The project is being developed by a Bulgaria registered Special Purpose Vehicle, AES GeoEnergy (the company), which is owned by global energy company AES Corporation (AES) and its Bulgarian partner, GeoPower OOD (GP, together with AES, the sponsors). Upon financial close AES will own 89% of the company, and GP 11%.

The total project cost is estimated at approximately € 260 million. Debt facilities will be provided to the Project by IFC, the European Bank for Reconstruction and Development (EBRD) and UniCredit. The proposed IFC investment is a €40 million A Loan (representing approximately 15% of the project cost) and a similar size B Loan

62.93 million (USD)

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	62.93
Equity

* These investment figures are indicative

The project will be constructed over 52 approximately 1 decare plots of land (one per turbine), and a 6,000 m2 plot for the project substation, spread out over a total area of approximately 60 km2. All of the plots of land are owned by GP and will be rented to the project for 20 years.

The proposed site has been allocated under the current territorial structural plan as land designated for farming and other compatible activities. As only 6 hectares of land will be permanently required for the operations of the wind farm, the land will predominantly continue to be used for agriculture purposes.

Once operational, the project will:

- increase Bulgaria’s electricity output from renewable energy by approx 330 GWh per annum, thereby helping Bulgaria maintaining its EU commitment of 11% of electricity consumption generated by renewable energy by 2010 and progress towards the 16% target by 2020;
- decrease the country’s dependence on highly-polluting coal-lignite fired generation and nuclear generation;
- in doing so, displace up to approximately 300,000 tons of carbon emissions per year – reducing pollution in the North East of the country and contributing to the effort to reduce global warming;
- help Bulgaria maintain its position as one of the main power exporters or the region;
- by nature of the size of the transaction, influence Bulgaria’s ability to attract foreign investment in the renewable energy sector and position Bulgaria as an alternative emerging market destination for wind power investments.

- Assisting the sponsors in identifying and addressing (with the assistance of external consultants) key environmental and social risks;

- Financing a substantial part of the project cost, providing a loan with a longer average life than that available from commercial banks; and
- providing additional comfort to B-Loan participants through IFC’s structuring and due diligence role, as well as in light of regulatory and political risk, especially given the recent market turmoil in financial markets in Europe and the USA;

- Providing support to an IFC long time client in their quest to develop a sizeable renewable energy footprint in the region.

The project has been classified as a Category A project according to IFC’s Environmental and Social Review Procedure because of potential impacts on migratory birds and migration corridor impacts. The project site is located in the Kaliakra Peninsula in the Via Pontica migration corridor, a major Flyway of European significance. Impacts on birds relate primarily to projected incremental mortality rates the project potentially poses and the cumulative impacts of wind development in the project area on mortality and the migration corridor. A comprehensive range of baseline bird surveys has been undertaken for the purposes of the Environmental Assessment (EA) and a Collision Risk Assessment (CRA) was undertaken using the Scottish National Heritage (SNH) model, a widely used and accepted model. Based on the CRA, as defined in detail in the EA documentation, the project is not expected to affect species viability or the viability of the migration corridor. There is nonetheless incremental mortality of endangered species associated with the project and cumulative impacts. This loss for endangered species is also modeled to be well under the SNH threshold limits and is thus not deemed significant. The project will incorporate radar and human observation and detailed turbine shutdown plans will be implemented when migratory flocks approach.

Additional key environmental, health, safety and social (EHSS) issues associated with this project include:

- environmental assessment and management;
- labor policy and contractor management;
- management of construction activities and wastes;
- temporary traffic disruption and community safety during construction;
- cultural property; and - worker health and safety during construction and operations phases.

The impacts associated with these additional issues can be avoided or mitigated by adhering to generally recognized performance standards, guidelines or design criteria. The project is otherwise of obvious positive benefit as it will generate electricity from a renewable resource. AGE has completed an independent EA, independent Supplementary EA, public consultation (and will conduct additional consultation), developed a detailed Environmental Management and Monitoring Plan (EMMP) and has committed to conduct its activities in accordance with the requirements therein, and will, upon implementation of the EA, EMMP and specific additional measures described below, comply with the IFC Performance Standards on Social and Environmental Sustainability.