The European Bank for Reconstruction and Development (EBRD) is supporting Jordan’s wind power generation with a US$52mn loan for the construction and operation of a 45MW wind farm in the Shobak region.
The loan will be provided to Shobak Wind Energy, a firm majority-owned by UAE-based developer Alcazar Energy, which is developing the wind project together with US-based Hecate Energy.
EBRD’s loan is divided into an A loan of US$26mn provided on the bank’s own account, and a B loan of the same amount funded by the Europe Arab Bank. Alongside EBRD’s loan, the Islamic Corporation for the Development of the Private Sector (ICD) has provided a parallel Islamic finance tranche of US$26mn.
The Shobak wind farm, located 160km south of Amman, is the ninth renewable project that the EBRD is financing in Jordan, and the second wind farm to be financed by the bank under the first round of Jordan’s programme of private utility-scale wind projects.
With this loan, the EBRD says it aims to develop Jordan’s wind resources to deliver much-needed generating capacity, reduce the country’s import dependence and lower the carbon intensity of its power sector.
According to EBRD’s director for power and energy Harry Boyd-Carpenter, the agreement is “another example of how well-designed regulatory frameworks are allowing countries across the region to shift rapidly from reliance on hydrocarbons to energy sources that are sustainable, affordable and secure”.
Daniel Calderon, co-founder and CEO of Alcazar Energy, adds that the Shobak project is a “significant milestone” for the company in building a sustainable portfolio of assets.
“By early next year when construction starts on Shobak, our portfolio will comprise seven projects in construction or operation in the region. We appreciate the continued support of the government of Jordan, our lenders and investors. Shobak is further strengthening our relationship with the EBRD and the Arab Bank group who have both been supporting our company from its early years.”
Since 2012, the EBRD has committed more than US$1bn to 40 projects in Jordan. 11 of them are in the power and energy sector.