The European Bank for Reconstruction and Development (EBRD) has pledged funding for a new solar project in Kazakhstan, marking its fifth investment in the country’s clean energy sector.
In a statement on May 17, the EU financier said it had banded together with the Manila-based Asian Development Bank (ADB) and the World Bank’s Clean Technology Fund (CTF) to support the construction of a 50-MW photovoltaic (PV) plant in Baikonur, central Kazakhstan. The EBRD and ADB will issue loans in Kazakh tenge worth US$30 million and US$12 million respectively, while the CTF will release a loan of US$10.4 million, denominated in US dollars and euros.
The funding will be provided to Baikonur Solar, a 100% subsidiary of London-based renewables developer United Green Group (UGG). UGG was also involved in building Kazakhstan’s first PV station, Burnoye Solar, and is currently working on an expansion that will double its capacity to 100 MW.
The EBRD bankrolled both stages of Burnoye Solar’s development. It also assisted Astana in crafting clean energy legislation adopted in 2013, as well as introducing a feed-in tariff (FiT) mechanism the following year.
In November 2014, the bank provided financing to Kazakhstan’s first wind farm, the 50-MW Yereymentau station in the north of the country. And earlier this year, it lent 12 billion tenge (US$37 million) to fund an overhaul of the power network in Kazakhstan’s western Mangistau region. The project should help facilitate the connection of clean energy projects to the national grid. To date, the EBRD has invested over US$8.7 billion in the Kazakh economy.
The Baikonur solar plant is expected to slash Kazakhstan’s annual CO2 emissions by 75,000 tonnes. Under the project, a new substation will also be built in the southern Kyzylorda region.
The EBRD is also backing a UGG development in nearby Mongolia. It has teamed up with the Netherlands’ Triodos Investment Management and FMO Dutch Development Bank to provide three loans of US$10.5 million each towards the construction of a 30-MW solar plant in the Gobi Desert, 450 km southeast of the Mongolian capital of Ulaanbaatar. UGG is working on the project with Germany’s Tucher Group.