Partnering and Financing Opportunities for Biogas Projects in Developing and Emerging Countries Clemens Findeisen Consultant for Development Cooperation German Biogas Association Berlin, October 14th, 2013
Overview o Background: Development Cooperation and Private Sector Development o Institutions of the German Development Cooperation o Energy and Biogas overview o Partnering and Financing Instruments o Cases from the Biogas sector
Collaboration: Private sector and development cooperation Private Sector objectives Development Cooperation objectives
Engagement in Developing and Emerging Countries 2012 worldwide 260 Billion USD official development assistance (ODA) foreign direct investment 700 Billion USD
Institutions of the German Development Cooperation Contractor Execution Technical Cooperation (political and technical advice, Capacity Development/Training, Colocation of development workers & experts via: GIZ, CIM, BGR, PTB, as well as Sequa (education and training, business membership organizations) Financial Cooperation and Promotion of private Investments via: KfW Entwicklungsbank and KfW IPEX-Bank as well as DEG (Dt. Investitions- und Entwicklungsgesellschaft)
Kfw group: A bank with a wide array of functions 10
The International Activities of KfW Degree of market maturation and target market portfolio and new businesses Entwicklungsban k Degree of market maturation Very early phase Early phase Mature phase Target market Developing country Emerging market Industrialised country KfW Entwicklungsbank DEG KfW IPEX-Bank Portfolio and new businesses 2012 28,5 bn EUR 4,9 bn EUR 6,0 bn EUR 1,3 bn EUR 61 bn EUR 13,4 bn EUR Source of funds Budget and market funds Market funds Market funds
GIZ Services for Energy Project portfolio: 140 activities in 40 countries Volume of orders: 490 million Yearly turnover: 110 million ongoing biogas components
Some GIZ energy Programms with biogas components o Brazil: Diffusion of climate friendly Biogas Technologies (BMZ, 2013 2017) o Turkey: Resource-efficient and Climate-friendly Use of Animal waste (BMU, 2010 2014) o China: Optimization of Efficient Biomass Utilization (BMZ, 2009 2013) o India: Emission-neutral Rural Energy Supply Programme (BMZ, 2009 2014) o Bangladesh: Programme for renewable energies and energy efficiency (BMZ, 2011 2013) o Vietnam: Support for the establishment of a renewable energy agency (BMU, 2010 2014) o Indonesia, Thailand, Vietnam, Philipines, Myanmar: PEP Renewable Energy South-East Asia (BMWi, 2012 2015) o Cambodia: Renewable energies (BMZ, 2010 2012) o Central America: Promotion of Renewable Energies and Energy Efficiency in Central America (BMZ, 2010 2014) o Chile: Expansion strategy for grid-connected renewables (with grid study) (BMZ, 2009-2013) o Serbia: Development of a sustainable Bioenergy market (BMZ, 2013-2017)
Biogas priorities in the development cooperation Middle-Tech High-Tech (Industrialized) Aim: Efficient electricity generation and feed-in to the grid Coutries: China, Philippines, Chile, Turkey Decentralized Houshold-plants Aim: Reduction of pollution / CDM and energy production for own use Countries: Brasil, China, Thailand, India Aim: Electricity generation, cooking / lighting Countries: Nepal, India, China, Kenia Increasing development / economic growth in countries and regions
Cambodia: Project implementation by SNV o BMZ-Funding of 2.2 Mio. to extend existing National Biogas Programe for household digestors (4-15 m 3 digestor volume) to four more provinces o Activities: o Construction of Biogas plant o Payment of subsidy (150 US$/plant) o Organizing of finance o Training of masons and maintenance staff and operators o Information on slurry management o CDM-Certificate generation o 2 year warantee; Quality controll on quality controll
China: Optimization of Efficient Biomass Utilization o More and more large projects are implemented in China, but the efficiency of the plants is very low. o In cooperation with the Ministry of Agriculture and the Asian Development Bank Use of bioenergy for heat and power production in the framework of technical cooperation
SINO-German Biomass Utilization Project: Optimization of Biomass Utilization Vertical Support to Biogas- DEMO Projects Horizontal Support to ADB sub-projects Component B: Capacity building, dissemination and replication for large scale biogas plants Component C: Sector policy framework Component D: Technical support to central and provincial PM for ADB Project implementation Component A: Support to 3-5 Biogas best practice demonstration projects in 2-3 Provinces Cooperation with the private sector!
Development Partnerships: Common Goals Private Sector objectives Development Partnerships Development Cooperation objectives Assurance of supply chains, market entry and expansion in developing and emerging countries Marketing of products Finding new customers and ensuring customer loyalty Corporate Social Responsibility (CSR) Improvement of local economic conditions Establishment of sustainable supply chains Mobilisation of capital and know-how Involvement of local communities in economic cycles
Areas of cooperation Development of education and training programmes: Demand / labor market oriented training with the involvement of prospective employers (in the field of agriculture: training in sustainable (ecological) crop cultivation, education in different harvesting methods, modern storage etc.) Transfer of technology: Ensuring the sustainability of technological innovations by the commercial interests of the private partner Optimisation of value creation / supply chain: Improvements to secure the success of a market-based value chain by integrating the product-specific know-how of the buyer Introduction of guidelines and standards: For example, labor standards or environmental standards Introduction of internal improvements: For example, through HIV / AIDS workplace programmes
Integrated Development Partnerships Africa Facility Fund Fragile States West Africa Ideas competitions Strategic alliances Private partner All companies (local, regional & international) African companies, international companies with a branch office in an African country Companies of the respective country, international companies with a branch office in a respective country German & European companies German & European companies Sector Direct contribution to achievement of Technical Cooperation (TC) project objectives Sectors of the target countries Ghana, Kenya, Cameroon, Tanzania, Southafrica, Tunisia Sectors of the target countries Ivory Coast, Liberia, Sierra Leone, (Guinea) Supra-regional, often entire sectors, different stakeholders Term Within project duration max. 3 years max. 3 years max. 3 years max. 3 years Contribution Up to EUR 193,000 Public share possibly more in cooperation agreements Up to EUR 193,000 Public share GIZ 50% Up to EUR 193,000 public share GIZ 50% Up to EUR 200,000 Public share GIZ 50% Acquisition Active acquisition Active acquisition Active acquisition Through ideas competition, GIZ advisory services Public share funded by TC-project Africa Facility Fund Fragile States West Africa At least EUR 750,000 Total volume GIZ 50% Active acquisition developpp.de
Sequence of a Development Partnership Step 1 Step 2 Step 3 Step 4 Step 5 Step 6 Submission of proposals* Closing date on the last day of each quarter (ideas competitions) Business solvency check Assessment of proposals according to criteria Joint elaboration of project concept Budget Concept review Finalisation of contract Implementation Payout according to progress Progress reports End of project Final report Final payment * In Strategic alliances an approval by the BMZ is required. In addition to the general criteria, there are also quantitative and qualitative criteria to be fulfilled. Typically, a cooperation agreement is chosen.
Criteria for developpp.de projects Compliance: Every development partnership has to comply with the development-policy principles of the German Government. Complementarity: Public and private contributions must be mutually complementary, i.e. cooperation must enable both partners to achieve their objectives more cost-efficiently, effectively and swiftly. Subsidiarity: Public support for the partnership measure is only given if the private partner would not otherwise implement the project and if the project is not a legal necessity. Competitive neutrality: The measure must not distort competition. Private sector's own contribution: The company has to make a substantial contribution to the measure, at least 50 percent of overall costs (public contribution fixed at 200.000 Euros) Commercial interest of the company implementing the project must be clearly recognizable
Establishment of an International Centre of Excellence of Training in Biogas and Biomass The existing pilot biogas plant for fermentation of sisal waste on the premises of KATANI Ltd. in Hale / Tanzania has been realized with a UNIDO project and Bio Energy Berlin GmbH Approach o Installation of a trainig center next to biogas plant, offering of theoretical and practical training on biogas and biomass, as well as consultancy and labratory services o Know How Transfer from the German Humboldt University (Institute of Agricultural and Urban Ecological Projects) with local universities o Sensiblisation of public and private organisations for the use of biogas Impact o Diffusion of the biogas technology in Africa, o Motivation to implement further projects 06/2009 11/2010 o Reduction of the lack of energy in Tanzania o Contribution to poverty reduction
BIOMETEC Biomethane Generation through Fiber Membrane Technology in China 012/2012 11/2015 Evonik and GIZ transfer skills and technology for the improvement of the efficiency of biogas Evonik is an expert in producing polymer membranes to purify biogas to biomethane. Hollow fibre membranes are a new technology for biogas upgrading. Approach o Evonik will supply the equipment for demonstration. Biogas plant owners and original equipment manufactures will be trained to enable the Chinese biogas sector to adopt technology. o The GIZ Sino German Project of Optimization of Biomass Utilization will provide the access to the Chinese biogas industry. Cooperation with the China University of Petroleum Beijing (CUPB) Expected impact o Selected biogas plants demonstrate the benefits from the application of the innovative fiber membrane technology. o The awareness and acceptance of the technology in the Chinese biogas sector has increased. o The output efficiency of biogas purification processes has been increased
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Clemens Findeisen Consultant Development Cooperation German Biogas Association Telefon: 0049 (0) 1763 / 17 88 290 Email: clemens.findeisen@biogas.org Internet: www.biogas.org