Project description
and objectives:

The EBRD is considering providing a €40 million loan to finance the construction and operation of a 60 MW wind farm located in the municipality of Suvorovo in the north-eastern part of Bulgaria about 25km inland from the Black Sea. The project will contribute to the expansion of renewable energy markets in Bulgaria supporting the country in achieving its target of sourcing 16% of its electricity consumed from renewable sources by 2020. It is expected to be operational in the second quarter of 2010.

Transition impact:

The transition impact of the project steams primarily from:
 The project has the potential to generate demonstration effects of a viable large-scale wind power generation facility financed on a non-recourse project financing basis. This could attract other potential investors and facilitate renewable energy development in Bulgaria and elsewhere under the current difficult market conditions;
 The project has the potential to set higher standards for business conduct through the application of international best practices in Environmental Impact Assessment for developing wind projects in Bulgaria.

The client:

Vetroenergien Park Suvorovo EOOD is a special purpose vehicle that is 100% owned by Eólica Bulgaria AD. Eólica Bulgaria is majority controlled by the renewable energy developer based in Spain, Grupo Empresarial Enhol, S.L. (“Enhol Group”). The project is being developed in partnership with Bulgaria’s Balkars Consortium (“BC”).

Enhol Group has extensive experience in full development of green-field wind power projects with 277MW (13 wind farms) commissioned in Spain between 1998 and 2007. The Group has a pipeline of approximately 1,700MW including 672MW in Central and Eastern European countries.

EBRD finance:

Long-term debt financing of up to €40 million. The project is expected to be financed along with 2 commercial banks.

Total project cost:

Estimated at approximately €100 million.

Environmental impact:

The construction and operation of a wind farm can be associated with a number of environmental and social issues that can be readily assessed as part of an environmental due diligence.

Following an Initial Environmental and Social Examination (IESE), the project has been screened B under the Bank’s Environmental and Social Policy 2008, requiring an Environmental and Social Due Diligence (ESDD). The project classification was based on the location of the site which is not in a sensitive environmental setting, therefore does not fall under Annex 1 of the Bank's Environmental Policy (2008) requirements.

ESDD will include a review of an Environmental Impact Assessment (EIA), Bird study and the associated 110KV transmission line connection by an independent consultancy as part of the environmental and social appraisal of the project by the Bank. As a result of the ESDD, an Environmental and Social Action Plan (ESAP) will be prepared in line with the Bank’s Performance Requirements (PRs) to address both the construction and operational phase of the project.

The Project Summary Document (PSD) will be updated once due diligence is completed and the Environmental and Social Action Plan has been agreed.
The Sponsor has undertaken an Environmental Impact Assessment (EIA) as required by Bulgarian environmental law and is in the process of obtaining relevant permits. The EIA was subject to Bulgarian public consultation requirements.

The project EIA and other related documents are available on the Sponsor’s website at http://www.grupoenhol.es

Technical
cooperation:

None.

For consultant opportunities for projects financed by technical cooperation funds, visit procurement of consultants.

Company contact:

Julia Saez Bea, Project Finance Director:
E-mail: jsaez@eolicanavarra.es