project financing options - giz
TRANSCRIPT
Project Financing Options for
Biomass and Biogas Energy Projects in the Philippines
PEP Informationsworkshop
Joachim Schnurr, GFA ENVEST
Berlin, June 2012
The Financing Advisory Instrument of BMWi’s EnEff & RE Export Initiatives
Modul 1: National and International
Financing Support
Modul 2: Financing Support
by German Institutions
Modul 3: Carbon Finance
Modul 4: Matching and
Innovative Financing Concepts
Target Group: German Trade Delegation Members and potential Business Partners in the Host Country
BMWi‘s Financing Advisory Instrument
Tools and Methods: Study on Financing Mechanisms • Presentation • Counselling
Modul 1:
International Financing Support for
Renewable Energy Projects
International Support Instruments Examples of financing support instruments and programs
USAID’s Green
Technology Ini5a5ve
CTI’s Private Financing Advisory Network
ADB’s Clean Energy Program
EIB Energy
Efficiency and Renewable Energy Loan
World Bank Clean
Technology Fund
GEEREF Global EnEff and RE Fund
Interna'onal
The Climate Technology Initiative’s Private Financing Advisory Network - CTI PFAN -
Problem: Lack of sufficient Public Funds to make an impact on Technology Transfer for Climate Change
Need for an Involvement of the Private Sector PFAN seeks to bridge that Investment Gap Acts as a broker between the money and the projects Strengthens the capacity of the project developers to present their projects
in a way that investors and financiers can readily understand ASEA One Power Corporation
Banga, Aklan, the Philippines Project Type: Biomass Investment Secured: USD 30 million Energy Capacity: 12 MW GHG Mitigation: 40,000 tons/year
Solutions Using Renewable Energy (SURE) Rosario, La Union Province and Cagayan de Oro, Mindanao, the Philippines (2 projects) Project Type: Biomass Investment Secured: USD 16.6 million Energy Capacity: 6.8 MW
CTI PFAN Services
Modul 2: Support
by German Institutions
Overview – German Support Instruments Various financial and technical support instruments available to foster Renewable Energy investments
Energy Efficiency Project / Investments with German par'cipa'on: • technology export • or direct involvement
Export & Trade Finance
Investment Support
Export Credit Agency
Project Support Instruments: • PPP projects • Feasibility Studies • Climate Partnerships with private sector
Export Finance – Buyer Loan Main lending instrument in export business is the so-called buyer loan
Exporter
Export Finance Bank
Importer / Buyer
Local / Importer’s
Bank
1. Export Contract
2. Loan Agreement
3. Export Goods or Services
4. Export Contract Payment 5. Loan
Repayment
Usually covered by an export guarantee provided by official export credit insurance
KFW IPEX – Export Financing
Target Group & Eligibility
• German Exporters and Foreign Buyers of German Exports – Goods and Services • Financed are exports insured via HERMES Credit Cover (not condi5onal) • Substan5al propor5on of German technology and service
Terms and Condi5ons
• Loan volume up to 25 Mio. EUR / max. up to 85% contract value • Individual, case-‐by-‐case decision on interest rates • Maturity: minimum 4 years
KfW IPEX-Bank provides project finance and offers trade and export finance.
Applica5on • Applica5on for Supplier Credit at every German Bank Ins5tute • Applica5on Buyer Credit turn to KfW IPEX-‐Bank GmbH E-‐Mail: info@kfw-‐ipex-‐bank.de Internet: hap://www.kfw-‐ipex-‐bank.de
Small Ticket Europe
• Export Finance for Small and Medium Companies • Small Export Loans 0.5 to 5 Mio. EUR with maturi5es ranging from 2 to 5 years • Informa5on: [email protected]
AKA Export Finance Bank Customized financing and processing of international trade-finance transactions
Buyer and Supplier Credit: • Up to 85% of project costs • Loan volume >500.000 EUR • Medium to long-‐term maturity • Semi-‐annual instalment
AKA Bank: [email protected]
Advantages for the exporter: • Immediate payment on delivery • Costs of financing to be borne by the buyer
Advantages for the importer: • The export transac5on is supported by an aarac5ve financing proposi5on • Long term financing for low volume transac5ons • Preserva5on of local credit limits
Export Credit Cover Euler Hermes Export Credit Cover protects German Exports against payment defaults and cash losses, due to: Political Risk and Economic Risks
Eligibility
• Export of goods and services and structure financing / project financing • None-‐marketable, but jus5fiable risks abroad • Special focus on small and medium enterprises • No minimum export value
Terms and Condi5ons
• Variable maturity – for energy efficiency, renewable energies up to 18 years • Flexible redemp5on payment possible – e.g. annuity • Administra5ve fee + premium • Premium depends on country ra5ng, credit period, creditworthiness of buyer
Export Credit Cover Instruments:
Manufacturing Risk Cover
Supplier Credit Cover
Buyer Credit Cover
Construc5onal Works Cover
Cover of Project Financing and Investments
Guarantees
Contact: Phone +49 (0)40/8834 9000 • Email: [email protected]
DEG – Deutsche Investitions- und Entwicklungsgesellschaft mbH
A partner for German private-sector companies investing in developing and emerging-market economies.
Project-‐specific mezzanine finance
Variable equity par'cipa'on in the company in the investment country – minority stake with clearly defined exit strategies
Long-‐term loans between 4-‐10 years maturity, max. 25 Mio. EUR
Guarantees – e.g. risk sharing with local bank
DEG Instruments
Contact: Phone: +49(0)221 4986-‐0 – Email: [email protected]
DEG – Financing of Feasibility Studies
Target Group
Financial Support
Requirements
Applica5on
SMEs located and opera'ng within the EU with a turnover of up to 500. Mio EUR
DEG provides a up to 50% of the feasibility study cost’s – upper limit 200.000 EUR
Prepara'on of realis'c private sector investment – plausible in terms of successful implementa5on and profitability
Further informa'on and applica'on form www.deginvest.de -‐ Phone: +49 (0)221 4986 1128 – Email: [email protected]
DEG uses funds from the Federal Ministry for Economic Cooperation and Development (BMZ) to co-finance feasibility studies
Modul 3: Carbon Financing
• Allowing the Annex I countries to meet part of their GHG reduc5on commitments using "Cer5fied Emission Reduc5ons“ (CERs) from GHG reduc5on projects in Non-‐Annex I countries • CDM allows to realise emission reduc5on cost effec5vely -‐ wherever it is cheapest globally • CDM s5mulates sustainable development and emission reduc5ons, offers industrialized countries flexibility in how they meet their emission reduc5on targets
Carbon Financing – Clean Development Mechanism Based on the Flexible Mechanisms of the Kyoto Protocol: Instruments to Co-Finance Sustainable Energy Investments (GHG mitigation)
CDM – Clean Development Mechanism
CDM in the Philippines A potential co-financing instrument, BUT…
Current Kyoto Mechanisms applied a]er 12/2012 but capitalisa'on of CERs problema'c → e.g. EU intends to only allow CERs of Least Developed Countries
Unclear Climate Regime and mechanisms post 2012 → new mechanisms under nego5a5on allow for new marke5ng op5ons for emission
reduc5on units
Uncertain CER price development
Carbon co-‐financing in general possible post 2012 but considerable risks involved
South Africa‘s Grid Emission Factor: 0.65 t CO2/MW → co-‐financing poten5al GHG mi5ga5on projects: ≈ 0.65 US-‐$ cent / KWh (5% of energy price)
Modul 4:
Innovative Financing Instruments
Innovative Financing Approaches based on CDM Emission Reduction Purchase Agreement (ERPA): Mitigate risk of CER capitalisation • CERs as equity to attain further financing
Project Owner / SPV with low equity
Finance Ins5tu5on
Renewable Energy Project
CER Buyer with good credit ra5ng
Loan
Equity & Loan Sale of CERs via ERPA
CERs
ERPA as security
enables project to raise further loans
Thank you for your attention ! GFA ENVEST Joachim Schnurr +49 40 60306 800 [email protected] www.gfa-envest.com