IFC s Experiences and Programs on Financing Energy Efficiency in the Building Sector. October 4, 2012 Berlin, Germany

Transcription

1 IFC s Experiences and Programs on Financing Energy Efficiency in the Building Sector October 4, 2012 Berlin, Germany

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3 Agenda 1 IFC Risk-Sharing Facility 2 IFC Russia Residential Energy Efficiency Finance Program 3

4 About International Finance Corporation (IFC) A member of the World Bank Group Promotes sustainable private sector development Three main lines of business: Investment Services Advisory Services Asset Management Company 4

5 IFC Investment and Advisory Services Unlocking Opportunities for Energy Efficiency Finance IFC Credit Lines Risk Sharing Blended Products Commercial Banks Loans HOAs & Cooperatives Housing Management Companies Advisory Services ESCOs Contractors Advisory Services 5

6 1 IFC Risk-Sharing Facility 6

7 When entering a new market of EE financing of multi-family buildings, banks may need risk-sharing mechanisms to mitigate various risks. Market for Financing of EE in Multi-family Buildings Untested market demand Untested borrower loan repayment capacity Lack of borrower collateral Market risk Credit risk 7

8 Risk-Sharing Facility Basic Elements IFC guarantees a portion of a bank s portfolio of assets On balance sheet no sale or transfer of assets Structured on a portfolio basis not on a loan-by-loan basis Bank and IFC agree on selection criteria Bank and IFC agree on servicing procedures for performing, delinquent and defaulted assets 8

9 Risk-Sharing Facility Overview IFC IFC Risk Sharing Agreement Bank Reference Portfolio Individual loans Individual loans Individual loans 9

10 Risk-Sharing Facility Potential Structure Assets Potential Losses Portfolio of loans on bank s balance sheet Bank IFC Senior Risk First Loss (provided by Bank) IFC takes direct credit exposure to loan portfolio with credit origination and decisionmaking delegated to the Bank Once the first Loss is exhausted, IFC will share the credit risk pari passu with Bank covering all principal losses 10

11 Risk-Sharing Facility Benefits to a Bank Increase capacity to originate new assets Reduce credit risk on the reference portfolio Improve risk management and operational efficiency Obtain a regulatory capital savings on the reference portfolio (subject to banking regulator approval) 11

12 Risk-Sharing Facility Example Block House Energy Efficiency Program with Raiffeisen Bank Hungary ( ) IFC Risk-sharing facility provided a 50% guarantee on Raiffeisen s block house portfolio for energy efficiency improvements. Мore than 650 projects worth about US$200 million were financed by Raiffeisen Bank covering more than 45,000 apartments in over 2,200 multifamily buildings across Hungary. 12

13 2 IFC Russia Residential Energy Efficiency Finance Program 13

14 There is a market failure in Russia with respect to bank financing of energy efficiency modernization of multi-family buildings. Majority of population in Russia lives in multi-family buildings (MFBs) Buildings are old and highly energy inefficient Residential sector is among the largest energy end-users and MFBs have a 50% energy savings potential (on average) Homeowners in MFBs have no access to bank financing for energy efficiency modernization of their buildings 14

15 Banks remain cautious about financing EE modernization in multifamily buildings due to perceived and existing barriers. Market New and untested market (market demand, profitability) Legal & Regulatory Environment Multi-family buildings (MFBs) are owned jointly and proportionally by individual homeowners: Who is the borrower? How will loans be repaid? Credit MFBs can not be mortgaged: what can serve as a collateral for a loan? 15

16 To enable bank lending for EE modernization of multi-family buildings, IFC applies an innovative approach to address market barriers. Awareness Bank Capacity Building Policy Work 16

17 Thank you! 17

18 Disclaimer This presentation was prepared by the International Finance Corporation ( IFC ) exclusively for the benefit and internal use of the recipient in order to present in general terms IFC s structured finance products. This presentation is incomplete without reference to, and should be viewed solely in conjunction with, the oral briefing provided by IFC. The presentation is proprietary to IFC and may not be disclosed to any third party or used for any other purpose without the prior written consent of the IFC. In preparing this presentation, we have relied upon and assumed, without independent verification, the accuracy and completeness of all information available from public sources or which was provided to us by or on behalf of the Company or which was otherwise reviewed by us. 18