Project detail - CAUCASUS CLEAN ENERGY I PF, L.P.

Who is our customer

Schulze Global has established Caucasus Clean Energy I (CCEF) for the purpose of investing in a diversified portfolio of small and medium-sized hydropower plants in the country of Georgia. CCEF is managed by Schulze Georgia Global, backed by Schulze Global Investments. The sponsor, based in Singapore, has USD200m Assets Under Management and additional offices in Ethiopia, Mongolia and Georgia, among others. FMO previously invested in the Schulze Ethiopia Growth and Transformation Fund.

What is our funding objective?

The Fund’s strategy is to invest in approximately 10 small and medium-sized run-of-river hydropower plants in Georgia that each have an installed capacity of between approximately 10 MW and 20 MW, both operational and greenfield projects. The Fund seeks to provide not only capital, but also expertise in relation to these hydropower projects, building a shared vision and strategy together with the project developers for achieving both strong financial results and significant non-financial impact, particularly in respect of environmental and social impact.

Why do we fund this investment?

This investment contributes to important goals of FMO, as the initiative seeks to fast-track the development of renewable energy projects in Georgia. The investment facilitates the development of the nascent private equity sector in Georgia, unlocking capital for otherwise underfunded renewable energy projects. Hereby, the Fund contributes to the energy needs of the fast-growing economy.

What is the Environmental and Social categorization rationale?

The small to medium sized run-of-river hydropower projects the fund targets for investment will typically not be category A E&S risk projects. However, as it cannot be fully ruled out that such projects are targeted, FMO has precautionarily classified the fund as a category-A E&S risk fund. The environmental & social management system of the fund, which is already generally adequate, will be further improved and amended, as will the environmental and social management capacity. To this end, FMO will support this process with technical assistance and capacity building, together with its co-investors. This will involve the engagement of qualified experts to coach the team and to enhance environmental studies, community engagement and environmental, health & safety and labour conditions management. We judge our investment in the fund to be an important contribution towards improving the quality of environmental & social management by Georgian project developers of small hydropower projects to the level of international standards. An environmental & social action plan (ESAP) will be part of the legal agreement.