Ukraine Renewable Energy Direct Lending facility

Location:

Ukraine

Project number:

39850

Business sector:

Power and energy

Notice type:

Private

Environmental category:

B

Target board date:

25 Nov 2009

Status:

Board Approved

PSD disclosed:

22 Oct 2009

Sub-projects signed under this framework

Project Description

The EBRD is considering replenishing the Ukraine Sustainable Energy Lending Facility (“USELF” or the “Facility”), originally approved on 10 November 2009, by adding EUR 50 million in new funding, thus bringing the total commitment to EUR 100 million. In addition, the EBRD is applying for a further EUR 20 million of concessional co-finance from the Clean Technology Fund (CTF), bringing total commitment from the CTF to EUR 40 million.  

The Facility will continue (i) to provide debt financing and technical assistance for renewable energy projects in Ukraine and (ii) to support policy dialogue and institutional capacity building in respect of renewable energy.

The Facility will continue to consider all forms of renewable energy generation project including hydro, wind, biomass, biogas and solar.

Sub-projects

Eco-Optima wind sub-project

Eco-Optima will build and operate a 12.5 MW wind farm in the Staryy Sambir region of Western Ukraine. The project includes the installation of 5 wind turbines with 100m high towers and 2.5 MW capacity each. Total net electricity of 25,416 MWh will be sold to the grid at the feed-in tariff.

Total financing needs for the project are estimated at EUR 20.5 million, which will be financed from the following sources:

(i) Eco-Optima equity contribution - EUR 7.2 million

(ii) EBRD senior loan - EUR 9.5 million

(iii) Clean Technology Fund senior loan - EUR 3.8 million from the EBRD CIF Special Fund.  

Eco-Optima LLC was founded in 2004 for the development of renewable energy projects in Ukraine.

Porogi solar energy sub-project

EBRD will provide a senior secured loan for the development, construction and operation of a 4.5MW solar power plant owned by a local project company Green Agro Service LLC, which will be located in the Vinnitsya region of south Ukraine. Power generation of the plant is estimated at 5,012 MWh/a.

Total financing needs for the project are estimated at EUR 9.5 million, which will be financed from the following sources:

(i) Green Agro Service equity contribution - EUR 3.8 million

(ii) EBRD senior loan - EUR 4.1 million

(iii) Clean Technology Fund senior loan - EUR 1.6 million from the EBRD CIF Special Fund. 

Hydropower small hydro power plants sub-project

EBRD will provide a senior secured loan to Hydropower LLC for development, construction and operation of two small hydropower plants on the Bily Cheremosh River in Western Ukraine. Small hydro power plants with total capacity of 1.6MW will produce 6,470 MWh per annum which will be sold to the grid at the feed-in tariff.

Total financing needs for the project are estimated at EUR 3.8 million, which will be financed from the following sources:

(i) Hydropower equity contribution - EUR 1.8 million

(ii) EBRD senior loan - EUR 1.3 million

(iii) Clean Technology Fund senior loan - EUR 0.7 million from the EBRD CIF Special Fund.

Ecoprod Biogas Project

Finance for the construction and operation of a 1.5 MW biogas plant as part of Ecoprod’s agricultural production facilities in Donetsk Oblast, Eastern Ukraine. 1.5 MW biogas plant will process 44,500 tons of Ecoprod own feedstock and produce 5.8 million m³ of biogas annually, which will be used for generation of 9,900 MWh electricity for sale to the grid at the feed-in tariff.

  • Total project finance EUR 5.5 million
  • EBRD senior loan EUR 3.1 million
  • CTF contribution EUR 1.1 million

Sunelectra Power Project

Finance for the construction and operation of a solar power plant with capacity of 4.2MW plant situated in Teplodar in the Odessa oblast, south Ukraine. The PV plant is planned to be equipped with ET-P660245WW 245Wp modules with polycrystalline technology supplied by ET Solar and PowerOne central inverters. Power generation of the plant is estimated at 4,819MWh/a

  • Total project finance EUR 9.29 million
  • EBRD senior loan EUR 3.86 million
  • CTF contribution EUR 1.53 million

Ivankiv Biomass

Development, construction and operation of an 18MW biomass power plant in Kiev oblast. The plant will process 213,000 tons of wood waste and generate 121,000 MWh of electricity per annum for sale to the grid at the feed-in tariff. The project is implemented in phases 6MW and 12 MW.

  • Total project finance EUR 25.9 million
  • EBRD senior loan EUR 9,9 million
  • CTF contribution - EUR 5.6  million

Gnatkov Solar Energy Project

Finance for the construction and operation of a solar power plant with capacity of 5MW located in Vinnitsa oblast, south Ukraine The PV plant is planned to be equipped with Yingli YL245P - 245 Wp modules with polycrystalline Silicon technology and will use eight inverters of the AEG Protect PV500 type, as well as fixed south-tilted mounting structure.

  • Total project finance EUR 5.4 million
  • EBRD senior loan EUR 3.8 million
  • CTF contribution - EUR 1.6 million

Transition Impact

The Transition impact of the Facility will continue to stem from the following factors:

  • Supporting framework for renewable energy market through regulatory reforms and capacity building: In Ukraine, an increasing share of a renewable projects cost has to be sourced domestically to be eligible for feed-in tariffs (FIT). The Energy Law sets the minimum local share content requirement (LSC) as a condition for a renewable energy project to be eligible for the FIT. The Energy Law requires 30% or 50% of local content depending on project’s commissioning date. The removal of the LSC requirement for RE projects will be a key priority of the policy dialogue associated with the replenishment of the facility. The Bank is also working on policy dialogue with the Ukrainian authorities on adoption implementation of new legislation to support reform of the Wholesale Energy Market, as well as in building the necessary institutional capacity for implementation both at the project level and within the enabling institutions such as the electricity regulator and UkrEnergo, the electricity transmission Company.
     
  • Demonstration of new replicable behaviour and activities: the Facility will continue supporting development and financing of renewable energy projects which are still at a relatively early stage of development in Ukraine, all of them privately owned.
     
  • Transfer of skills: The Facility is expected to continue building and transferring expertise related to renewable energy project development to Ukrainian companies

The Client

Private companies developing renewable energy projects in Ukraine.

EBRD Finance

EUR 100 million in the form of loans to private companies for developing renewable energy projects.

EUR 40 million in concessional co-financing from the Clean Technology Fund (CTF) (of which EUR 20 million have been approved and EUR 20 million will be applied for) will cover up to 20% of the facility volume.

Environmental Impact

Category B. Each individual transaction under the Facility will be subject to the Bank’s Environmental and Social Policy and required to comply with the Bank’s Performance Requirements. Therefore, each subproject will be subject to an Environmental and Social Due Diligence (ESDD), and categorized on a project-by-project basis, taking into account cumulative issues, as relevant. 

The Strategic Environmental Review undertaken for the Facility in 2011 will be used to as part of the ESDD on each project.  If a project is high risks and categorized as A category, an appropriate ESIA disclosure package will be developed and disclosed in accordance to the Bank’s Environmental and Social Policy and PIP requirements. Each new renewable project will be associated with a Non-Technical Summary, Stakeholder Engagement Plan (SEP) and an Environmental and Social Action Plan (ESAP), as appropriate.

Experience to date has shown that projects financed through the existing Facility have typically been of limited negative environmental and social impact due to the size and nature of the projects. ESDD has been conducted on each project, by the Project Consultant, following a standard format which measures project performance against the Bank's Performance Requirements (PRs) as well as National and EU environmental standards. All Project to date have been found to be compliant with the Bank’s PRs.

Borrowers will be required to comply with the Bank's Performance Requirements and provide the Bank with an annual report on environmental, health and safety issues.

There is a Strategic Environmental Review available for this project.

There is an Environmental and Social Impact Assessment available for this project: Non-Technical Summaries for each sub-project are available in English and Ukrainian on this link.

Technical Cooperation

The Facility will be supported by a comprehensive technical assistance programme designed to provide both institutional and project support.

1) Project Consultant – for identifying and appraising projects, doing technical due diligence and monitoring on the project implementation supported by TC funds of EUR 3.4 million.

2) Legal Advisor – for providing legal services related to due diligence, drafting and execution of legal agreements.

3) Institutional support – for providing assistance to Ukraine in improving its legislation and regulatory framework for renewable energy supported by existing Neighbourhood Investment Fund (NIF) TCs.

 

Business opportunities

For business opportunities or procurement, contact the client company.

For state-sector projects, visit EBRD Procurement: Tel: +44 20 7338 6794
Email: procurement@ebrd.com

General enquiries

EBRD project enquiries not related to procurement:
Tel: +44 20 7338 7168
Email: projectenquiries@ebrd.com

Public Information Policy (PIP)

The PIP sets out how the EBRD discloses information and consults with its stakeholders so as to promote better awareness and understanding of its strategies, policies and operations. Please visit the Public Information Policy page below to find out how to request a Public Sector Board Report.
Text of the PIP

Project Complaint Mechanism (PCM)

The Project Complaint Mechanism (PCM) is the EBRD's accountability mechanism. It provides an opportunity for an independent review of complaints from individuals and organisations concerning EBRD-financed projects which are alleged to have caused, or are likely to cause, environmental and/or social harm.

Please visit the Project Complaint Mechanism page to find information about how to submit a complaint. The PCM Officer (pcm@ebrd.com) is available to answer any questions you may have regarding the submission of a complaint and criteria for registration and eligibility, in accordance with the PCM Rules of Procedure.