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The provision of long-term senior debt of up to USD 105 million for the development, construction and operation of a wind power plant with an installed capacity of 240 MW located in the Khizi and Absheron regions of eastern Azerbaijan (the Project). ACWA Power Azerbaijan Renewable Energy Limited Liability Company, a special purpose vehicle established in Azerbaijan, will act as the borrower. ACWA Power will act as the sponsor for the project.

The Project will add 240 MW of wind generation capacity to the power system of Azerbaijan. This would help substitute natural gas-based power plants and help in meeting the renewable energy targets set by the Government of Azerbaijan in line with county's commitments under the Paris Agreement. The Project will also result in strong environmental benefits with estimated annual CO2 emissions savings of up to 400,000 tonnes. This will assist the country in its low-carbon transition, reducing its current high reliance on thermal power generation.

The transition impact of the Project is expected to come mainly from its contribution to the currently state-dominated Azerbaijani power sector by adding a new private entrant. The Project is expected to be the first privately owned utility scale wind power project in the country. The Project will also introduce a new international power sector sponsor to the country in a key milestone for power sector development.

The transition impact of the Project will also stem from its alignment with the EBRD's Green Economy Transition approach (GET) as it will allow producing electricity using wind power, which will assist the country in its low-carbon transition, reducing its current high reliance on thermal power generation.

ACWA POWER AZERBAIJAN RENEWABLE ENERGY LIMITED LIABILITY COMPANY

ACWA Power Azerbaijan Renewable Energy Limited Liability Company (the Borrower) is a limited liability company incorporated in Azerbaijan for the sole purpose of the Project.

ACWA Power is an international developer of power generation and desalinated water projects.

Up to USD 105 million loan to the Borrower to finance the development of a 240 MW wind power plant. Along with the EBRD, a number of other financial institutions are expected to support the Project.

Financing structure: The Bank is additional in providing long-term financing at terms and conditions not available in the local market for this major infrastructure project, particularly in view of the limited liquidity caused by the COVID-19 pandemic and as this is one of the first private project financings of a renewable energy project in Azerbaijan.

Policy, sector, institutional, or regulatory change: The Bank is actively involved in the development of policy dialogue in Azerbaijan. The Project is a key milestone for the country's renewables sector, and will further its green agenda, serving as a pilot for further renewables development.

Categorised A (ESP 2019) and High Risk due to the wind sector, and size of the Project, cumulative impacts and proximity to candidate Emerald/IBA Site. The cumulative development of a two greenfield 240 MW wind farms (WPP) and grid connection infrastructure is associated with potential considerable E&S risks, notably biodiversity, land and social impacts, and requires an Environmental and Social Impact Assessment (ESIA) in line with EBRD ESP and 60 days' disclosure prior to the Board consideration.

An Environmental and Social Impact Assessment (ESIA) as well as supplementary ESIA package, inclusive of NTS, ESAP, SEP and LARF have been developed by an international Consultant engaged by ACWA Power and disclosed on ACWA Power's and EBRD's websites on 20 May 2022.

Project website: Azerbaijan Wind IPP (acwapower.com) EBRD website: Azerbaijan Absheron-Khizi WPP (ebrd.com)

EBRD ESDD is being undertaken by an independent E&S Consultant and includes review of the ESIA and gap analysis, assessment of cumulative impacts from the Project and the associated infrastructure, community and livelihood impacts resulting from land take and operation of wind farm, social, labour and safety aspects during construction and operation, as well as supply chain management. The ESDD is also reviewing potential impact on avifauna and need for mitigation measures based on a bird collision risk assessment.

The PSD will be updated after the completion of the ESDD.

Javid Alifli jalifli@acwapower.com +994 12 465 99 38 www.acwapower.com ACWA Power Azerbaijan office, Landmark Business Centre III, 90A Nizami street, Baku, Azerbaijan

Further information regarding the EBRD’s approach to measuring transition impact is available here.

For business opportunities or procurement, contact the client company.

For business opportunities with EBRD (not related to procurement) contact:

Tel: +44 20 7338 7168 Email: projectenquiries@ebrd.com

For state-sector projects, visit EBRD Procurement: Tel: +44 20 7338 6794 Email: procurement@ebrd.com

Specific enquiries can be made using the EBRD Enquiries form.

The ESP and the associated Performance Requirements (PRs) set out the ways in which the EBRD implements its commitment to promoting “environmentally sound and sustainable development”.  The ESP and the PRs include specific provisions for clients to comply with the applicable requirements of national laws on public information and consultation as well as to establish a grievance mechanism to receive and facilitate resolution of stakeholders’ concerns and grievances, in particular, about environmental and social performance of the client and the project. Proportionate to the nature and scale of a project’s environmental and social risks and impacts, the EBRD additionally requires its clients to disclose information, as appropriate, about the risks and impacts arising from projects or to undertake meaningful consultation with stakeholders and consider and respond to their feedback.

More information on the EBRD’s practices in this regard is set out in the ESP.

The EBRD's Office of the Chief Compliance Officer (OCCO) promotes good governance and ensures that the highest standards of integrity are applied to all activities of the Bank in accordance with international best practice. Integrity due diligence is conducted on all Bank clients to ensure that projects do not present unacceptable integrity or reputational risks to the Bank. The Bank believes that identifying and resolving issues at the project assessment approval stages is the most effective means of ensuring the integrity of Bank transactions. OCCO plays a key role in these protective efforts, and also helps to monitor integrity risks in projects post-investment.

OCCO is also responsible for investigating allegations of fraud, corruption and misconduct in EBRD-financed projects. Anyone, both within or outside the Bank, who suspects fraud or corruption should submit a written report to the Chief Compliance Officer by email to compliance@ebrd.com. All matters reported will be handled by OCCO for follow-up. All reports, including anonymous ones, will be reviewed. Reports can be made in any language of the Bank or of the Bank's countries of operation. The information provided must be made in good faith.

The AIP sets out how the EBRD discloses information and consults with its stakeholders so as to promote better awareness and understanding of its strategies, policies and operations following its entry into force on 1 January 2020. Please visit the Access to Information Policy page to find out what information is available from the EBRD website.

Specific requests for information can be made using the EBRD Enquiries form.

If efforts to address environmental, social or public disclosure concerns with the Client or the Bank are unsuccessful (e.g. through the Client’s Project-level grievance mechanism or through direct engagement with Bank management), individuals and organisations may seek to address their concerns through the EBRD’s Independent Project Accountability Mechanism (IPAM).

IPAM independently reviews Project issues that are believed to have caused (or to be likely to cause) harm. The purpose of the Mechanism is: to support dialogue between Project stakeholders to resolve environmental, social and public disclosure issues; to determine whether the Bank has complied with its Environmental and Social Policy or Project-specific provisions of its Access to Information Policy; and where applicable, to address any existing non-compliance with these policies, while preventing future non-compliance by the Bank.

Please visit the Independent Project Accountability Mechanism webpage to find out more about IPAM and its mandate; how to submit a Request for review; or contact IPAM  via email ipam@ebrd.com to get guidance and more information on IPAM and how to submit a request.