Project detail - SCATEC SOLAR BANGLADESH B.V.

Who is our customer

FMO is considering an investment opportunity in Scatec Solar Bangladesh BV, a company incorporated in the Netherlands and 100% owner of Bangla Sun Solar Energy Limited, a Bangladesh Special Purpose Vehicle (the “Project Company”) established for the development of a 62 MW solar PV plant located in the Baispukur village in the Nilphamari northern district of Bangladesh (the “Project”). The Project is being developed by Scatec Solar and local developer Rahimafrooz Renewable Energy Ltd.

What is our funding objective?

FMO’s financing will be used to finance the development of the Project which will be one of the first large scale solar PV plants in the country upon its completion. Bangladesh has abundant solar resource availability and the Project can assist Bangladesh in growing its power capacity with renewable sources to cover the rapid growing energy demand.

Why do we fund this investment?

Bangladesh has a fast-growing demand for power which has largely been served with thermal power. By funding this project, FMO can enable direct economic growth during the construction and operations of the Project and indirect growth by providing reliable electricity supply. The funding touches some of FMO’s key focus segments, Renewable Energy and Inclusive Development and allows FMO to build out renewable energy capacity in a market which today is still dominated by thermal power plants. Under its Power System Master Plan 2016, Bangladesh aims to add 2,000 MW renewable energy projects by 2021 and has been working on creating an enabling environment for potential investors and lenders to invest in the sector. Completing this project would be a step towards these ambitious goals. The Project is expected to generate an average of 86 GWh of electricity annually.

What is the Environmental and Social categorization rationale?

The E&S risk of the transaction has been classified as category A. The main E&S impacts and risks relate to economic displacement of current subsistence agricultural land-users and to labour conditions and safety during construction. The transaction will be managed in accordance with IFC Performance Standard 1,2,3, 4, 5 and 6. Performance Standard 7 is not triggered because there are no impacts on indigenous peoples. Performance Standard 8 is not triggered beyond the standard chance find procedure requirement. A, ESIA, a Stakeholder Engagement Plan and a Livelihood Restoration Plan in accordance with IFC Performance Standards will be completed by an international E&S consultant. Detailed environmental and social development plans are being developed, dedicated community liaison capacity is in place and to be extended with additional EHS management staffing.