📋 Tender Overview
To help Albania improve its climate resilience diversify its energy mix and scale up clean and affordable energy sources IFC is providing a 41-million financing package to Karavasta Solar sh.p.k supporting the largest solar photovoltaic power plant in the country.IFCs funding includes an A loan of up to 29 million and a B1 loan of up to 12 million which is part of a wider package including a loan of up to 58 million from the European Bank for Reconstruction and Development and Intesa Sanpaolo. Voltaliaa global utility-scale renewable energy developer and service providerhas incorporated Karavasta Solar sh.p.k. a special-purpose vehicle for the development construction and operation of Albanias first large-scale solar photovoltaic PV project.Albania relies almost entirely on hydropower for its domestic power generation which is seasonal and insufficient to meet the countrys growing demand for power. As a result the country is heavily reliant on expensive fossil fuel-based power imports. Moreover the regional energy market disruptions in Europe and high energy prices globally highlight Albanias need to further develop its renewable energy sources. Climate change is having an adverse effect on hydropower production due to decrease in annual runoff which is expected to further continue. Annual energy demand in Albania is expected to increase by 77 in 2030 and electricity output from large hydropower plants are expected to decrease by about 15-20.The PV plant will prioritize resilience by securing electricity supply in the face of erratic rainfall and mounting PVs onto higher piles to protect them from coastal flooding. The climate adaptation finance provided by IFC will increase diversification in Albanias renewable energy mix contributing towards increased resilience of the power sector.IFCs funding will enable the development of a 140-megawatt power plant and a 19-kilometer overhead transmission line located in Fier municipality western Albania. Once operational the plant is expected to generate over 265 gigawatt hours of electricity annually with greenhouse gas emission reductions of circa 96500 tons of CO2 equivalent per year and supporting Albanias climate goals.In view of a high installed capacity of 140 MWp as well as a short realisation time of a year and a half this project has triggered a boom for solar energy in the country said Constantin von Alvensleben Voltalias Country Manager for Albania. Todays signing is a proof of the quality and the sustainability of the project. It is a great moment for all stakeholders including Government of Albania Voltalia as the developer borrower and contractor and the banking consortium consisting of EBRD IFC and Intesa San Paolo Bank.The Karavasta project will adopt a novel hybrid commercialization strategy. This includes selling 50 of the power generation to a state-owned utility at a fixed price and selling the other 50 at market prices combined with a power price hedge to avoid price volatility.We are very pleased to provide catalytic financing to Karavasta Solar and contribute to making a transformative impact on Albanias generation matrix said Ary Nam IFCs Regional Manager for Central and Southeast Europe. This investment demonstrates how with good policies countries in the Western-Balkans can best attract fresh private investment and provide better and more sustainable infrastructure services without over-relying on the state fiscal and human resources.IFC is the largest development finance institution supporting the private sector in emerging markets investing directly and partnering with financial institutions in climate-smart sectors. This project highlights IFCs key role in driving the countrys renewable energy agenda and aligns with IFCs climate business approach.
