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The project will finance the construction of four solar photovoltaic plants (PV) totalling 395 MWp in Ireland.
Renewable power plants contribute to progress on the national and EU energy and climate goals, namely decarbonise electricity production in the EU and decrease the reliance on fossil fuels. The project is therefore eligible under Article 309 point (c) common interest.
The project concerns the development and operation of four solar PV plants in Ireland, with a total capacity of 395MWp. The project increases the renewable energy generation capacity in Ireland and contributes to national and EU 2030 climate objectives.
The financing of this project is in line with the Bank's lending priority objectives on Renewable Energy as well as on Climate Action and Environmental Sustainability.
The project produces electricity from low carbon sources (solar photovoltaic ("PV") plants), addressing the market failure of negative climate and environmental externalities, through the reduction of carbon emissions and other air pollution (compared to fossil-fuel generation).
The project's revenues will be supported through a two-sided contracts for differences support scheme (RESS-3 and RESS-4), with a merchant tail.
In terms of project results, the projects are expected to have a positive economic rate of return, considering the economic value of the electricity generated. Therefore, the project is expected to generate a positive broader social benefit by generating clean and renewable power at a cost (LCOE) reasonably below the cost alternatives in Ireland. The Project is expected to be supported by policies set in place by the promoter, who has adequate capacity in building such project and a good track record on renewable energy projects in Ireland.
The Bank will provide a meaningful part of the overall financing needs of the project through a senior debt facility to achieve construction and operation of the assets. The Bank provides expertise in structuring and lending to renewable energy projects, applying project finance principles well tested in other transactions. This will improve the structuring of the operation through close cooperation with the promoter and the commercial lenders.
Solar PV plants fall under the Annex II of the Environmental Impact Assessment (EIA) Directive 2014/52/EU (amending the EIA Directive 2011/92/EU), therefore leaving it to the competent authority to determine according to Annex III of the said Directive whether an Environmental Impact Assessment (EIA) is required. Given that China largely dominates the solar panel market, and media have reported the risk of child labour, enhanced due diligence will be applied in line with the EIB's Environmental & Social Standards. The project is expected to contribute to Climate Action and Environmental Sustainability objectives, in particular to climate change mitigation and pollution prevention and control.
The promoter is a private company and the schemes envisaged for this operation are market-based renewable energy projects, which do not enjoy any special or exclusive rights. Therefore, private sector procurement procedures should apply.