ALCAZAR ENERGY PARTNERS II

Equity fund targeting renewable energy projects in the Middle East, North Africa, Eastern Europe and Central Asia.

Equity fund targeting renewable energy projects in the Middle East, North Africa, Eastern Europe and Central Asia.

EIB's investment supports an experienced investment team's strategy to build a portfolio of renewable energy assets in underserved markets that have significant requirement for new energy generation capacity. It also supports a Promoter with high standards of environmental, social and governance ("ESG") best practices, in alignment with EIB's Climate Bank Roadmap. The operation will support two areas of focus of the European Commission's assistance programme (Environment and Climate Change and Energy).

The operation addresses the market failure in risk-taking that is hindering the development of greenfield infrastructure assets in the Fund's target regions; and the gap between supply and demand that are closely linked to lack of capacity and availability of funding for such assets.

Moreover, the operation addresses the market failure of negative environmental externalities, through the reduction of carbon and air pollution.

EIB's recommendations have significantly shaped the Fund's governance structure and investment strategy. An EIB investment will be an essential component for the Fund to achieve (i) the target fund size, and (ii) a solid basis to invest responsibly in a high quality portfolio.

The Promoter has demonstrated willingness to introduce structural changes to be in compliance with EIB Group policies and best market practice.

Details of the fund's environmental and social due diligence procedures for ensuring compliance with national legislation, the principles and standards of relevant EU legislation and EIB's Environmental and Social Standards as well as the capacity of the fund manager to assess and monitor environmental and social risks and impacts, will be reviewed during appraisal. The fund will be required to develop an environmental and social policy and establish the appropriate management systems so as to comply with the environmental and social requirements of the Bank. The assessment of the environmental and social impacts and risks will be part of the standard due diligence process that the fund will have to carry out for each underlying investment, thereby ensuring that the portfolio and these investments are in compliance with national law and in line with the principles and standards of relevant EU environmental legislation as well as the EIB's Environmental and Social Standards.

The Bank will require the fund manager to take all requisite measures to ensure that contracts for implementation of the projects financed by the fund are tendered in line with the Bank's Guide to Procurement. In the case of investments in Candidate or Potential Candidate countries, the applicable EU public procurement rules will be ensured.