Project detail - Genneia S.A.

Who is our customer

Genneia S.A. (FMO existing client) is an Argentinian-based renewable energy generation company that holds approximately 20% of the country's installed renewable energy capacity as of December 2021, making Genneia a leader in the renewable energy sector in Argentina. The company is involved in the entire cycle of power generation: from prospection and development to the construction and operation of renewable and conventional power plants. Genneia is a pioneer in promoting renewable energy in Argentina.

What is our funding objective?

The transaction is a corporate loan (A-loan), and the proceeds will be used to finance part of the construction cost of TOCOTA III, a 60 MW PV solar project in the province of San Juan and La ELBITA I&II, a 140 MW wind project in the province of Buenos Aires.

Why do we fund this investment?

This transaction will be used to support Genneia’s expansion of renewable energy projects (specifically TOCOTA III and LA ELBITA) which is aligned with FMO’s energy sector strategy. Hence, this transaction received a Green Label. FMO’s additionality is apparent with the availability of long-term debt financing (10 years) which is scarce in Argentina.

What is the Environmental and Social categorization rationale?

FMO’s E&S Category for this transaction is B+. The categorization is based on the main risks of this wind projects (risks related to birds and bats) and solar projects (a chance of encountering pre-Hispanic archeological findings), general risks associated with land acquisition and occupational health and safety, and limited other risks related to the specific locations of the projects(scarcely populated, low ecological value areas, no protected areas close to the project sites). FMO’s environmental and social due diligence indicates that the investment will have impacts which can be managed in a manner consistent with the following IFC Performance Standards, in particular: 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 – Land Acquisition and Involuntary Resettlement, and PS 6 – Biodiversity Conservation and Sustainable Management of Living Natural Resources. PS 8 – Cultural Heritage is triggered for the Tocota III project, but the risk is considered low as studies did not identify cultural resources in the area. Based on FMO’s in-country experience and knowledge, IFC PS 7 – Indigenous Peoples is not considered applicable. Plans and mitigants have been put in place or are part of the Environmental and Social Action Plan (ESAP) to mitigate construction and operation risks.