PPPs in Renewable Energy: IFC Advisory Perspective. April 2012

Transcription

1 PPPs in Renewable Energy: IFC Advisory Perspective April 2012

2 IFC s Role Financing IFC is the world s largest multilateral provider of financing for private enterprises with over US$26 billion in outstanding investment commitments TA & Advisory Services IFC also provides technical assistance and advice to governments and businesses Enterprise Assistance Environment & Social Sustainability PPP Transaction Advisory Business Environment Loans Equity Guarantees Access to Finance 2

3 IFC Activities in the Power Sector Transaction Advisory in Renewable Energy Case Studies 3

4 Investments in the power sector Other, 12% Geothermal, mal, 2% 2% Commitments (USD bill) (1967- June 2009) Distribution, 10% Transmission, 4% Wind, 6% Hydro, 23% Coal, 22% Oil, 7% Gas, 14% Committed deals by number (#) Other power Renewables % of total 67% 50% 6 44% 40% 22% FY 05 FY 06 FY 07 FY 08 FY 09 70% 60% 50% 40% 30% 20% 10% 0% -10% Overall Commitments: US$ 6.1 bn Since 2005, financed more than $2.3 b in RE 4

5 Sector Chain Usual Types of Private Sector Participations (incl. Selected IFC Advisory examples) Select PPP Advisory Projects in Power Sector Generation (GENCOS) Transmission (TRANSCOS) Distribution (DISTCOS) Consumption IPP (BOT/BOO) IFC s role: Advisor to Governments for introduction of Private Sector Participation in the construction, operation and/or management of power sector assets Country Project type Status India 5 MW urban rooftop solar PV Awarded 2012 Indonesia 2,000 MW thermal IPP Awarded 2011 Maldives Solid waste with WTE Awarded 2010 Liberia Utility management contract Awarded 2010 Philippines Distribution concession Awarded 2010 Albania Distribution concession Awarded 2009 Albania 50 MW hydro IPP Awarded 2008 Philippines Off-grid IPPs (multiple) Awarded Cameroon 56% privatization of utility Awarded

6 IFC Activities in the Power Sector Transaction Advisory in Renewable Energy Case Studies 6

7 PPP Advisory in Renewable Energy On-going and potential generation projects in wind, solar PV, hydro, biomass and geothermal Focus also on T&D to improve efficiency and reduce GHG emissions Using PPPs in certain sectors (eg. Geothermal, solar, biomass) is pioneering, especially in emerging markets Transaction advice includes Feasibility studies and project preparation Transaction structuring (documentation, credit enhancements) Procurement of PSP IFC advises primarily on competitively tendered projects to: Maximize transparency and competition Establish benchmarks for setting and adjusting feed in tariff (FiT) Achieve improvements over FiT (where relevant)

8 Solutions Characteristics Sector-specific Issues and Solutions Hydro Wind Biomass Solar Geothermal Established technology Geotechnical / hydrology risks Long development time Construction arrangements Dams offer baseload E&S issues Established technology Economics very site specific Feasibility studies Intermittent generation Dependent on suitable regulatory support Technology risk varies (combustion/gasif ication) Long-term access to low cost fuel essential Opportunities for co-firing and cogeneration PV costs declining rapidly CSP w/ storage offers potential for low cost base load Potential for grid and distributed generation Detailed feasibility Established and cost competitive baseload technology High exploration risks and long lead times to develop steam fields Detailed feasibility Support robust feasibility studies Allocation of geotechnical & hydrology risk Bankability to support long loan tenors Bundling for small hydros Managing E&S issues, strong ESIA Support FS Supporting projects in new markets & new regulations Structuring to support intermittent generation & merchant risk Supporting supply chain expansion Structuring fuel supply agreements to enable project finance and grid sales Enable feedstock aggregation business Mitigating technology risk through fuel treatment Supporting projects in new markets and new regulatory regimes Coordinating concessionary funding to buy down costs Supporting supply chain expansion to reduce costs Structuring and allocating early exploration risks Sector expertise and innovative structuring to enable project financing Early stage equity and concessionary funding to share 8 exploration risk

9 IFC Activities in the Power Sector Transaction Advisory in Renewable Energy Case Studies 9

10 Ashta Power (Hydro IPP) IFC appointed as Lead Advisor by Albania s Ministry of Economy, Trade and Energy (2007) Two projects: Unbundling and concession of Albanian Electricity Company ( KESH ) distribution business Structuring and implementing a PSP transaction in hydropower through competitive bidding HPP: IFC responsible for thorough due diligence, PPP project structuring & selection of private sponsor September 2008: Government signed the concession agreement with Austrian company Verbund for a 50 MW HPP Verbund to invest Euro 166 million for project construction It will hold concession for 35 years PPP structure : Design Finance Build Own Operate Transfer (DFBOOT) Winning bidder selected Straflomatrix technology, a modular solution for low head projects Cascade coordination agreement to manage hydrology risk World Bank PRG to backstop offtaker payments 10

11 Case Study Rooftop Solar PPP Project in India Client Need IFC is assisting Govt. of Gujarat to implement a pilot 5MW grid connected distributed rooftop solar project in Gandhinagar on a PPP model (Gujarat aims to establish 500MW solar capacity in the State) Demonstrate technical, commercial and regulatory viability and sustainability of rooftop solar projects. Project Structure Project involves installation of 5MW rooftop/distributed solar capacity in the city of Gandhinagar Government Buildings & Private Buildings and Homes City split into two concession areas Private developers to finance & install solar panels on residential/commercial building roof-tops (on a rental/lease basis) and sell power to local grid. Status Project awarded to two lowest bidders one for each area Bid price significantly lower than prevailing feed in tariff Pilot Project has potential to reduce ~ 6000 tons of CO2 equivalent annually IFC appointed to replicate in four more cities in Gujarat 11

12 Olongapo Distribution (Philippines) Olongapo City 230,000+ residents, Subic Freeport Zone high demand for power Olongapo City directly owned and operated the distribution network Serious technical problems (recurring outages, high system losses) System loss: 26.5% - 35% (normal: 9.5%) Lost revenue from system losses: US$3 million per annum. IFC appointed as TA in Dec 2007 to introduce PSP to Rehabilitate, upgrade, expand, maintain, manage and operate the distribution system Improve current collection efficiency & collection of past receivables Reduce system losses Result: Winning bidder: CEPALCO (Cagayan Electric Power and Light Company), a local power distribution utility Contractual obligations towards reduction of system losses and collection improvement Monitored Key Performance Indicators with financial incentives Annual GHG reduction of 8,500 tons CO2 12

13 13 Thank you

14 14 Additional Cases

15 Case Study Ganhekou Wind Farm 8, China Project First international PF deal in China s wind energy sector Awarded 2010 Renewable Deal of the Year for Asia Pacific by PFI Sponsors China Wind Power Group 201 MW capacity, average production of 454 GWh/year Reduces China s use of coal and 421,000 tons CO2 per annum Project cost of $249 m IFC financing of $45m on own account and syndication of $95m from international commercial banks 15

16 Case Study Totoral Wind Farm (46 MW), Chile Project Sponsors Norvind SA (SPV of Statkraft Norfund Power Invest and local partner Centinela) 23 2 MW Vestas wind turbines for total capacity of 46 MW Average production of 110 GWh/year for sale to central grid Chile s first project-financed wind farm First renewable project to be financed under new Nonconventional Renewable Energy Law of 2008 IFC financing of $30.8m on own account and syndication of $30.8m Project will benefit from CDM revenue Help Chile to diversify its fuel mix 16

17 Case Study Husk Power Systems, Mini-grids in India Client Need IFC made an equity investment in Husk Power Systems (HPS), a biomass-based mini-grid company operating in Eastern India HPS currently has some 50 plants in operation, targeting unelectrified villages of households in agricultural areas where low-value rice-husk waste products are used as a fuel source to fire their mini-grids Support provided In addition to the investment, IFC is helping HUSK to scale-up the business and reach their target of 1,000 systems by providing technical assistance on a refined operating model (e.g. MIS) Status/Expected Impact The demonstration effect of the profitability of an innovative minigrid concept, and scalability of the business model, potentially providing sizeable investment opportunities 17

18 Case Study Thin Film 5 MW Solar Plant in India Client Need Support (concessional financing and advisory services) the largest grid connected solar thin film plant in India. Supported replication of similar projects in the Indian market following construction of the power plant in Tamil Nadu, India. Support provided Advisory support on project management, ESS and quality management and documented lessons learnt for dissemination Funds provided under IFC /GEF PVMTI program to support PV in India - IFC $4 million loan to Sapphire Industrial Infrastructures Limited to support the build, completion, operation and connection of the plant to the Tamil Nadu grid Loan converted into a grant at the completion and grid interconnection of the plant Status/Expected Impact The project is the first large scale, thin film solar plant of its kind in India Help scale development of the solar power sector and the thin film technology on a utility scale in India Potential to replicate and improve project 18

19 Client Need Case Study Green Power for Telecom, India MNOs and Tower Companies (in India, base station tower infrastructure is outsourced) looking to reduce OPEX of off-grid base stations currently powered by diesel for 24/7 by substituting with renewable energy Support provided Piloting of RE base stations with 2 entities (direct implementation support) RFP definition and evaluation Joint project where GSM implementing partner: Supply template PPA agreement and provide Procurement model analysis (Capex vs Opex) Indian ESCO and Vendor Mapping Resource Mapping India (solar, wind with operator network overlay) Case studies and bi-annual reports Green Power for Mobile network design tool and training Creation of pipeline for investment Status/Expected Impact 15 RE base station sites deployed as pilot projects Vendor landscaping & resource mapping reports Working Groups 130MWh generated per annum 600 Tons of CO2 GHGs per annum for pilots 19