Baikonyr signs deal to get funding for solar power plant in Kazakhstan

Solar power loan is first provided by ADB for such a project in Central Asia, intended to design and built 50-megawatt solar power plant as well as necessary infrastructure

The Asian Development Bank (ADB) signed a US$11.5 million loan in tenge (Kazakhstan currency) equivalent on March 4 with Baikonyr Solar Limited Liability Partnership (Baikonyr Solar LLP) to support the development of solar power in Kazakhstan and further enhance the country’s energy security through increased renewable sources.

The loan agreement for the Baikonyr Solar Power Project is the first time that long-term local currency financing has been provided by ADB for a solar project in Central Asia. It also marks ADB’s first foray in solar energy financing in the subregion, and its first cofinancing with the European Bank for Reconstruction and Development in Kazakhstan’s renewable energy sector.

“Kazakhstan’s energy sector has mostly relied on coal with almost 80% of the country’s electricity generated from coal-fired power plants, which are mostly outdated and obsolete,” said ADB Senior Investment Specialist for Private Sector Operations Mohammed Azim Hashimi. “ADB’s loan to Baikonyr will help Kazakhstan achieve its goal of increasing the share of renewable energy in the country to 50% by 2050, while reducing its carbon emissions.”

The project comprises the design, construction, commissioning, operation, and maintenance of a 50-megawatt solar power plant, along with the necessary infrastructure for grid integration. The solar plant—which is expected to generate 73 gigawatt-hours of electricity per year and will include approximately 150,822 photovoltaic panels, 14 central invertor stations, and a substation—will be located in southern Kazakhstan over 150 hectares of land.

Baikonyr Solar LLP is a special purpose vehicle incorporated in Kazakhstan and is owned by UG Energy Limited and Baiterek Venture Fund Joint Stock Company (BVF), which is a subsidiary of Kazakh sovereign wealth fund Baiterek JSC. United Kingdom-based UG Energy Limited has been pioneering the development of industrial-scale solar plants in Kazakhstan.

By cutting carbon emissions, the project will help the country fulfill its nationally determined contribution to the Paris climate agreement of a 15% decrease in carbon emissions below 1990 levels by 2030. ADB’s assistance further helps private sector engagement in the energy sector, while the construction and operation of the solar plant is expected to generate employment for the local population.

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Date

6 Mar 2019

Channel

Capital Markets

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