Business Forum • 14 June, 2024 at 7:05 PM
IFC is providing long-term debt financing for the 461-megawatt (MW) Vifor Wind Power Plant, to boost the supply of competitively priced renewable energy in Romania. The project will play a significant role in reducing Romania's greenhouse gas (GHG) emissions and bolstering the country's climate commitments and energy transition goals.
Developed through a joint venture between Rezolv Energy S.A., the regional energy platform of global infrastructure investor Actis, and global renewable energy company Low Carbon, Vifor is being developed under two phases. Phase 1 starting construction for an installed capacity of 192 megawatts, and Phase 2 for an additional 269 megawatts of incremental capacity, currently preparing for construction. IFC's loan for Phase 1 consists of €21.4 million from IFC's own account and is part of a larger €291 million financing package alongside commercial banks and other lenders.
The new project will be one of Romania's first large-scale greenfield renewable energy projects financed without public support. Once fully operational, it is expected to reduce the carbon footprint of Romania's energy sector by an estimated 500,000 tons of carbon dioxide equivalent emissions per year, supporting the country's goal of reducing net GHG emissions by at least 55 percent by 2030.
Rezolv Energy's Jan Viton, Financing and M&A Director, said: “This is a truly landmark project and the first one Rezolv Energy brings to financial close. We are very proud at the interest this financing has generated among a wide spectrum of financial institutions, and we are delighted to have established a core group of lenders including IFC, which we hope to continue to call upon in the future as we deliver our pipeline of renewables projects across the region.”
“We are delighted to be partnering with IFC on Vifor, who will play a crucial role in its establishment by helping to unlock capital to finance the project,” said Martin Langham, Managing Director at Low Carbon. “Once built, Vifor will be one of the largest wind projects in Eastern Europe and reinforces our track record of working with institutional investors to deliver large-scale renewable infrastructure, while playing a key role in supporting Romania's efforts to decarbonize its electricity grid.”
While Romania has made progress in reducing GHG emissions, the country still relies heavily on fossil fuels, resulting in an emissions intensity 1.4 times higher than the European Union average. The scheduled 2032 phase-out of coal for electricity generation means an estimated $31.5 billion in investment is needed to facilitate the energy transition in the power generation and storage sector.
The wind power plant, to be located near Buzau in southeastern Romania, will also offer a pioneering hybrid energy sales model, combining wholesale electricity market sales and corporate power purchase agreements with commercial and industrial customers and traders.
“To achieve its climate commitments, Romania needs to accelerate its deployment of clean energy sources,” said Ary Naïm, IFC Manager for Central and South Europe. “IFC is pleased to have the opportunity to partner with Rezolv Energy and Low Carbon on this landmark project, to help demonstrate the bankability of private utility-scale onshore wind generation projects selling power on purely commercial terms and spur the energy transition in the country and region.”
Romania represents IFC's largest country exposure in Europe, with a portfolio of $2.1 billion, and its 10th largest globally.