ACWA Sunrise Al Mafraq Solar PV
Translated version of this PSD: Arabic
Project Description
The EBRD is considering providing a senior secured loan of up to USD 26 million to finance the construction of a 50 MW solar photovoltaic plant located within the King Hussein Bin Talal Development Area near the city of Al Mafraq in Mafraq Governorate, 80 km north of Amman in Jordan. The Project will be one of the first utility-scale solar plants of this size in Jordan and will support the country in increasing its renewable energy capacity and reducing its reliance on costly hydrocarbon imports.
Project Objectives
Project rationale stems from Jordan’s strategy to procure cost-effective, indigenous energy supplies to mitigate its energy crisis. As part of the government’s second round of direct proposals for solar (“Round 2”), the Project represents an important part of its ambitious programme to generate 10% of Jordan’s electricity demand from renewables by 2020.
Transition Impact
The Project will assist Jordan in diversifying its power sector which is heavily focused on thermal power generation. It will increase the generation of energy through indigenous renewable sources and will be developed to comply with EBRD’s E&S Policy 2014, which requires Projects to meet EU environmental standards.
The Project marks the transition from a feed-in tariff model (Round 1 of government-run direct proposals process) to a tender process in which the tariff is set competitively (Round 2). Consequently, the Project will be one of the cheapest sources of electricity of any kind in Jordan and the wider region. The successful implementation of Round 2 will demonstrate the benefits of using a competitive process and will establish this as the model for future rounds.
Client Information
SUNRISE SOLAR ENERGY PSC
The Borrower will be a special purpose vehicle to be incorporated in Jordan for the sole purpose of developing, constructing and operating the Project. The Borrower will be ultimately owned by International Company for Water and Power Projects (ACWA Power), one of the Middle East leading power and water players with more than 7.6 GW of operational power assets owned, 9.2 GW under construction, and 5.9 GW in advanced development.
EBRD Finance Summary
USD 26,100,000.00
Up to USD 26.1 million senior secured loan, alongside parallel or syndicated facilities of the same amount.
Total Project Cost
USD 70,600,000.00
USD 70 million.
Environmental and Social Summary
Category B. The 50MW solar PV plant is located in the KHBTDA industrial zone, adjacent to several houses to the north. The closest conservation site, an Important Birds Area, is in 7 km to the south of the site. The archaeological authorities confirmed that the plant does not impact any designated cultural heritage monuments areas. The Project has been subject to a Jordanian Environmental and Social Impact Assessment (ESIA) that is currently going through the permit approval process issue by the Competent Authorities.
The Project was categorised B (ESP 2014) following an Initial Environmental and Social Examination in April 2016 by the Bank’s environmental expert, and the scope of the Environmental and Social Due Diligence (ESDD) was determined accordingly. An independent consultant is contracted to carry out the ESDD of the Project under the guidance of the Bank. The ESDD focuses on such issues as dust emissions, water use and wastewater management, visual impacts, land acquisition, employment opportunities, cultural heritage, occupational and community safety, raw materials sustainability and supply chain issues, as well as any cumulative impacts and associated infrastructure issues. ESDD assesses social investment needs of the local community and required stakeholder engagement, and based on this will recommend a specific Corporate Social Responsibility (CSR) programme and Stakeholder Engagement Plan (SEP). The ESDD will confirm the Project’s compliance with the Bank’s Environmental and Social Policy and the relevant Performance Requirements, and would prepare a specific Environmental and Social Action Plan to address any gaps identified. The ESDD is estimated to be completed by June 2016, and the PSD will be updated to present the ESDD outcomes.
