Ifc Investment Officer

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Ifc Investment Officer Powered By Docstoc
					Solar E          Fi
S l Energy & IFC Finance
Peter A. Cook
Senior Investment Officer
Carbon Finance Unit
International Finance Corporation
March 22, 2010


Solar Business Bangkok 2010 Conference
  IFC is a Member of the World Bank Group

            IBRD                           IDA                                                        MIGA
                                                                          IFC                         Multilateral Investment
            International Bank for         International
                                                                          International Finance
            Reconstruction and             Development                                                and Guarantee Agency
                                                                          Corporation
            Development                    Association

                   Est.
                   Est 1945                      Est 1960
                                                 Est.                           Est.
                                                                                Est 1956                       Est.
                                                                                                               Est 1988


   Role:     To promote institutional,      To promote institutional,     To promote private sector    To reduce political
             legal and regulatory reform    legal and regulatory reform   development                  investment risk

             Governments of member          Governments of poorest
 Clients:    countries with per capita      countries with per capita     Private companies in 182     Foreign investors in member
             income between $1,025 and      income of less than $1,025    member countries             countries
             $6,055.
                                            - Technical assistance
             - Technical assistance         - Interest Free Loans
Products:    - Loans                        - Policy Advice               - Equity/Quasi-Equity        - Political Risk Insurance
             - Policy Advice                                              - Long-term Loans
                                                                            Risk M
                                                                          - Ri k Management t
                                                                          - Advisory Services




                   Sh d Mi i       T P        E     i D l            dR d     P
                   Shared Mission: To Promote Economic Development and Reduce Poverty
                                                                                                           2
                         Over $30 Billion Invested in Emerging Markets
                         Since 2007
                     Total committed IFC financing: US$10.5 billion
                  18.0
                                IFC's own account          Syndication
                  16.0                                                              IFC FY09 Highlights
                  14.0
U.S. $ billions




                  12.0                                                              S&P, Moody’s            AAA
                  10.0
                                                                                    Portfolio               $34 5 billion
                                                                                                            $34.5
       b




                   8.0
                   6.0                                                              Committed $10.5 billion
                   4.0                                                              Syndicated $4.0 billion
                   2.0                                                              # of companies          1,579
                   0.0
                   00                                                               # of countries          103
                         2005         2006          2007          2008   2009




         Finance up to 25% of project cost from own account
         Provide Debt, Equity and Mezzanine financing
         Long term Tenors for debt
         Variable or fixed interest rates, Loans in all major currencies
         and several local currencies
         Equity: Typically 10-15% of project company equity




                                                                                3
    IFC’s Unique Comparative Advantage
    •   Investment in renewable energy relies on suitable regulatory environments and
        support which IFC collaborates with the World Bank to help provide
          pp                                                     pp
    •   IFC has multiple investment mechanisms
         –   First-of-kind, innovative projects with important demonstration effects
         –   All stages of the supply chain (from raw materials to equipment manufacture
             to early development to project finance of installed power generation assets)
         –                                                   hydro, wind, geothermal,
             Invests in all renewable energy types (such as hydro wind geothermal
             biomass, & solar) in all developing regions of the world
    •   Several renewable energy or concessional finance facilities to which IFC has direct
        access
         –   Global Environment Facility (GEF) managed by the World Bank
         –   Climate Investment Funds – Scaling Up Renewable Energy Program (SREP)
                    d by the World B k
             managed b th W ld Bank
         –   International Development Association (IDA) managed by the World Bank
         –   Netherlands Government’s NIPP-RE program managed by IFC
         –   Earth Fund managed by IFC

4
    IFC’s Solar Strategy

    • Promote development of solar industry in emerging markets, help
        d             d ll     h i d          become competitive
      reduce costs, and allow the industry to b            ii
    • IFC investments will help scale-up the supply chain to drive down
                                            grid-parity
      the cost of solar PV energy to reach “grid-parity”
    • Investing across the solar supply chain in:
         Early t g      gi g technologies
       – E l stage, emerging t h l gi
       – Solar power generation
       – Manufacturing capacity in markets where there is suitable
         regulatory support or where solar is increasingly cost-
         competitive
             p
    • Access concessional finance to enable power projects in markets
      where solar generation is not yet inherently competitive or where
      th    is insufficient regulatory support
      there i i    ffi i t      l t          t

5
6
IFC Solar PV Manufacturing Projects


 • INDIA: $22.5 million in loans for 80 MW p.a. c-Si solar PV cell/module
   manufacturing plant with Moser Baer PV Ltd
 • RUSSIA: $25 million in loans & $50 million in equity for new
   polysilicon manufacturing plant with Nitol in which Suntech is equity
   participant
 • CHINA: up to $45 million in equity and up to $95 million in “B” loans
   for ENN Energy Co/XinAo Solar for 60 MW p.a. a-Si tandem junction
   thin-film solar PV module manufacturing plant
 • CHINA: $50 million in convertible debt for Suntech Power Company
   Holdings for its new, more efficient “Pluto” c-Si solar PV module
   manufacturing plants
 • Other deals under development in Asia & other countries
    Philippines Grid-Tied Solar Power Project
    CEPALCO – Northern Mindanao, the Philippines
    • Project type:       Grid-tied PV
    • Capacity:           1 MWe
    • Project cost:       $6 million
    • IFC Financing:      $4 million soft loan from GEF
    • Effective:          December 2002
    Project Details:
    • Owned and Operated by CEPALCO, an IFC integrated utility client in the
      Philippines
    • Operates in conjunctive use with a 7MW run-of-the-river hydroelectric power
       l t
      plant
    • First time use of conjunctive application of PV and Hydropower to convert solar
      PV power to firm, dispatchable power to overcome its limitations due to
      intermittency
    • Uses Sharp c-Si modules and has been producing 10% more electricity than
      projected
    • Designed to show effectiveness of PV in addressing distribution system capacity
      issues
8
    India Grid-Tied Solar Power Project
    Azure Power Ltd – Punjab/Gujarat, India
         j     yp
    • Project type:      Grid-tied solar PV
    • Capacity:                  5 MW
    • Project cost:              $20 million
    • IFC Investment:            $10 million in corporate equity
    • Effective:                 November 2009
    P j t Details
    Project D t il
    • Azure Power is India’s first, private, grid-connected solar IPP
           c-Si                                                     MW.
    • 2 MW c Si ET Solar (PRC) modules commissioned; expanding to 5 MW
    • Plans to develop 100 MW under Government feed-in tariffs (FITs) focused on
      promoting utility-scale PV initiatives
    • IFC long-term capital likely to attract new investors who might not invest otherwise
    • IFC combines its early stage equity investment structuring expertise to support an
      innovative start-up company
    • Project expected to contribute to development of replicable solar power generation
9     models that can be rapidly scaled up throughout India and other countries
     Thailand Grid-Tied Solar Power Project
     Development Company SPC-Korat
     • Project type:   Grid tied
                       Grid-tied PV
     • Capacity:                6 MW (Kyocera c-Si)
     • Project cost:            $21 million
     • IFC Investment:          $1.6 million in equity
     • Effective:               Second quarter 2010
     Project Details:
     • Greenfield project is one of the first of its kind in Thailand
     • Project being developed under government-sponsored solar power
       development program that promotes IPPs <10 MW in generation capacity
                                 structure, IFC s                $1 6
     • Under a 60/40 debt/equity structure IFC’s contribution of $1.6 million will
       become part of the sponsor’s total equity
     • IFC’s additionality includes leveraging World Bank experience in financing PV
       manufacturing and utility scale renewable energy projects to strengthen
       project design
10
                  g                j
Issues in financing Solar Power Projects
 Solar power tends to be more expensive than conventional sources of
 power
     Carbon finance generally insufficient to bridge the cost differential
     Feed-in-tariffs/financial subsidies needed to reach grid parity
 Absence of a well-defined tariff/regulatory framework in many countries
 Ab       f     ll d fi d     iff/    l      f       ki              i
     Majority of developing countries have zero, insufficient or new and unproven
     levels of financial support
     Concessional financing helpful to ensure economic viability
 Recent shortage of long-term financing
 Lack of sponsors with emerging market experience
 Different technologies tend to have unique strengths/risks
     Solar technology is still evolving rapidly and such developments are affecting
                                                    (i.e. c Si  vs
     project configuration and technology choice (i e c-Si PV vs. TF PV)
     Recent improvements in technology have drastically reduced levelized
     production costs affecting the relative economics of older projects
     Significant technological advances & cost reductions could lead t rapid
     Si ifi    tt h l i l d                  t d ti          ld l d to    id
     obsolescence                                                                     11
Climate Investment Funds (CIF)
– Fund of Funds
• Partnership of Multilateral Development Banks (MDBs), administered by
  the WBG
    – utilize capabilities, skills, and core processes of MDBs to deliver
      financing at significant scale to unleash the potential of the public
      and private sectors in addressing climate change
    – complement other multilateral financial mechanisms, such as the
      Global Environment Facility (GEF); provide coherence and avoid
      proliferation of multiple smaller initiatives to address Climate
      Change
    – approved on July 1, 2008; with a “sunset clause” to avoid pre-
      j dgi g a f t     tK t g
      judging future post-Kyoto agreement t


             26,                      10
• September 26 2008 pledging meeting –10 donor countries took part to
  raise US$ 6.1 billion
    – Clean Technology Fund (CTF)          US$5.2 billion
    – Strategic Climate Fund (SCF)         US$0.9 billion
Clean Technology Fund (CTF)

• Finance scaled up demonstration, deployment, and transfer of low
  carbon technologies
   – Concessional loans, grants, guarantees tailored to specific
      barriers and financing gaps
   – Thailand has an approved $300M allocation & $70M with IFC
• Supports country programs in largest GHG emitters including:
   – (i) Turkey & Mexico; (ii) Egypt & Morocco; (iii) Indonesia & the
      Philippines; (iv) South Africa, Colombia & Kazakhstan
   – RE, EE, improved transport sector efficiency and modal shifts,
      improved efficiency of energy supply
• Criteria:
   – Potential GHG emission savings
   – Demonstration potential
   – Development impact
   – Implementation potential
World Bank Group is Scaling Up
its Clean Energy Investments


 In fiscal 2009 the World Bank Group committed US$3.3
                                            countries
    billion to RE/EE projects in developing countries, a
 historic high and a 24% increase from the previous year




  IFC financing contributed >US$1 billion to this World
  B k Group total fi
  Bank G                     The B k G
                   l figure. Th Bank Group i      d
                                             intends to
 continue to substantially increase these commitments

                                               14
For more information:
    www.ifc.org
    www ifc org
         Key Contacts for IFC
                   Power/Renewable Energy
              q ,             g                  q @       g
    Mr. Ali Naqvi, Senior Manager East Asia - anaqvi@ifc.org
 Mr. Darius Lilaoonwala, Senior Manager Power/Renewables -
                                        g
                     dlilaoonwala@ifc.org
 Ms. Helen Han Investment Officer, IFC/Bangkok – hhan@ifc.org


                        Carbon Finance
                   g ,    g        g         g        g
     Mr. Vikram Widge, Program Manager - vwidge@ifc.org
 Mr. Peter A. Cook, Senior Investment Officer - pcook@ifc.org

				
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