Project detail - DESERT SOLAR POWER ONE LLC

Who is our customer?

Desert Solar Power One LLC (the Company) is a special purpose limited liability company incorporated in Mongolia for the sole purpose of developing, constructing and operating the Project. The Company is ultimately owned by United Green Group, a group of companies involved in a range of activities including renewable energy projects, and the Tucher Group GmbH.

What is our funding objective?

A limited recourse senior secured A/B loan of up to USD 30.7 million (FMO share will be USD 10.2mln) to Desert Solar Power One LLC to support the development, construction and operation of a 30MW solar photovoltaic power plant to be located approximately 450km to the south east of Ulaanbaatar in the Gobi desert (the "Project").

Why do we fund this investment?

The intended transaction will contribute to reducing Mongolia's carbon intensity, meeting its increasing power demand and achieving the Mongolian strategic goal of renewable energy accounting for 20 % of all power by 2020, and 30 % by 2030. It will also increase the private share of generation, in a sector still largely state-dominated.

What is the Environmental and Social categorization rationale?

Category B+ Impacts associated with the 30MW Solar PV Plant are considered to be site specific and readily addressed through on-site mitigation and management. The project will not impact any sensitive areas (including biodiversity and/or cultural heritage) and will not result in any land acquisition and/or resettlement. An Environmental and Social Action Plan has been agreed with the Client and includes but is not limited to: (i) development and implementation of construction Environmental and Social Management Plans (ESMPs), (ii) requirement for pre-construction biodiversity surveys within the project footprint / transmission line corridor to refine, where necessary, proposed mitigation measures included in the national Environmental Impact Assessment (DEIA), (iii) development and implementation of a Chance Find procedure, should any objects of cultural heritage significance be identified during construction and (iv) update and implement Stakeholder Engagement Plan (SEP) during construction and operations. The Client has also committed to providing Lenders with regular reports during construction /operations to demonstrate compliance with project standards and its ESAP requirements. The following Performance Standards are triggered by the transaction: PS 1 Assessment and Management of Environmental and Social Risks and Impacts PS 2 Labor and Working Conditions PS 3 Resource Efficiency and Pollution Prevention PS 4 Community Health, Safety and Security PS 5 is not triggered as land acquisition for the project does not cause any physical or economic displacement PS 6 is not triggered as no Biodiversity Conservation and Sustainable Management of Living Natural Resources were identified. PS 7 is not triggered because no impacts on local groups qualifying as Indigenous were identified. PS 8 is not triggered, as no cultural objects or places were identified.