Seed Capital Assistance Facility II

Transcription

1 Seed Capital Assistance Facility II

2 Table of content I. Frankfurt School and the FS UNEP Collaborating Centre II. Market failures targeted by the Seed Capital Assistance Facility III. Seed Capital Assistance Facility II approach and instruments IV. Previous Experience and Results

3 Institutional Centre Setup Frankfurt School of Finance & Management Stiftung Board of Trustees Frankfurt School of Finance & Management non for profit limited Media-House Frankfurt School Verlag GmbH efiport AG Financial Services International Advisory Services Frankfurt School UNEP Collaborating Centre Academic Programmes Research Executive and Professional Education Professional & Certificate Programs Corporate Programs & Seminars Educational and professional programs, Advisory, Research etc.

4 International Advisory Services Competence Centers SME/ Project Finance. Microbanking ** MFI Transformation & Mergers FS-UNEP Collaborating Centre IAS - Facts & Figures ** Financial Literacy Risk Management Training Consultancy Research Housing Finance Founded in 1992 Volume 2012: Staff: 14.7 million 70 (permanent), 100 (project staff) Projects 2012: 122, of which 35 in the Centre Remittances Fund Advisory Rural & Agriculture Finance Countries 2012: 84

5 FS-UNEP Collaborating Centre Examples of Current Centre Projects Advisory projects Climate Finance Innovation Facility (CFIF) Finance for Access to Clean Energy Technologies (FACET) Education & qualification Finance Business strategies Management Policy development Networks & Outreach Seed Capital Assistance Facility (SCAF) Indonesia Solar Loan Programme (ISL) National Climate Finance Institutions Support Programme (NCFISP) Research Microfinance for Ecosystem-Based Adaptation to Climate Change (MEbA)

6 Table of content I. Frankfurt School and the FS UNEP Collaborating Centre II. Market failures targeted by the Seed Capital Assistance Facility III. Seed Capital Assistance Facility II approach and instruments IV. Previous Experience and Results

7 Where are the financiers along the project cycle? Capital Markets (generally driven by P/E and other comparables rather than return) Carbon Finance (20-25+%) Debt Finance (Project Finance) (Indicatively, e.g., 7-8% in US$; 11-13% in INR) Mezzanine Capital (12-15%, somewhere between debt and equity return) Private Equity & Infrastructure Funds (18-25+%) Development/Transaction Costs

8 Catalytic Impact of Early Stage Finance

9 Market failures Lack of local project developer expertise Lack of fund management expertise in early stage projects Lack of sufficient equity resources for early stage investment Lack of appetite for least developed/low income countries

10 Table of content I. Frankfurt School and the FS UNEP Collaborating Centre II. Market failures targeted by the Seed Capital Assistance Facility III. Seed Capital Assistance Facility II approach and instruments IV. Previous Experience and Results

11 What is the SCAF Concept?

12 Establish Feasibility Financial Close Support Lines along the Project Cycle Risk Capital Market Activity Early Stage Project Development Activity Late Stage Project Development Activity Construction Finance Helping new fund mgrs set up funds Helping fund mgrs assess and develop projects prior to seed investrment Supporting project developments alongside fund mgr seed investment Support Line 0 Support Line 1 Support Line 2 Out of scope Seed investment Fund Formation Early-stage Mid-stage Late-stage Development Construction Operation Source: Aequero, UNEP, FS Project Development Lifecycle

13 Which support does SCAF provide? Purpose Support Line 0 Support Line 1 Support Line 2 Help first time fund managers to reach first financial close Aimed at developing the pipeline of early stage investments Co-finance elevated development cost on a specific projects Target Only available for PE/VC funds PE/VC funds, DevCos Activities Amount Co-finance selected set-up costs, such as - Preparation of offering/placement memorandum; - Legal advisory costs on fund structuring; - Drafting of LP/investor documentation Co-financing of up to a maximum of 50% of eligible costs Average amount per partner agreement USD 400,000 Co-financing of eligible costs up to a maximum per agreement: - Provides business development support to local project developers; - Identification & training of new precommercial clean energy entrepreneurs and developers; - Coaching services for specific promising investment opportunities Amount per partner agreement USD 700, ,000 Conditions Anchor investor must be secured Only for the funds meeting SCAF investment guidelines Reimburse ment Reimbursable upon first financial close of fund Will be given as a grant as a first step 30%-50% co-funding for each seed finance transaction for covering a wide range of project development costs: - Technical assessments, ESIA, regulatory reviews - Negotiation of PPAs or other offtake agreements - Operational and maintenance cost reviews and analysis Amount per partner agreement USD 1,600,000 1,800,000 Each project to approved individually for SCAF support Reimbursable at financial close of the project

14 Table of content I. Frankfurt School and the FS UNEP Collaborating Centre II. Market failures targeted by the Seed Capital Assistance Facility III. Seed Capital Assistance Facility II approach and instruments IV. Previous Experience and Results

15 Example of a SCAF supported project (2) Mid scale wind farm in South Africa

16 Africa Previous projects supported by SCAF Asia Name, Country Tech. Size (MW) Kouga South Africa Tanzania Uganda Uganda Stage Wind 80 Fully Financed, Construction Phase Small hydro Small hydro Small hydro 10 Seed Financed, Financial closing 5.4 Seed Financed, Feasibility Stage 22 Seed Financed, Feasibility Stage Kenya Wind 50 On hold Kenya Geo. 35 Feasibility Kenya Biomass 12 Feasibility Rwanda PV 20 Feasibility Country Tech. Size (MW) Stage Philippines Wind 48 Seed financed, Financial closing Philippines Small hydro 25 Seed Financed, Financial closing Philippines Biomass 30 Feasibility Philippines India India India Small hydro Small hydro Small hydro Wind farm 24 Feasibility 13 Feasibility 48 Feasibility 230 Feasibility Tanzania Biomass 4 Pre-feasibility

17 What is the mitigation potential of SCAF projects?

18 Thank You! Contact Us For more information please visit Martin Cremer Frankfurt School UNEP Collaborating Centre Mert Dedebas Frankfurt School UNEP Collaborating Centre