EUR 107.6m finance deal inked for NBT-Total Eren co-sponsored Ukrainian wind farm

NBT AS, a utility-scale wind power developer based in Oslo and Total Eren SA, a leading renewable power producer based in Paris, have jointly signed financing agreements with major European financial institutions for the second phase of a 250 MW wind project located in the Kherson region of Ukraine.

This €107.6 million financing agreement was signed with a syndicate of development banks including Proparco, BSTDB, Finnfund, IFU and NEFCO. All in all, the financing put into place for the whole project reaches €262.6 million. AlGihaz, a Saudi Arabian conglomerate, recently took a minority stake in the project alongside Total Eren.

Currently under construction, the onshore Syvash wind farm (“Syvash”) has been jointly developed by Total Eren and NBT. Total Eren is pleased to welcome AlGihaz as co-investor along its side. At its full capacity, Syvash represents a €380 million total investment. Syvash will consist of 63 wind turbines and is located on 1,300 hectares of land in the southern Kherson region of Ukraine. Once built, it is expected to become the country’s largest renewable energy project.

It is the first international Financial Close ever achieved for a wind farm of that scale in Ukraine. The project was financed in two phases, for a total loan amount reaching €262.6 million:
 A loan of up to €155 million had been raised in January for the construction of the first 133 MW phase from a consortium led by European Bank for Reconstruction and Development (EBRD). EBRD’s loan consisted of €75 million, Green for Growth Fund (GGF) and the Netherlands Development Finance Company (FMO) provided €75 million, while a parallel loan of €5 million was provided by the Nordic Environment Finance Corporation (NEFCO).
 For the second phase, a €107.6 million loan was contracted from a group of development banks: Proparco provided €42.6 million, the Black Sea Trade and Development Bank (BSTDB) contributed €30 million, Finnfund allocated €15 million while The Danish Development Finance Institution (IFU) provided €15 million and NEFCO €5 million.

The Syvash wind farm is being built to very high international standards, conforming to EBRD Performance Standards and Equator Principles. The electricity generated from Syvash will be sold to state-owned company “Energorynok” – Ukraine’s wholesale electricity market operator. Once the full project is completed, it will have a planned production of 850 GWh per year, hence generating enough electricity to meet the needs of approximately 100,000 households. It is expected to reduce CO2 emissions by 470,000 tonnes per year, hence creating a positive impact on the environment.

The Engineering, Procurement and Construction (EPC) contract has been signed with PowerChina, one of the largest power plant construction companies worldwide, and Nordex Group, a leading producer of onshore wind turbines. The Syvash wind farm will bring economic development and significant tax revenues to the Kherson region and will have a lasting economic impact even after its construction is completed.

Syvash represents Total Eren and NBT’s first project in Ukraine, a country with high potential for renewable energy sources, combined with strong local support from the Ukrainian Government, the Office of the National Investment Council, regional authorities and other partners to develop the Ukrainian renewable energy market.

David Corchia, CEO of Total Eren, stated: “We are delighted to complete the first international Financial Close ever achieved for a wind farm of that scale in Ukraine. I want to thank our partners, NBT who initiated the project and AlGihaz who just joined us on board, along with the numerous leading financial institutions which are supporting us once again on a major project: EBRD, GGF, FMO, NEFCO, Proparco, BSTDB, Finnfund, and IFU. Syvash is the result of this joint endeavor and I would like to acknowledge the efforts of all those who made this large-scale project come true for the benefit of Kherson’s people and the whole region.”

We are thrilled to sign the project financing for the largest wind project in Ukraine with our partner Total Eren. We would like to thank our senior lenders for the support that they have given to us and to Ukraine. We are committed to making significant investments in more utility-scale wind farms that will power the sustainable future growth of Ukraine. The business climate in Ukraine continues to improve and there is growing investor interest in Ukraine. We are working hard with the Government of Ukraine and our strategic partners to make Syvash a tremendous success for all stakeholders and to expand our investment in our large pipeline of additional wind projects in Ukraine in the near future.

Joar Viken, CEO of NBT

AlGihaz is very pleased to enter the Syvash project which has been very carefully developed by Total Eren and NBT. We look forward to collaborating with our partners on this huge-scale project, which represents the first investment for AlGihaz in Ukraine.

Sami Alangari, Vice Chairman & CEO of AlGihaz

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