Project detail - Scatec Solar Chigirin BV

Who is our customer

Scatec Solar is a Norwegian based integrated independent solar energy provider that delivers affordable, rapidly deployable and sustainable energy worldwide. A long term player, Scatec Solar develops, builds, owns, operates and maintains solar power plants. Scatec has an established global presence in growth markets in the America’s, Africa and Asia. FMO invests through Scatec Solar BV, which is a Dutch holding company providing equity funding to various greenfield PV solar projects in Ukraine. FMO will be a minority shareholder.

What is our funding objective?

FMO’s funding will be solely used to develop, construct and operate solar energy projects in the Ukraine, one of the core markets of Scatec Solar. The first tranche of FMO’s investment has been used to (indirectly) fund a 30MW solar PV project in the Cherkasy region in Ukraine. Subsequent tranches of FMO funding will be deployed on another solar PV project under development by Scatec Solar in Ukraine.

Why do we fund this investment?

With this investment dedicated to solar energy in the Ukraine, FMO will accelerate sustainable changes in the energy landscape. Currently, the energy landscape is dominated by old carbon-heavy thermal power (pre-dominantly coal fired) and nuclear power, to be replaced by clean low-carbon electricity, in line with the strategy of the Ukraine government. FMO’s additionality lies in filling the funding gap on the equity side: only very few (international) investors are open to investing in Ukraine since the turmoil in 2014. FMO can maximize its impact by investing in multiple solar PV projects and can catalyse international investments in Ukraine. In addition, the assets are expected to generate a substantive amount of local labour opportunities during construction, and limited opportunities during O&M.

What is the Environmental and Social categorization rationale?

The E&S categorization is Category B+ : the underlying assets (PV solar projects) are deemed to render limited and few adverse E&S risks and/or impacts that generally site-specific and largely reversible. These include possible brownfield site remediation; visual nuisance for local communities and tourism (regions being opened for tourism related developments); contextual risks (fuelled by political dynamics); and compensation for land users (like for like). It is expected that E&S risks can be readily addressed through the Scatec ESMS –on track for ISO14001 certification– as well as their broad project experiences, plus their willingness to show alignment with Good International Industry Practices (GIIP) regarding Health, Safety, Social, Security and Environmental risks and impacts. Scatec has thereby committed to install dedicated HSE managers and Community Liaison Officers per project and organize ongoing engagement with communities that will also cover dedicated community investment programs per project. Finally, FMO will seek opportunities to cooperate with Scatec in terms of capacity and community development.