ICONIC Project Finance (DXB) advised the Government of Mongolia in connection with the US$ 120m project financing of the 55 MW Sainshand Shalkhin Park (SSP) wind farm development in the Gobi desert. The project has been shaped in consultation with the local communities and a detailed environmental impact assessment has been approved by the national authorities. Financing has been agreed following preparation of a comprehensive environmental and social management system compliant with international standards.
The lenders have agreed to provide a total project financing of USD 78.5 million, which comprises EIB funding of USD 47m, of which the first tranche will be guaranteed by EKF, Denmark’s Export Credit Agency, with NORD/LB acting as agent; and EBRD funding of USD 31.5m. Once operational, the new Sainshand wind farm will make a significant contribution to reducing Mongolia’s carbon emissions and cater for an expected increase in power demand in the country. The scheme will significantly enlarge Mongolia’s renewable energy capacity and help the government to achieve the goal of renewable energy accounting for 20 per cent of all power by 2020, and 30 per cent by 2030.
The ICONIC PFA team was led by Global Project, Energy and Infrastructure Finance partners Jonathan Bartfeld and Dan Clarkson and associates Antonios Vardakastanis, Maria Strelnikova and Anwar Uruz.
Mr. Bartfeld said: “We are very pleased to have advised one of the largest wind power generation platforms in Mongolia. Establishing a private wind farm is a complex matter. Financing requires close cooperation between a number of financial partners and the ability to cover both the country-specific and the project-specific risks. I am pleased that we have managed to successfully close the transaction with the European Investment Bank and the European Bank for Reconstruction and Development.”
Mr. Bartfeld added: “ICONIC PFA is extremely active in the regional renewable energy space and we are thrilled to support the Mongolian Government on this successful and very large transaction.”
The $120m project —located 460 km south-east of Ulaanbaatar nearby the Sainshand City— is expected to produce an estimated 190,000MWh of electricity annually. The Sainshand wind farm will be built by China Machinery Engineering Corporation (CMEC) as the engineering, procurement and construction (EPC) contractor, and will use 25 Vestas V110 2.2 MW turbines to deliver up to 55 MW of clean energy that will save an estimated 200,000 tonnes of carbon emissions. Construction at the site is expected to be completed before the end of 2018. ENGIE, Ferrostaal, Danish Climate Investment Fund (DCIF), and Mongolian entepreneur Radnaabazar Davaanyam are the main actors to develop the wind farm.
In recent months, ICONIC PFA has advised on billions of dollars of renewable energy transactions across the globe, including a wide range of solar and wind projects in Chile, Mexico, Colombia. Peru and Brazil. These transactions include M&A portfolios (buy-side and sell-side), as well as capital markets (144A), US private placements, commercial bank and direct lender portfolios.
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