Project detail - Sara Holdings

Who is our prospective customer?

Sustainable Asia Renewable Assets (“SARA”) is a greenfield renewable energy platform under the SUSI Asia Energy Transition Fund (“SAETF”), a fund that invests in renewable energy and energy efficiency solutions in Southeast Asia and that is managed by SUSI Partners (SUSI). FMO will co-invest alongside SAETF in order to build a renewable energy company, active mainly in Vietnam and the Philippines.

What is our funding objective?

SARA will focus on ready-to-build utility-scale wind and solar assets in Vietnam and the Philippines. The aim is to create an operational portfolio of 200-300MW in the coming years. FMO’s capital will mainly be used to fund the equity needed to construct these projects.

Why do we want to fund this investment?

SARA will provide clean energy to the grid in countries with a need for additional power and a diversification of their energy matrix. Investments will support the reduction of CO2 emissions in Southeast Asia by reducing the reliance on fossil fuel-based sources of power. The investment will be fully green as it involves the financing of wind and solar energy generation. SARA is committed to sustainable development and to ensure that the environment and society at large benefit from their projects and to assure that potential biodiversity impacts are systematically assessed and mitigated.

What is the Environmental and Social categorization rationale?

This is an E&S Category A fund given the range of potential impacts associated with the construction and operation of solar and wind farms, particularly related to changes in land use and potential subsequent consequences on people and environment. In general, all wind and farm construction and operation plans trigger IFC PS (Performance Standards) 1 to 4, however they have the potential to trigger PS5 to 8 given potential impacts on land use and habitat disruption. In the specific case of wind power, there is a focus on potential impacts to bird and bat mortality, noise and visual disturbances for local communities, and significant land-use change with turbine installations. The dimension and severity of these impacts will depend on the characteristics of the site and surrounding area. This is compounded by the land complexity context of the Philippines and Vietnam which can exacerbate social risks and impacts. SARA will implement an Environmental and Social Management System (ESMS) that will focus on three areas: 1) screen and evaluate potential impacts and risks for decision-making; 2) ensure that environmental and social risks are effectively managed and minimized as per the IFC PS and local legislation during construction, and 3) operation. Given SUSI’s good E&S performance track record, FMO expects the same level of attention and scrutiny on E&S for SARA. Current pipeline shows exposure to IFC PS 1 (EMSS), 2 (Labor), 3 (Pollution), 4 (Community Health and Safety) as well as PS 8 (Cultural Heritage). Note that all investments will be managed in accordance with the IFC PS, with any gaps being covered by an Environmental & Social Action Plan to be implemented.