Project detail - LLC SYVASHENERGOPROM

Who is our customer

SyvashEnergoProm LLC (“Syvash” or “Project Company”) is a special purpose company incorporated in Ukraine and created to own, construct and operate the wind farm. The Borrower/Syvash is owned by East Renewable Energy AB which in turn is currently owned by NBT AS. Total Eren S.A. and NBT are in advanced discussions for Total Eren to subscribe to a share capital increase, following which Syvash will be (jointly) owned, directly or indirectly, by NBT AS and Total Eren S.A. (jointly the “Sponsors”). NBT AS is a Norwegian wind farm developer with operating wind farms in China. Total Eren has a proven experience in the construction and operation of wind and solar parks (in total over 1GW in operation or under construction) in over 10 countries. Both Sponsors and Syvash target to expand their wind farm to 250 MW for delivery of electricity to the grid (the “Project”). This expansion will be done in Phases, starting in 2018 with a Segment of 125 MW. When the Ukraine adopted a new Electricity Market Law mid-2017, many local and international developers and sponsors realized that Renewable Energy (“RE”) Projects were made possible with (i) long term power purchase agreements (“PPAs”) and (ii) a Feed-in-Tariff (“FiT”) in EUR.

What is our funding objective?

FMO intends to provide a senior loan up EUR 50 million. The proposed debt will be dedicated to the development and construction of a wind power plant in the Ukraine. The Sponsors will provide the necessary equity contributions. Through the construction and operation of this Project, sustainable generation assets are added to the local energy matrix which reduce the dependence upon fossil fuels. Because Syvash will be funded by EBRD under their Ukraine Sustainable Energy Lending Facility (“USELF III”) and EBRD’s E&S Performance Requirements do apply for this Project, reference is also made to EBRD’s website: (i) http://www.ebrd.com and (ii) https://www.ebrd.com/work-with-us/projects/psd/uself-nbt-syvash-wind.html

Why do we fund this investment?

The Syvash investments by the Sponsors do directly contribute to the realization of the policy of the Ukrainian government targeting a 15% in renewable electricity generation by 2030 (up from the current ~2%). This Project also complies with FMO’s Strategy with respect to energy security and energy transition, which is of particular importance for the Ukraine (being still heavily dependent upon nuclear and thermal generation).

What is the Environmental and Social categorization rationale?

For FMO E&S rationale and Ex Ante Disclosure, FMO uses for all its investments the (8) IFC Performance Standards (“PS”). The Project is an environmental and social risk category A according to FMO (and for EBRD under EBRD’s Performance Requirements) The main environmental and social risks of this Project are related to (i) the impact on the Biodiversity and (ii) the E&S management of all parties during Construction Phase. All IFC Performance Standards are applicable with the exception of IFC PS7 on Indigenous People. The Environmental and Social Impact Assessment did not identify any people or groups of people qualifying under the definition on Indigenous People. The impacts are mitigated through dedicated mitigation plans and activities. For example: development of plans to minimize noise during construction and operational phases and plans to avoid impacts on birds as much as possible. Land take of the Project is minimal, with sufficient land available to mitigate livelihood impacts. A grievance mechanism will be in place.

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Date	Total FMO financing
7/19/2022	EUR 0.05 MLN