How KASIKORNBANK Plans to Support Green Projects

Transcription

1 How KASIKORNBANK Plans to Support Green Projects Clean Power Asia April 2013, Bangkok Thongchai Kangvanchai KASIKORNBANK Pcl. 1

2 Content Government s Policy of Promoting Green Energy KBank s Green Financing Initiatives and Support for Green Energy Evaluation of Green Project Financing Potential and Examination on Critical Factors 2

3 AEDP Development to Low Carbon SocIety Budget to Support R&D Alternation Energy Development Plan (AEDP: ) Support Investment of Private Sector and Community Target on Using Renewable Energy at 25 % of Total Energy Consumption by 2021 New Energy Solar Wind Hydropower Plant Bio Energy Bio Fuel Tidal Wave Geo thermal 2 MW 1 MW 3 MW 2,000 MW 1,200 MW 3,200 MW Mini Micro Pumped Storage 324 MW 1,284 MW 1,608 MW Bio mass 3,630 MW Bio gas 600 MW 4,390 MW MSW 160 MW Etha nol 9 ml/d Bio diesel 5.97 ml/d New Energy Replacing Diesel 9 ml/d 44% Replacing Oil Source: Alternative Energy Development Plan

4 Current Status of Renewable Energy in Thailand Current capacity to AEDP target in 2021 MW 4,000 3,500 3,000 2,500 2,000 1,500 1, Wind Solar Biomass Small hydro Biogas MSW 17% (5 proj) Total 2,893 MW 1, , % (162 proj) Total 2,311 MW , % (103 proj) Total 4,011 MW 326 1,797 1,697 3,630 Total 29 MW 1% (6 proj) 1, % (87 proj) Total 336 MW 29% (17 proj) Total 366 MW Wind Solar Biomass Small Hydro Biogas MSW AEDP Target in 2021 Current Capacity PPA signed Accepted by EGAT / MEA / PEA Proposed to EGAT / MEA / PEA Remark: Current capacity as of 31 Dec 2012 from EPPO and KBank s estimates Source: Energy Policy and Planning Office (EPPO), Ministry of Energy ( and KBank 4

5 Content Government s Policy of Promoting Green Energy KBank s Green Financing Initiatives and Support for Green Energy Evaluation of Green Project Financing Potential and Examination on Critical Factors 5

6 KBank s Continuous Support for Green Energy KBank has involved in over 600 MW Thai renewable projects during the past 5 years Financial close of SPC s solar project (5.88MW) as the 1 st largest solar farm in Thailand 2009 Arranged financing for Solarta project (34.25MW) Arranged financing for SPC s solar projects (17.64MW), with involvement from IFC as lender Acted as FA and MLA to First Korat Wind and KR2 wind projects (207MW) Acted as MLA for SunEdison solar projects in Thailand (26.40MW) 2011 Arranged syndicated loan for SPC s solar projects (53.04MW) Acted as FA and MLA for Solarco solar projects (57MW), cofinancing with ADB Acted as FA for Theppana wind project (6.9MW) - Involvement of ADB as first wind project in Thailand Acted as FA and MLA to NED SPP solar project (55MW), together with ADB Arranged financing for SPC s solar projects (11.76MW) 2012 Arranged syndicated loan for SPC s solar projects (82.32MW) Financial close for IFEC Green solar projects (10MW) 6

7 KBank s Green Financing Projects Solar Power Company Limited Group Syndicated Loan THB 13,385.8 m USD 4 m. Mandated Lead Arranger Facility and Security Agents Natural Energy Development Co., Ltd. Syndicated Loan THB 5,379.4 m. Lead Arranger Financial Advisor June 2010 Solarta Company Limited Syndicated Loan THB 3,300 m. Mandated Lead Arranger Facility and Security Agents June 2011 SPP Company Limited Group Syndicated Loan THB 2,455 m. Mandated Lead Arranger Facility and Security Agents 2011 IFEC Green Power Plus Co. Ltd Syndicated Loan THB 735 m. Mandated Lead Arranger Facility and Security Agents Jul 2012 Solarco Company Limited Syndicated Loan THB 3,960 m. USD 35 m Financial Advisor Arranger April 2013 K.R. Two Company Limited Syndicated Loan THB 4,856 m. Mandated Lead Arranger Financial Advisor Facility Agents November 2011 First Korat Wind Company Limited Syndicated Loan THB 5,277 m. Mandated Lead Arranger Financial Advisor Facility and Security Agents July 2011 Theppana Company Limited Syndicated Loan THB 407m. Financial Advisor March 2013 Nam Theun 2 Power Comany Limited Syndicated Loan Baht 20,000 m. USD 500 m. Financial Advisor, Lead Arranger, Facility Agent March 2005 Theun-Hinboun Power Co., Ltd. Syndicated Loan THB 13,940 m. Mandated Lead Arranger October 2008 Sahagreen Forest Company Limited Biomass Project Baht 640 m. Sole Lender June

8 Content Government s Policy of Promoting Green Energy KBank s Green Financing Initiatives and Support for Green Energy Evaluation of Green Project Financing Potential and Examination on Critical Factors 8

9 Project Parties and Contractual Arrangements Project finance involves several project parties and contractual arrangements Sponsors / Developers Debt Providers Contractors Shareholders Agreement Credit Facility Agreement Project Advisors EPC/ Construction/Supply Agreement Project Advisors Reports Legal Technical Insurance Policy Power Purchase Agreement Insurance Envi Insurer O&M Agreement ISDA Power Offtaker O&M Contractor Hedge Provider 9

10 Evaluation of Green Project Financing Successful transactions are underpinned by comprehensive evaluation of project financing potential that covers all key areas for each type of projects 1 Project Sponsor / Developer 2 EPC Contractor 3 Project Advisors 4 5 Revenue O&M Contractor 6 Project Feasibility 7 Financial Review / Financing Plan Supply / Resource 8 Technology 9 Licenses / Permits / Land Use Rights / Regulatory Approval 10 Environment / Social Management 10

11 Evaluation of Green Project Financing - General Key Evaluating Factors Project Sponsor / Developer Experience and financial strength of sponsors / developers Long term commitment with significant equity stake EPC / Construction Reputable EPC contractor with direct experience and strong financial stability Fixed price, turn key and date certain EPC contract Appropriate delay LD and performance LD Project Advisors Experienced advisors with know-how and expertise in that type of projects Assist in due diligence and evaluate the viability of the projects Risks mitigation from technical, legal, environmental and insurance aspects 11

12 Evaluation of Green Project Financing - General Key Evaluating Factors Revenue PPA from EGAT / MEA / PEA Tariff, Adder, FIT O&M Contractor Experienced operator with proper O&M programs, manuals and budget management Long term O&M contract with proper guarantee and compensation Appropriate insurance program Financial Review / Financing Plan Appropriate capital structure for structuring debt sizing, tenor and debt service Cash flow projection and sensitivity analysis Covenants and reserve accounts 12

13 Evaluation of Solar Projects - Resource 7 Supply / Resource Potential on solar radiation evaluated from robust and reliable data sources would enhance viability of projects MJ/m 2 /day Source of Solarmap 2010 (info: ): Department of Alternative Energy Development and Efficiency (DEDE), Thailand Irradiance data sources and selection criteria e.g. terrestrial or satellite, short or long term, etc. will affect the precise estimation of irradiance and energy yield. Irradiance and energy yield assessment by technical advisor would ensure the potential of the projects and debt serviceability. Example of irradiance data source DEDE Terrestrial DEDE Satellite MeteoNorm NASA SSE 13

14 Evaluation of Solar Projects - Technology 8 Technology Proven track record of technology, design and economic life of equipments and creditability, experiences and financial strength of supplier are one of key concern in lender s due diligence Solar panel In project financing due diligence on technology of solar module, below points are key concerns of lenders Track record of technology and performance Reliability, diversification on revenue generation, and financial strength of manufacturers / supplier Warranty terms including period of product warranty and output warranty, compensation (repair / replace), etc. 14

15 Evaluation of Wind Power Projects - Resource 7 Supply / Resource On-site wind resource data collected over sufficient period is required for determination of wind energy yield at different confidence levels Sources of wind resource data mainly include Wind map: Nearby meteorological station On-site meteorological masts Various confidence levels of wind energy yield based on turbine layout then determined Source: Department of Alternative Energy Development and Efficiency 15

16 Evaluation of Wind Power Projects - Technology 8 Technology Track record of wind turbine and credibility of supplier are key considerations in the area of technology for wind projects Strong track record of wind turbine key for long-term performance Profile of wind turbine suppliers (financial strength, corporate strategy) key to ensure validity of warranty and guarantee terms Product warranty and performance guarantee in line with industry standards key for project financing 16

17 Evaluation of Wind Power Projects - Legal 9 Licenses / Permits / Land Use Rights / Regulatory Approval Type of land permitted to be used for wind projects is crucial for the success of the project development Type of land at project site ALRO/ Forestry land In case of ALRO land, compensation for land users Under AEDP, one of strategies to promote renewable energy is amending laws and regulations not beneficial to renewable energy Regulations for request on land use for wind project Request for exemption of 1B area with no forestation left and difficult to restore to be used for wind project Construction Permit Source: Alternative Energy Development Plan Distance between adjacent wind farms 17

18 Evaluation of Biomass/MSW Projects - Supply 7 Supply / Resource Supply risk is very key for biomass projects which needs to be mitigated through welldesigned contractual structure, careful study of suppliers and supplied materials Contractual structure to secure supply Term of contract, minimum supply level, penalty terms, etc. Profile of suppliers (financial strength, risk diversification, track record) Factors affecting level and quality of supply (e.g. weather) Study of characteristics and calorific values of supplied materials 18

19 Evaluation of MSW Power Projects - Legal and Environmental Aspects 9 Licenses / Permits / Land Use Rights / Regulatory Approval Joint Venture Act plays a key role in development of MSW projects MSW projects cooperate with government agency If investment in project from private and government reaches or exceeds THB 1,000 million, it is subject to Joint Venture Act 10 Environment / Social Management Environmental and social impacts have to be carefully assessed and minimized in compliance with laws and standards Environmental Impact Assessment (EIA) Initial Environmental Examination (IEE) Public participation Public relation with local communities 19

20 "Green Building" at Chaeng Watthana The Chaeng Watthana Building is the third building of the Bank s Main Offices to be categorized as a green building, which has been designed and constructed in a manner consistent with environmental standards established by the Leadership in Energy and Environmental Design (LEED). LEED was developed by the U.S. Green Building Council (USGBC), an environmental organization that supports and provides knowledge under the concept of sustainable design in the United States. The building s construction and improvements also adopted standards of the Thailand Energy & Environmental Assessment Method (TEEAM), which are design guidelines and assessment of energy-saving and environmentally-friendly buildings. Architecture under the green building concept involves characteristics that are simple, yet creative, outstanding, elegant, energysaving, and sustainable. Exterior glass is insulated and laminated, a new technology preventing heat from entering the building. The glass is self-cleaning, in order to combat dust and filth; and it is anti-reflecting, so surrounding areas will not be affected by glare. The building s interior has been designed with the concept of openness in order to make use of natural light for internal areas, to reduce electric light use and increase ventilation to assist the standard air conditioning system. Thus, the entire building is comfortably cool and consumes less energy. To save even more energy, all of the building s electric lights are energy-saving LEDs. 20

21 THANK YOU 21

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