ICBC provides $37 million loan for 72MW Kiyikoy Wind Farm Expansion Project

In January 2020, the European Bank for Reconstruction and Development (EBRD) and Alenka Enerji Üretim ve Yatırım A.S. — a special purpose vehicle (project company) and wholly-owned subsidiary of Borusan EnBW Enerji — signed a $37 million loan agreement for the 72MW Kiyikoy Wind Power Plant (WPP) Expansion Project. In parallel, the borrower signed a $37 million loan agreement with Industrial and Commercial Bank of China (ICBC) Turkey for the same project. These loans reportedly carried 12-year maturities and unknown interest rates. The purpose of the $101 million project is the development, construction and operation of a 72-megawatt (MW) expansion of the 28MW Kiyikoy (Kıyıköy) wind farm (power plant) located on the west coast of the Black Sea in the Kirklareli province. The extension of the wind farm is expected to offset about 99,700 tons of CO2 emissions annually. The borrower is also expected to use the proceeds of the EBRD and IBRD loans to refinance a leasing facility provided by a local leasing firm for the original wind farm. Vestas is serving as the the turbine supplier and O&M contractor. TEIAS Is serving as the system operator. Turkey’s Energy Market Regulatory Authority (EMRA) granted an Energy Generation License (“License”) to the Project on 4 April 2007 (“License Date”) on behalf of the Project Company. This License (License No: EU/1149-3/823) authorized the Project Company for electricity generation for 49 years (“License Duration”) starting from the License Date. The Project Description File (PDF) was prepared in line with the Environmental Impact Assessment (EIA) Regulation in force for the first phase of the Project (“existing Kiyikoy WPP Project”) with an installed capacity of 28 MWm/27 MWe provided by 18 turbines (each turbine with a capacity of 1.5 MW). An “EIA not Required” Decision was secured from the Kirklareli Provincial Directorate of Environment and Urbanization (the provincial organisation of the Ministry of Environment and Urbanization – MoEU) on 8 May 2009 (Decision No: 2009/07). Following the “EIA not Required” Decision, the site wind measurements continued leading to the optimization of the Project design. The final design completed by the Project Company based on the optimization analyses included 14 turbines (2 MWm each) providing the same total installed capacity of 28 MWm/27 MWe. The Project Company applied to the MoEU and obtained an official letter on 2 May 2013 confirming that the "EIA not Required” Decision granted on 8 May 2009 is valid for the final design with 14 turbines (2 MWm each) as the total installed capacity of the Project has not changed. In August 2014, the existing Kiyikoy WPP Project started commercial operation. Following this, the potential for a capacity extension was assessed by the Project Company and it was concluded that the installed capacity of the WPP can be extended up to 100 MWm/99 MWe with the construction and operation of 201 additional turbines (3.6 MWm each) making a total of 34 turbines. The EIA Regulation in force required an EIA Report to be prepared for the Capacity Extension Project. The Project Company made an EIA application to the MoEU. Upon completion of the EIA process, the MoEU granted an “EIA Positive Decision” on 14 September 2017 (Decision No: 4763) to the Kiyikoy WPP Capacity Extension Project. The “EIA Positive Decision” has allowed the Company to increase the existing capacity of the Kiyikoy WPP from 28 MWm/27 MWe to 100 MWm/99 MWe. Following the “EIA Positive Decision”, the coordinates and/or codes of certain turbines have changed as a result of the Project development and ongoing license amendment process with the EMRA. The Project Company applied to the MoEU and obtained an official letter on 25 January 2019 confirming that the "EIA Positive Decision" granted for the Capacity Extension Project on 14 September 2017 is valid for the revised coordinates of the turbines and a total capacity of 100.45 MWm/99.45 MWe3. As of September 2019, pre-construction planning and final engineering studies were ongoing for the 72MW Kiyikoy Wind Farm Expansion Project and the 72MW Kiyikoy Wind Farm Expansion Project was expected to reach its commercial operations date (COD) in October 2020. Given its sensitive location and the potential for significant environmental impacts, the project was subject to an Environmental and Social Impact Assessment (ESIA) and disclosure of an ESIA disclosure package on 9 October 2019 following review and appraisal undertaken by the EBRD and an independent consultant. The disclosure package consists of an ESIA, Non-Technical Summary, Stakeholder Engagement Plan (SEP), Biodiversity Action Plan, Livelihood Restoration Plan and an ESAP. Public hearings were undertaken in late November 2019. The first stage of the wind farm commenced in 2007 with a 28 MWe wind farm put into operation in 2014. Planning for the extension commenced in 2014 and a national EIA was undertaken for a 100 MWe capacity wind farm (first stage plus extension). This was approved and permitted by the competent authorities in 2017. The existing wind farm and the 72MW Kiyikoy Wind Farm Expansion Project was acquired by the project sponsor in December 2017, who undertook additional biodiversity studies in 2018. The wind farm and the 72MW Kiyikoy Wind Farm Expansion Project are located within the boundaries of the Istranca Mountains Key Biodiversity Area (KBA) and located on the Via Pontica bird migration flyway, along the west coast of the Black Sea. Igneada Forests and Terkos Basin Important Bird Areas (IBA) are located near the site. The wind farm and the Project are not located within the IBAs. The most abundant migratory birds are white stork, common buzzards and European honey-Buzzard (all Least Concern species as per IUCN threat classification) and the migration is concentrated in the spring season. The 72MW Kiyikoy Wind Farm Expansion Project site is located in a forestry area, away from main residential areas (one house is located nearby) and near to the right of way of the TurkStream gas pipeline. Given the sensitivity of the project site, the EBRD retained an independent consultant to undertake Environmental and Social Due Diligence (ESDD) of the project and to work with the project sponsor and its consultants to develop an ESIA disclosure package in line with the EBRD’s Performance Requirements (PRs). The ESDD identified the need for a Critical Habitat assessment in line with Performance Requirement 6 and need for additional biodiversity studies, notably as the historic data did not allow for a full bird risk collision assessment or a review of impacts on bats in line with EUROBAT guidance and good industry practice. Additional biodiversity surveys were undertaken starting from the end of 2018 throughout 2019 to take account of the spring and autumn migration periods. This has included bird and bat activity surveys of the project and wind farm as well as carcass surveys in the existing wind farm area. The results of the surveys and assessment are included in the ESIA disclosure package together with an update disclosed in December 2019, which considers the results of additional surveys. The assessment has concluded that despite the location of the project within the Via Pontica migratory flyway, the project site itself is not Critical Habitat for these migrating birds. Considering the importance of the flyway, however, the EBRD identified a need to achieve a no net loss of biodiversity. The assessment has determined that the Project and existing wind farm present a low risk to migrating birds. This risk will be further mitigated to achieve no net loss through turbine shut down on-demand, which will be optimized through monitoring in 2020. The assessment identified a potentially significant collision risk to bats in the project area. Carcass surveys within existing wind farm demonstrated high levels of bat mortality from collisions and the assessment determined that the site is Critical Habitat for various bat species. Collision risks to bats will be mitigated through setting increased turbine cut in speeds (the wind speed at which the turbines blades commence rotation) to 5m/s during the period April to October. In the first instance this will scheduled to apply beginning in April 2020 to 10 of the existing, higher risk, turbines with cut in speeds and affected turbines revised through monitoring of bat activity and bat mortality in 2020 and agreed with the project company by the end of 2020. Project turbine cut in speeds will be informed by monitoring of bat activity and bat mortality during 2020 and 2021 and agreed with the project company by the end of 2021. The project company is further considering bat deterrent systems based upon the applicability of the available technology to the site. Through these measures, a net gain in bat populations compared to the current baseline is expected. All mitigation, management and monitoring measures are captured in a Biodiversity Action Plan (BAP), which also extends to flora. The measures will be refined as more baseline data are gathered to ensure that impacts are avoided and minimized and a no net loss of priority biodiversity, and net gains for critical habitat, is achieved. Monitoring will continue and will further inform the need for additional conservation actions for bats. The project is not expected to be associated with any physical displacement and a livelihood restoration plan has been developed and disclosed to address impacts on local land use and livelihoods. The ESIA indicated there is no significant noise, shadow flicker or visual impacts on the wider area with potential impacts locally on the residential household located near turbine T15. Mitigation measures will be implemented to reduce these impacts and the project company has committed to developing a Resettlement Action Plan should the householder wish to re-locate during the construction or until the end of second year of operation period. The project company has and will continue to undertake additional stakeholder engagement as defined in the Stakeholder Engagement Plan (SEP), which is part of the disclosure package. In addition, the project company plans to undertake additional local community investments as part of its continued commitment to supporting local communities. An ESAP and a BAP have been agreed with the project sponsor and include, amongst others, continued monitoring of the project (including bird and bat monitoring and carcass surveys) and appointment of an independent bird and bat expert to help review monitoring data and implement the appropriate mitigation measures. The key mitigation measures include turbine shut down on-demand, increased turbine cut-in speeds as well as the implementation of good international practices and an environmental and social management system during construction and operation. Overall, through the implementation of the ESAP, the BAP and the measures and actions committed to in the ESIA, the 72MW Kiyikoy Wind Farm Expansion Project will be structured to meet the EBRD’s Performance Requirements. ESDD has confirmed that the project company has the institutional capacity to manage E&S issues associated with the 72MW Kiyikoy Wind Farm Expansion Project and fully implement the PRs. The EBRD will monitor the Project including review of annual and independent ornithological reports.

Additional details

1. This project is also known as the Kiyikoy WPP Extension Project and the 72MW Kiyikoy Wind Farm Expansion Project. 2. Borusan EnBW Enerji Yatirim ve Uretim A.S. was founded in 2007 by the family-owned Turkish conglomerate Borusan Holding to invest in the energy sector. In 2009, a partnership agreement was signed between Borusan Holding and the publicly owned German utility EnBW AG. Currently, the operational portfolio of the project sponsor consists of 8 WPPs (446 MW), 1 HPP (50 MW) and 2 SPPs (9 MW) which in total corresponds to 505MW installed capacity.

Number of official sources

5

Number of total sources

11