Project detail - KASLETI 2 LLC

Who is our customer

FMO’s client is Kasleti-2 LLC, the project company for a green-field hydroelectrical power plant. Estimated total project costs are USD10.1 million. The project has been developed by Hydrolea LLC.

What is our funding objective?

The objective of FMO’s financing is to fund the development, construction, and operation of a 10MW run-of-the-river hydroelectric power plant which will be located on the Kasleti river close to Khaishi village, in the Enguri valley, in the Mestia municipality in the north west of Georgia (the “Project”).

Why do we fund this investment?

FMO will fund this project as it provides an additional source of clean and renewable energy in Georgia. FMO provides a long tenor to a small scale hydroelectric power plant.

What is the Environmental and Social categorization rationale?

This is a category B+ project with potential limited adverse social and environmental (E&S) risk and / or impacts that are few in number, generally site-specific, largely reversible and readily addressed through mitigation measures. EBRD is the E&S Lead and while this project has been screened against all Performance Standards, FMO’s E&S due diligence indicates that the investment will have impacts which must be managed in a manner consistent with the following Performance Standards: PS 1 - Assessment and Management of Environmental and Social Risks and Impacts PS 2 - Labor and Working Conditions PS 3 - Resource Efficiency and Pollution Prevention PS 4 - Community Health, Safety and Security PS 6 - Biodiversity Conservation and Sustainable Management of Living Natural Resources The habitats present in the project area are not considered to be highly threatened or unique ecosystems.The Construction of the HPP will temporarily disturb fauna and may cause its migration from the project area. PS5 - Land Acquisition and Involuntary Settlement: Not applicable. No residential land plots and houses and no remote structures (barns on pastures etc.) are affected by the project and no physical displacement is envisaged. Residents of the villages Kvemo Tsvirmindi and Zemo Tsvirmindi are not losing private land, assets or sources of income related to land. The project will not increase landlessness or homelessness of local population. The project will not affect arable lands and annual crop production or fruit tree growing. No pastures are affected by the land take and no access to any pastures is blocked. PS7 - Indigenous Peoples - There is no record of presence of indigenous peoples in the direct or the indirect area of the project. PS8 - Cultural Heritage – No historical, architectural or archaeological sites were found in the project area. FMO will periodically review the project’s ongoing compliance with the Performance Standards.