the construction of a 45 MW wind farm (the Project) near the Shobak town municipality, 46 km northwest of Ma'an, and 160 km south of Amman in Jordan.

Project Objectives

The Project will sell all its power under a long-term power purchase agreement to the Jordanian National Electricity Power Company.

Transition Impact

The Project will support Jordan in increasing its electricity generation capacity from clean, renewable sources and reducing reliance on hydrocarbon imports.

Client Information

SHOBAK WIND ENERGY PSC

Shobak Wind Energy PSC is a special purpose vehicle incorporated in Jordan for the sole purpose of developing, constructing and operating the Project.

It is majority owned by Alcazar Energy Partners, a Dubai-based independent developer and power producer active in the Middle East, Africa and Turkey. Alcazar is owned, amongst others, by IFC, IFC Catalyst Fund, Mubadala Infrastructure Partners, Alcazar Projects and DASH Ventures.

The minority shareholder is Hecate Energy LLC, a US-based developer of energy projects operating in the US, Middle East, Asia and Africa.

EBRD Finance Summary

USD 26,000,000.00

The Project will be financed by up to USD 78 million of debt, of which the EBRD will provide up to USD 52 million. The EBRD loan will be composed of up to USD 26 million A loan and up to USD 26 million B loan syndicated to Europe Arab Bank (EAB).

The Islamic Corporation for the Development of the Private Sector (ICD), the private sector arm of the Islamic Development Bank Group, is expected to provide the balance of the required senior financing of up to USD 26 million through a parallel Islamic financing tranche.

Total Project Cost

USD 104,000,000.00

Environmental and Social Summary

The Project was categorised A as per EBRD's 2014 Environmental and Social Policy (ESP), as this is a greenfield facility located close to the Rift Valley birds migration trajectory and environmental risks are compounded by the presence of other operational windfarms in the area. In line with the ESP, an Environmental and Social Impact Assessment (ESIA), a Stakeholder Engagement Plan (SEP), a Non-Technical Summary (NTS), and the Environmental and Social Action Plan (ESAP) were disclosed in both Arabic and English languages.

The Project was subject to a comprehensive ESIA in 2016-2017 with bird and bat migration studies undertaken over 4 migration seasons taking into account the findings of the Cumulative Effects Assessment developed by the IFC in the region. The ESIA was approved by the local authorities in September 2017 and the Project has obtained the appropriate permits from the local competent authorities. The ESIA identified and assessed the Environmental and Social (E&S) risks and impacts associated with the Project and showed that E&S impacts are site-specific and can be mitigated through the implementation of targeted actions and management plans.

The Bank has undertaken additional independent Environmental and Social Due Diligence (ESDD) of the Project. This has confirmed that the Project is structured to comply with the Bank's Performance Requirements and National and EU requirements and that the sponsors have the institutional capacity to fully implement the Bank's Performance Requirements. As part of the due diligence, discussions were held with BirdLife, who expressed support for the Project so long as the mitigation
measures proposed in the ESIA and the ESAP are implemented.

Based on the ESDD, an ESIA disclosure package was developed in both Arabic and English languages. This includes an ESAP developed to ensure that the Project is constructed and operated in line with the Bank's Performance Requirements. Key impacts and risks considered include stakeholder engagement and livelihoods restoration, biodiversity, and workers and community health, safety and security. The Bank's due diligence confirmed that the wind farm is located in an area considered of low ecological significance; and that it is neither located within an intensive birds migrating route nor within high resident bird activity. Appropriate mitigation measures are in place to ensure archaeological artefacts are not impacted by the Project.

The ESIA and the ESAP include a suite of management and monitoring plans that will be undertaken, and monitored by the Bank, such as additional biodiversity surveys, ongoing ornithological monitoring, development of an active turbine management plan, chance finds procedures, labour and contractor management, stakeholder engagement activities, etc.

There is an ESIA available for this project.

Technical Cooperation

None.

Company Contact Information

Jean-Christophe Combourieu
jccombourieu@alcazarenergy.com
+971 4 558 7805
http://alcazarenergy.com/
Alcazar Energy Partners, Suite 802-803, South Tower Emirates Financial Towers, DIFC P.O. Box
506672, Dubai, UAE

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