The European Bank for Reconstruction and Development (EBRD) and FMO, the Netherlands Development Finance Company, have agreed to provide a syndicated loan of up to €24.5m for the development of 30MW solar plant in Ukraine.
EBRD and FMO will each provide €12.25m for the solar plant, which will be located in the Cherkasy region of Ukraine. Operations at the solar farm are expected to begin in the fourth quarter of this year.
The project will be implemented by a Ukrainian special purpose vehicle fully-owned by the Norwegian solar developer Scatec Solar. For EBRD and FMO, this will be the first co-financing in the country in the renewables sector.
This is a non-recourse debt financing of the project and the credit facilities will cover 70% of the total project costs. On 21 December, Scatec Solar closed financing for the project with a total investment of €35m.
Scatec Solar will be the lead equity investor in the project and is in the process of securing additional equity partners for the project. It will also provide engineering, procurement and construction (EPC) services and will offer operation and maintenance as well as asset management services for the solar plant.
Construction on the solar power project is expected to begin in early 2019.
The Norwegian solar developer stated that Ukraine’s 10-year Feed-in-Tariff scheme will support the project.
The solar project will be EBRD’s second investment under its €250m Ukraine Sustainable Energy Lending Facility III (USELF III) framework approved by the Bank in July last year, following the signing of the first project in Mykolaiv earlier in December.
USELF III builds on two previous programmes co-financed by the EBRD and the Clean Technology Fund, which helped in the development of 14 renewable energy projects in the country, with an overall installed capacity of 158MW.
EBRD stated: “The EBRD is the largest international financial investor in Ukraine. Since the start of its operations in the country in 1993, the Bank has made a cumulative commitment of almost €12.1 billion across some 400 projects in Ukraine. Almost €1 billion was invested in 25 projects in Ukraine’s power sector.”