The International Finance Corporation (IFC), part of the World Bank Group, has decided to provide a loan of EUR 70 million for the construction of a 120 MW wind farm in the Odesa region, with a total cost of EUR 231 million.
“IFC is supporting the project during the pre-investment phase with the aim of enhancing its financial viability, particularly in terms of electricity market analysis and power purchase agreements,” the corporation stated on its website.
The project is expected to receive support from partners in the Economic Resilience Action Programme for Ukraine (‘ERA Programme’), notably the Norwegian Agency for Development Cooperation (‘NORAD’), the Government of the French Republic and the European Commission under the Ukraine Investment Programme (EC-UIF), as indicated in the ‘blended finance’ section
As stated by the corporation, the project is being implemented by a specialised company registered in Ukraine.
At the same time, according to the IFC, the project is predominantly owned by the German company Notus Energy GmbH, which has over 1.6 GW of wind power capacity worldwide. The project’s shareholder structure also includes minority shareholders in the form of Horizon Capital, a private investment company operating in Ukraine and Moldova, through its recently established Catalyst Fund and Green for Growth Fund.
As explained by the IFC, the additional benefits of the corporation’s participation in this project are both financial and non-financial in nature. In particular, the financial value stems from the financing structure, as the IFC is providing a loan with a maturity of up to 17 years. The IFC will also help to attract additional financing for the project.
“The non-financial value lies in the reduction of non-commercial risks, as the IFC’s involvement is expected to boost investor confidence in a challenging market,” the organisation noted.
IFC is also providing technical support to help the project enhance its financial attractiveness, particularly in terms of market analysis and power purchase agreements.
Horizon Capital manages six private equity funds (with over 40 institutional investors) with assets of $1.6 billion, including WNISEF (with capital of $150 million), the Emerging Europe Growth Fund (EEGF, $132 million), EEGF II ($370 million), EEGF III ($200 million), HCGF II ($258.3 million) and HCGF IV ($350 million). The funds have invested in 191 companies, which employ over 80,000 people in Ukraine and Moldova.
As previously reported, on 17 June the European Bank for Reconstruction and Development (EBRD) also approved a decision to provide a loan of up to EUR65 million for the construction of the aforementioned 120 MW wind farm in the Odesa region.