The role of OTP Bank in energy efficiency including renewable sources of energy, and ESCO financing

Transcription

1 The role of OTP Bank in energy efficiency including renewable sources of energy, and ESCO financing presented by Dr. Éva Weöres May, 2004 Geneva 1

2 Introduction of OTP Bank Largest commercial bank in Hungary total assets of HUF 2,763 bn (EUR 11 bn) - 27% of bank assets in Hungary market share of 13.4% in overall lending 14.2% of household, 11.9% of corporate, and 54.4% of municipal loans with respect to deposits OTP manages: 36% of retail, 14.3% of corporate, and 74.9% of municipal deposits Serves 100 out of the 200 largest Hungarian companies Central European members of the OTP Group include: Bratislava based OTP Banka Slovensko a.s. since April 2002 Bulgarian DSK Bank since October 2003 Romanian RoBank since May

3 OTP and the Environmental Industry Joined the United Nation s Environmental Program in 1994 Cooperates with the Hungarian Ministry of Environment Incorporated environmental risk analysis in its corporate lending policy Seeks an environmental friendly corporate image Has energy efficiency based lending with established credit arrangements In October 1999, OTP Bank reached an agreement with IFC-GEF Program for contract guarantees Since 2003 recognizes the CO2 emission-reduction quotas as equity participation in capital expenditure projects In 2004 participation in the financing of the employment of renewable energy sources In 2004 co-financing of EU backed environmental and infrastructural programs. ENERGY SAVED DUE TO HIGHER EFFICIENCY = ENVIRONMENT PROTECTION 3

4 OTP s Role in Energy Conservation In 1998 and in 2000, OTP Bank wins the public tender for financing annual HUF 1 billion worth of projects under the Municipal Energy Efficiency Program. The Program provides a financing opportunity with 50% interest rate subsidy with the following results: 500 TJ / yr energy savings on national level, HUF 700 m / yr savings for municipalities. 2000: HUF 1 billion loan for municipal district heating through Honeywell ESCO 2000: Entering a new market, by financing the modernization of heating systems for state budget supported public institutions (HUF 1 billion) : Municipal public lighting modernization through ÖKO-LUX ESCO 2002: Participation in the Széchenyi Program (state economic development program) providing 30% direct funding in energy saving projects : Participation in the National Energy Saving Program 2004: Participation in EU programs Leasing financing through Merkantil Bank Rt (a member of OTP Group) 4

5 ESCO financing by OTP Bank loans Since 2000 OTP Bank has participated in an increased number of ESCO financing: Approval of credit lines for ESCO companies; Modernization of public lighting HUF 1,200 million Modernization of indoor lighting HUF 2 billion Modernization of heating HUF 1.2 billion (residential houses & apartments) Hospital heating by use of gas engines HUF 1,100 million District heating (premier & seconder) HUF 4 billion Public institutions heating HUF 500 million Corporate companies energy modernization HUF 3,500 million Heat energy contracting HUF 450 million OTP Bank is an active financier of ESCO s with over HUF 13.5 million (EUR 41.4 mil) worth of financing 5

6 The factors considered for securitization against the risk of ESCO financing Well analyzed, and technically sound energy saving, which can serve as a source of debt repayment; Incentives provided for the ESCO company for energy saving, by taking all risk and performance guarantees; Only profitable, self financing projects are considered that are typically being grouped together with more similar projects to increase scale and diversification of project specific risks; Payment guarantees by the Municipality, and right for direct collection from the municipal accounts; The track record of the ESCO; Guarantees made by the equipment suppliers; The capital expenditure serving as a collateral; Debtor guarantees in case of state budget supported institutions; Transfer of revenue collection rights; IFC-GEF guarantees; Loan guarantee fund 6

7 The use of renewable sources of energy OTP has been actively involved the financing of the use of renewable energy sources Solar energy used at municipal institutions HUF 500 million - high schools, hotels (Fiorentini Hungary Kft) Geothermal energy used by district heaters HUF 1 billion - health tourism, heating of hotels, agricultural use Biomass fired power plant construction HUF 10 billion - (Pannon Power, Bakony, and Borsodi power plants) - resulting in EUR 10 million worth of CO2 emission reduction sold to the Government of Netherlands Wind power plant construction (120 MW) HUF 20 billion - currently at stage of indicative loan offer made 20 different biomass small power plants under preparation HUF 7 billion Gas engine fired deponia gas power plant at landfills HUF 500 million OTP Bank is an active financier of renewables with over HUF 39 million (EUR 160 m) worth of financing to be completed 7

8 OTP Bank an the residential energy savings OTP Bank reached an agreement with Főtáv (Budapest District Heat Co.), for the modernization of heating at 150 thousand district heated houses. The agreement offers residents a loan structure backed by IFC guarantees; OTP Bank reached an agreement with the Residential Housing Association for the modernization of apartment and cooperative housing units all across Hungary; Direct loans made to residents in cooperation with the National Energy Program. 8

9 2004 European Union s Environmental, Infrastructural & Operative Program Increasing energy efficiency program # Objective of the program is to increase of renewable energies in Hungary Amount of funding available in 2004: HUF 1,200 million The maximum subsidy amount is HUF 300 million (20-60% of Cap-Ex) Areas to be subsidized: Increasing of capacities for the securing raw material necessary for renewable energy generation, and transformation of existing capacities into renewable energy plants; Creation of sizable renewable energy plants (biomass, geothermal, solar, wind and small water plants); Municipal use of renewable energy at circular district heating, use of landfill gases, biomass or geothermal energy; Municipal energy efficiency increase by technology modernization, use of cogeneration, and waste heat. 9

10 The National Energy Saving Program The total amount of support provided by the Nation Energy Saving Program in 2004 was HUF 2,5 billion Conditions: the size of state support 30% own equity requirement 25% loan 45% Support of energy savings at the private consumer level Max: HUF ,000 / homes Sum: HUF 850 million Support for modernization of public lighting Max: HUF 25 million Sum: HUF 50 million Support for the expansion of renewable energy sources Max: HUF 35 million Sum: HUF 100 million Support for the detection of energylosses in the industrial sector Sum: HUF 50 million Support for decreasing municipal energy consumption and associated costs Max: HUF 25 million / institutions Sum:HUF 200 million Support for the supply-side modernization of district heating Max: HUF 50 million Sum: HUF 600 million Support for ESCOs Max: HUF 15 million Sum:HUF 550 million Support for small and medium size Enterprises involved in the use of renewable energy Sum: HUF 100 million 10

11 The National Energy Saving Program The National Energy Saving Program supports the ESCO projects, residents, municipalities, and use of renewables OTP Bank is a partner in providing the necessary loan financing. In case of leasing type financing Merkantil Bank provides the financing for production type assets 11

12 OTP Bank s Involvement in other Central European Countries Slovakia: OTP Banka Slovensko a.s. (OBS) OTP Group member since April 2002 Hungarian ESCOs participating in cross border energy saving projects Bulgaria DSK Bank became a member of OTP Group in October 2003 Bulgarian-Hungarian joint ESCO is being established for modernization of public lighting and heating systems Romania RoBank has just to become an OTP member in 2004; Country of 23 million people offering a wide range of further opportunities And finally, some famous quotes by István Széchenyi (the Greatest Hungarian): Money, if well used and invested, can make magic in the world Money is only a tool, the goal is the mutual success. 12

13 Contact - Dr. Éva Weöres Company: Position: OTP National Saving and Commercial Bank Inc. Financial consultant of energy efficiency and environmental projects Address: 1136 Budapest, Babér utca 9, Hungary Mail Address:1876 Budapest, Nádor utca 16, Hungary Mobile: Phone: Fax: VUF@otpbank.hu 13