26999 - Creative Energy Resources

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Summary of Proposed Investment

Project Number

26999

Company Name

CREATIVE ENERGY RESOURCES

Date SPI Disclosed

Aug 21, 2008

Country

Middle East, Pakistan, and Afg Region

Industry

Infrastructure

Projected Board Date

Sep 25, 2008

Status

Completed

Sector

Electric Power Other (Including Holding Companies)

Department

Regional Industry INF MCT

Environmental Category

B - Limited

Previous Events

Approved : Oct 30, 2008
Signed : May 19, 2009
Invested : Jul 23, 2009

Project Description

Creative Energy Resources (CER or the company) is a newly formed investment holding company that will acquire, develop, build, own and operate power sector projects (i.e., generation, transmission and distribution), primarily in the Middle East and North Africa (MENA) region, with a secondary focus on opportunities in South Asia and Turkey. Within the MENA region, the company will primarily focus on investments in the non-Gulf Cooperation Council (GCC) countries. CER intends to become a leading power company in the MENA region by building a diversified portfolio of greenfield and existing power assets, including renewable energy assets.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan
Equity	50.0

Development Impact

The project is expected to deliver significant development impact in its markets by:

- helping meet strong electricity demand growth in the regions where it operates;
- promoting the mobilization of much needed private investment in the power sector;
- contributing to sustainable economic growth and improved living standards by supporting the provision of additional power and by increasing reliability of supply through the projects it acquires or develops;
- assisting in the promotion of long-term capital, as opposed to short-term capital, that is not readily available in the MENA region;
- supporting deregulation and sector reforms to encourage private investment in the power sector, particularly in the MENA region; and
- helping release public resources for investments in high priority social sectors.

- Support a new private sector power developer with a primary focus on the MENA non-GCC countries

With the proposed investment, IFC will support a new entrant, CER, to establish its business in a region that is seeking significant levels of private investments in the power sector.

- Leverage IFC industry experience and network

IFC will seek to leverage its knowledge and experience in the power sector to support the company as it enters new markets, particularly the frontier countries in MENA.

- Help achieve high environmental & social (E&S) standards

IFC’s presence in the company as a shareholder will allow CER to develop a robust environmental and social management system (ESMS), ensuring the implementation of IFC’s Performance Standards on environmental and social aspects at the project level.

- Promote South-South investments

Capital commitments to CER, including from the Sponsor, are predominantly coming from MENA based investors. By supporting CER to invest in the power sector in non-GCC MENA and secondarily in South Asia and Turkey, IFC is playing a vital role in promoting South-South investments in the MENA and neighboring regions.

- Stamp of approval

As CER is still an early stage venture, CER’s management sees particular value in IFC’s participation, which will enhance credibility in its dealings with various counterparties, including new equity investors, lenders, potential off-takers, and other industry participants.

- Debt funding and mobilization

CER’s preliminary estimates envisage the raising over time of around $1 billion of debt at the project level, to complement and leverage its equity base. CER considers IFC’s proposed equity investment, as a foundation for a long-term partnership, which could open the possibility for IFC to directly co-invest with and provide a role in future debt mobilization, especially in the more challenging markets in MENA, where long-term, limited or non-recourse debt might not be easily accessible.

IFC’s funding for this category B project will, except for Uch Power, support future, but as yet, uncommitted projects. The principal Performance Standards (PS) applied to this investment at appraisal are PS1: Social and Environmental Assessment and Management Systems; and PS2: Labor and Working Conditions. The key issue for IFC going forward is the effectiveness of CER’s corporate ESMS and the ability of the organization to ensure compliance with appropriate host country regulatory requirements and IFC PSs in the various assets it acquires or develops. A condition of IFC’s investment will be that all projects undertaken shall consider all relevant social and environmental risks and impacts, including the issues identified in PS1 through PS8.

Contacts

For Inquiries About the Project, Contact

Shahzad Qasim
Creative Energy Resources
2411 Grosvenor House Tower
Sheikh Zayed Road
PO Box 125448
Dubai, UAE

Telephone: 971-4-3297919
Website: www.cer-c.com

For Inquiries and Comments About IFC, Contact

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2121 Pennsylvania Avenue, NW
Washington DC 20433
Telephone: 202-473-3800
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Local Access of Project Documentation

For each CER invested project, environmental and social documentation prepared by CER to meet Country requirements, and the project-specific Action Plan will be available to the public at CER’s headquarters and at each project location.

For further information about CER or specific projects, contact Shahzad Qasim (contact information provided above).

This Summary of Proposed Investment is prepared and distributed to the public in advance of the IFC Board of Directors' consideration of the proposed transaction. It is not an offer of shares to the public and is intended solely to enhance the transparency of IFC’s activities. This document should not be construed as presuming the outcome of the Board decision. Board dates are estimates only. The following SPI is disclosed in accordance with IFC’s Policy on Disclosure of Information that went into effect April 30, 2006.

The map is for illustrative purposes and does not imply the expression of any opinion on the part of the World Bank, concerning the legal status of any country or territory or concerning the delimitation of frontiers or boundaries. Country borders or names do not necessarily reflect the World Bank Group's official position. In some cases, available project location information is limited to the country of the project's activities. Locations are approximate.

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