The Asian Development Bank (ADB) has agreed to provide $11.5m loan to Baikonyr Solar to support the development of solar power in Kazakhstan.
The loan marks ADB’s long-term local currency financing for a solar project in Central Asia. It is also the first time that ADB has forayed into solar energy financing in the subregion and its first co-financing with the European Bank for Reconstruction and Development (EBRD) in Kazakhstan’s renewable energy sector.
The solar plant will have a capacity of 50MW and Baikonyr Solar will provide the design, construction, commissioning, operation, and maintenance services for the solar project, along with the necessary infrastructure for grid integration.
The solar plant could generate about 73GWh of electricity per year and will be powered by 150,822 photovoltaic panels, 14 central invertor stations and a substation. It will be located in southern Kazakhstan on a 150 hectare piece of land.
Baikonyr Solar is a special purpose vehicle (SPV) incorporated in Kazakhstan and is owned by UG Energy and Baiterek Venture Fund Joint Stock Company (BVF).
ADB private sector operations senior investment specialist Mohammed Azim Hashimi said: “Kazakhstan’s energy sector has mostly relied on coal with almost 80% of the country’s electricity generated from coal-fired power plants, which are mostly outdated and obsolete.
“ADB’s loan to Baikonyr will help Kazakhstan achieve its goal of increasing the share of renewable energy in the country to 50% by 2050, while reducing its carbon emissions.”
When complete, the solar plant is expected to cut carbon emissions, while contributing significantly to the country’s Paris agreement of bringing down 15% carbon emissions below 1990 levels by 2030.
Last November, the Asian Development Bank signed an agreement with Samruk-Energy, to provide $80m loan for the power generation company. The loan will be used by the company to identify renewable energy pipeline, enhance operational efficiency and reduce foreign exchange risk.
Established in April 2007, Samruk-Energy has energy generation assets that have been classified by the government as power plants of national importance. As of 2016, the company has a total installed capacity of 6.8GW, representing nearly 31% of the total installed capacity in the country.