Narrative
Full Description
Project narrative
On August 2, 2022, Siyuan Investment Co., Ltd. and VE Ivovik D.o.o. Sarajevo — a special purpose vehicle and joint venture of Sinohydro (Hong Kong) Holding Limited (51% ownership stake), CNTIC Capital (39% ownership stake), and Ekrem Nanic (10% ownership stake) — signed a Sinosure-backed loan agreement for the 84MW Ivovik Wind Farm Project. The borrowing terms of the loan are unknown. The borrower is expected to use the proceeds of the loan to partially finance a commercial contract between the Government of Bosnia and Herzegovina and CNTIC and PowerChina, which was signed on December 16, 2021. Then, on September 15, 2022, Sinohydro (Hong Kong) Holding Ltd. sold its 51% ownership stake in VE Ivovik D.o.o. Sarajevo to Luxembourg-based Ivovik (Luxembourg) Wind Power S.à rl. Financial close was achieved on October 26, 2022. The purpose of the project was to establish an 84MW wind power farm — with twenty GW136-4.2MW wind turbines — at Livno and Tomislavgrad. A formal groundbreaking ceremony took place on December 16, 2021. However, construction did not commence until July 2022. The 800-ton main hoisting equipment for the Ivovik wind farm was shipped from the Port of Shanghai on August 15, 2022. The first wind turbine was installed on October 27, 2022. Then, on December 30, 2022, a grid connection agreement was signed. All 20 turbines were installed as of September 11, 2023. The Ivovik Wind Farm was officially connected to the national grid on October 17, 2024, marking the beginning of full production operations. With an estimated annual generation capacity of 259 GWh, it is the largest wind farm in Bosnia and Herzegovina and is expected to save 240,000 tons of coal per year. The project was originally expected to reach completion within 18 months (December 2023). There has been some controversy surrounding the 84MW Ivovik Wind Farm Project. The main concern involves a dispute over land ownership, with the government of the canton -- the administrative units that make up roughly half of Bosnia -- granting land to Chinese companies under questionable and possibly illegal circumstances.
Staff comments
1. The Chinese project title is 波黑伊沃维克风电项目 or 波黑伊沃维克（Ivovik）84MW. 2. Sinohydro (Hong Kong) Holding Ltd. is a unit of China's Powerchina Resources. 3. The precise face value of the loan is unknown. However, given that the EUR 133 million Ivovik Wind Farm Project Project is being implemented and financed as as independent power project (IPP) and IPPs are often financed according to a 75:25 debt-to-equity ratio, AidData assumes for the time being that the face value of the loan is worth approximately 75% of EUR 133 million (EUR 99.75 million). 4. On March 29, 2022, Sinosure opened a domestic guarantee with DBS Bank Hong Kong Branch to support China National Technology Import and Export Group Co., Ltd.'s investment into the Ivovik Wind Farm Project. This is the first guaranteed green loan of SINSOURE, which means that the loan agreement of this project is subject to the Green Loan Principles jointly issued by the Loan Market Association and the Asia-Pacific Loan Market Association in February 2021. 4. Siyuan Investment Co.,Ltd. was established in 2019 and given responsibility for the management of two medium-and long-term investment funds: China-Africa Fund (CAFIC) for Industrial Cooperation and China-LAC Industrial Cooperation Investment Fund (CLAI Fund). CAFIC is jointly funded by China’s foreign exchange reserves and the Export-Import Bank of China, with the aim of supporting projects that could promote China-Africa cooperation, improving the wellbeing of African people and facilitating Chinese and African economic development. Since its establishment, CAFIC has actively invested in projects of different sectors and explored new ways to expand industrial cooperation between China and Africa, giving financial support to a group of exemplary projects in areas such as resources and energy, manufacturing and communications equipment. CLAI Fund is jointly funded by China’s foreign exchange reserves and China Development Bank. CLAI Fund targets the Latin America and the Caribbean region, aiming to support China’s competitive industries to meet the demand of LAC countries and enhance China-LAC capacity and equipment manufacturing cooperation. The fund has invested in projects in areas such as clean energy, infrastructure and mining.