ICBC contributes to syndicated debt financing package for 500MW Dzhankeldy Wind Farm, 33-500kV Substation, 500kV Dzhankeldy-Bash and Dzhankeldy Western Plot-Eastern Plot Substations OHTL IPP Project

Project narrative

On March 29, 2023, ACWA Power Dzhankeldy Wind Limited Liability Company (or FE ACWA Power Dzhankeldy Wind LLC) — a special purpose vehicle and wholly-owned subsidiary of ACWA Power that is legally incorporated in Uzbekistan — signed a $430 million syndicated debt financing package (including A and B loans) with the Asian Development Bank (ADB), Bank of China (BOC), Industrial and Commercial Bank of China (ICBC), the European Bank for Reconstruction and Development (EBRD), Standard Charted Bank, the OPEC Fund for International Development Bank, Deutsche Investitions- und Entwicklungsgesellschaft mbH (DEG), and PROPARCO for the 500MW Dzhankeldy Wind Farm, 33-500kV Substation, 500kV Dzhankeldy-Bash and Dzhankeldy Western Plot-Eastern Plot Substations OHTL IPP Project. BOC contributed an estimated $68.25 million to the syndicate, while ICBC contributed an estimated $89.67 million to the syndicate. The borrower purchased credit insurance from the Multilateral Investment Guarantee Agency (MIGA). The total cost of the independent power project (IPP) was $658 million and it is being financed according to a debt-to-equity ratio of 65:35. The purpose of the project is to construct the 500MW Dzhankeldy wind farm in the Peshku district of Bukhara region. The wind farm is expected to consist of 79 wind turbine generators (WTGs), each with a capacity of 6.5 MW, a rotor diameter of 171 meters, and a hub height of 100 meters. The project scope also includes construction of a 128.5 km 500 kV overhead transmission line to connect the Dzhankeldy wind farm to Bash wind farm, the construction of a 120 km 500 kV single-circuit overhead transmission line for the Dzhankeldy wind farm’s connection to the grid at Sarimay substation, and the construction of common electrical facilities shared with Bash wind farm (switchyard with transformers, 500/220 kV pooling station). Once the wind farm is operational, it is expected to generate at least 1,577 GW-hours of electricity per annum and help avoid at least 879,907 tons of carbon dioxide equivalent per annum. ACWA Power has already entered into a 25-year, USD-indexed, Power Purchase Agreement (PPA) with National Electric Grid of Uzbekistan (NEGU). NEGU is expected to be the sole off-taker of the power generated by Dzhankeldy Wind Farm. The project site is located on two plots of land as follows: (1) the south eastern part of the Kyzyllum desert on the territory of the Kuldzhuktau mountain range, Peshku district of the Bukhara region; and (2) the western plot of the wind farm is located approximately 2.5km east of Dzhankeldy village and directly adjacent to the Kalaata village. The eastern plot of the wind farm islocated approximately 1.4km west of Dzhankeldy, 27km west of Ayakguzhumdy and approximately 92km west of Bukhara town. Both the western & eastern plot are approximately 47km north of Highway A380. The wind turbines will be sited within the allocated land where the wind resource is most reliable but the project siting has also taken account of environmental and social issues to ensure that impacts are prevented, minimized or mitigated in accordance with Uzbekistan laws and environmental standards and the E&S policies and safeguards of the international banks funding the project. The Engineering Procurement and Construction (EPC) contract for the project was awarded to China Energy International Group (CEEC), while First National Operation and Maintenance was selected as the operations and maintenance (O&M) company. In June 2023, renewable energy company Envision Energy announced that it would supply the turbines for the wind project. Capitals Environmental and Management Consulting (5 Capitals) acted as the lead E&S Consultant undertaking the independent Environmental Impact Assessment (EIA) and Environmental and Social Impact Assessment (ESIA) processes. MIGA prepared the Environmental and Social Review Summary (ESRS). ADB categorized the project in compliance with its Safeguard Policy Statement as follows: environment (category A), involuntary resettlement (category B), and indigenous peoples (category C). ADB also undertook due diligence and reviewed the potential environmental and social (E&S) impacts of the project and the measures to avoid, minimize, mitigate, and compensate for the adverse impacts in the safeguard reports and plans. The E&S measures and the borrower’s institutional capacity and commitment to manage E&S impacts were deemed adequate by ADB. The project’s groundbreaking ceremony on March 9, 2023 and it was originally scheduled to reach completion within 30.5 months (September 24, 2025).