Financial Mechanisms and Policies Oriented towards the development of Renewable Energy Markets. Mexico City, 28 November 2007

Transcription

1 Financial Mechanisms and Policies Oriented towards the development of Renewable Energy Markets Mexico City, 28 November 2007

2 Index I. Santander I Financing Drivers I Market Drivers IV. Example: Refit V. Example: Kyoto Protocol This presentation was prepared by Banco Santander and the content herein is of a strictly confidential nature. This presentation cannot be reproduced, distributed or published by the recipient or used for any purpose whatsoever without the prior written consent of Banco Santander. Although the information contained in this presentation was obtained from sources considered reliable, Banco Santander cannot guarantee the accuracy and truth of the same. The opinions presented herein represent those of Banco Santander at the present time, and are, therefore, subject to amendment and alteration. Banco Santander is not responsible for any direct losses or reduced profits that may result from the use of the information contained herein. 2 STRICTLY CONFIDENTIAL

3 Santander: Key Facts I Ranked 7 th worldwide * Ranked 1 st in Spain; 1 st in Euro zone; 1 st in Latin America * 130,000 employees 10,800 offices 40 countries 67 million clients FY billion on income 22.6 billion 22% CAGR 2.3 million shareholders * By profitability Data from Grupo Santander Annual Report year ending 31 December 2006 unless otherwise stated 3 STRICTLY CONFIDENTIAL

4 Santander: Asset & Capital Structuring I Asset & Capital Structuring Promotion and development of projects Focus on renewable energy, carbon finance and energy efficiency Early project entry Proactive involvement in project promotion and development Santander Contribution: Know-how Capital Access 4 STRICTLY CONFIDENTIAL

5 Index I I. Santander Financing Drivers I Market Drivers IV. Example: Refit V. Example: Kyoto Protocol 5 STRICTLY CONFIDENTIAL

6 Financing Drivers I Solid Sponsor Solid EPC Contractor Proven Technology Clear / Effective Regulation Acceptable Country Risk IPP Framework Flexible PPA Framework Flexible Transport Mechanisms 6 STRICTLY CONFIDENTIAL

7 Index I I. Santander Bank Financing Requirements I Market Drivers IV. Example: Refit V. Example: Kyoto Protocol 7 STRICTLY CONFIDENTIAL

8 Market Drivers I Project Availability Drivers Clear Regulatory Framework Technology Availability Availability of Long-term Financing Grid Capacity and Access Favourable treatment of renewable energy 8 STRICTLY CONFIDENTIAL

9 Index I I. Santander Financing Drivers I Market Drivers IV. Example: Refit V. Example: Kyoto Protocol 9 STRICTLY CONFIDENTIAL

10 Example: Refit I Solar Photovoltaic Energy EU commitment to produce 20% energy requirements from renewable sources by 2020 Renewable Energy Feed In Tariff (Refit) support schemes for generators Obligation by distributors to purchase all energy generated Obligation to provide grid access Known minimum price Scheme has increased installed solar photovoltaic base from 10MW to target amount of 400MW within 3 year period Generated investment of US$ 5 billion. 10 STRICTLY CONFIDENTIAL

11 Example: Refit 1. Spain was the first European country to introduce a feed-in tariff funding system for solar thermal power I Solar Photovoltaic Energy 2. Electricity distribution company impact: Feed-in tariff: US$650/MWh during the first 25 years after start up and US$520/MWh thereafter. Feed-in tariff annual increase: according to CPI, subtracting: 25 bp during the first 25 years after start up 50 bp thereafter 11 STRICTLY CONFIDENTIAL

12 Index I I. Santander Financing Drivers I Market Drivers IV. Example: Refit V. Example: Kyoto Protocol 12 STRICTLY CONFIDENTIAL

13 Example: Kyoto Protocol Forward sale of CER using ERPA into EU against investment grade counterparty provides additional collateral I Project finance Debt Structure CER Credit Enhancement Structure CER income stream supports higher debt leverage and potentially enables lower debt service cost Result is greater return on investment for promoter CER Purchaser (Investment Grade) Collateral ERPA Promoter Capital Project SPV Debt Lender 13 STRICTLY CONFIDENTIAL

14 I 14 STRICTLY CONFIDENTIAL