EBRD Board of Directors approves framework for energy of the future
As Kazakhstan prepares to celebrate the 25th anniversary of its independence, the European Bank for Reconstruction and Development (EBRD) is boosting its support for renewable energy, which will increasingly power its future.
The EBRD Board of Directors has approved a financing framework of up to €200 million. This will be used to finance primarily private renewable energy projects with a total generating capacity of 300 MW within the next five years. Such projects can be in wind or solar power, small hydro plants or biogas. The construction of generating capacity will be allocated €160 million, while €40 million will be allotted to electricity grid modernisation, which is necessary in order to integrate these renewable projects into the national transmission system.
Significant co-financing for the same projects will be considered by the Clean Technology Fund, the Green Climate Fund and other international financial institutions and commercial financiers.
Once all the projects come on-stream, annual CO2 emissions are expected to reduce by about 600,000 tonnes, which would help the country to achieve its commitments to cut emissions under the Paris climate agreement. New renewable energy generators can also substitute some of the carbon-intensive power generation in the north of the country and reduce the power deficit in the southern regions of Kazakhstan.
The EBRD has already financed renewable energy projects in Kazakhstan, including Burnoye Solar and the Yereymentau wind farm. The Bank also participated in the Shardara hydropower plant rehabilitation.
The Bank will work with foreign and domestic developers of renewables in Kazakhstan.
Aida Sitdikova, EBRD Director for Energy and Natural Resources in Russia, Caucasus and Central Asia, said: “The Bank is highly committed to its Green Economy Transition approach in general, and to supporting Kazakhstan’s national strategy of green economy in particular. The new framework will be a big step towards meeting Kazakhstan’s commitments to reduce greenhouse gas emissions under the Paris climate agreement. With this financing we are hoping to help establish the market of private developers of renewable energy projects in Kazakhstan.”
Janet Heckman, EBRD Director for Kazakhstan, added: “The work of the EBRD in this critical sector was recognised by the Ministry of Energy with a Certificate of Appreciation awarded to the Bank as part of national celebrations of 25 years of independence. The EBRD is proud to be the leading international promoter of clean energy in Kazakhstan.”
The EBRD is the largest renewable energy financier in its region. To date, the Bank has invested close to €5 billion in renewable energy – more than it has invested in conventional energy generation – and has produced over 4 GW of generating capacity. The Bank provides not only financing but also policy engagement, working with governments to introduce legislative and regulatory frameworks to enable the development of renewables.
In Kazakhstan the EBRD has also worked extensively with the government to help develop renewable energy legislation and feed-in tariffs. Under the new framework the EBRD will continue policy engagement with the authorities and the industry to help the Kazakh economy lessen its dependence on coal-generated electricity by attracting private developers to build renewable energy generators. Individual projects will also aim to provide more skills training and career opportunities for women who are currently under-represented in the sector.
To date, the EBRD has invested over €7.2 billion in Kazakhstan’s economy, beating investment records in the last three years. The EBRD is the largest international investor in the country’s economy outside of the oil and gas sectors.