SUPPORTING FINANCIAL INSTITUTIONS OF EUROPE AND CENTRAL ASIA IN DEVELOPING ENERGY EFFICIENCY LENDING PRODUCTS

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Poppy Garrison
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1 SUPPORTING FINANCIAL INSTITUTIONS OF EUROPE AND CENTRAL ASIA IN DEVELOPING ENERGY EFFICIENCY LENDING PRODUCTS IFC APPROACH AND EXPERIENCE In partnership with Elena Shonya Operations Officer IFC ECA SEF Program

2 IFC: PART OF THE WORLD BANK GROUP IBRD IDA IFC MIGA ICSID International Bank for Reconstruction and Development International Development Association International Finance Corporation Multilateral Investment and Guarantee Agency International Center for Settlement of Investment Disputes Loans to middleincome and creditworthy low-income country governments Interest-free loans and grants to governments of poorest countries Solutions in private sector development Guarantees of private sector investment s noncommercial risks Conciliation and arbitration of investment disputes 1

3 Integrated Solutions, Increased Impact OUR THREE BUSINESSES INVESTMENT SERVICES Loans Equity Trade finance Syndications Securitized finance Risk management Blended finance ADVISORY SERVICES Access to finance Investment Climate Sustainable Business Public-Private Partnerships IFC ASSET MANAGEMENT COMPANY Wholly owned subsidiary of IFC Private equity fund manager Invests third-party capital alongside IFC $49.6 b portfolio (FY13) $232 m (FY13) $5.5 b under mgmt (FY13) 2

4 How does IFC support FIs in SEF? Investment Advisory Services Financial Institutions Financial Product Financial institutions $$$ End users End users Vendors

5 Advisory Services Access to Finance - Increases availability and affordability of financial services for individuals and micro, small, and medium enterprises Investment Climate - Helps governments implement reforms that improve business environment and retain investments Sustainable Business - Helps clients promote sound environmental, social, governance, and industry standards - catalyze investment in clean energy/resource efficiency - support sustainable supply chains and community investment 4

6 IFC s support to Climate Change Mitigation through SEF Energy Efficiency (EE): - Investing into fixed asset to reduce energy bill of end-users through increased efficiency of energy use Renewable Energy (RE): - Investing into technologies generating power or heat from renewable resources Resource Efficiency (Ref): - Investing into technologies minimizing water, raw material, waste and emissions from industrial processes and maximizing product output

7 SEF Advisory Services- Typical activities with FIs Market Strategy Product Development Pipeline Development Result Measurement Scoping (Target clients, Target products) Product Policy Transaction Support via Tools and Resources Calculator KPIs Marketing Meeting with Clients Examples of success Champion Training MFW Staff Provide Links with vendors, suppliers 6

8 Examples of SEF investments financed by FIs Sector Potential Borrower Energy Efficient Equipment Industrial Commercial Industrial companies, SMEs and MSMEs Housing complexes operators, maintenance companies; Housing developers, Property Operators Energy efficient production lines Waste heat recovery devices Heating systems upgrades Efficient boilers and heaters Fuel switching (coal-gas, coal-biomass) Electricity peak-load control systems Cogeneration units Heating and ventilation equipment Control and metering systems Electricity peak-load control systems Air-conditioners Heat pumps, solar water heaters Municipal Municipalities, district heating companies, streetlighting operators, public buildings operators Boilers for district heating as well as for public/municipal buildings Heat exchangers, pipes for infrastructure projects Cogeneration units Complex EE projects Residential/ Retail Builders, home owners, home owner associations, individual households Solar water heaters Water-saving shower heads Solar lighting, CFL, improved cookstoves, water purifiers, efficient refrigerators, efficient HVAC units, roof/wall insulation Agriculture Farmers, Cooperatives, Supply chains Biomass/biogas digesters Drip irrigation systems Efficient agri machineries, storage facilities 7 Renewable generation Project developers, Corporates/SMEs Wastes to energy (wood waste etc.) Production of fuel, biogas, biodiesel, solar (PV and thermal), hydro and wind power

Sustainable Energy Investments via FI s Country: Mexico PFI: Vertice IFC investment: $20M line of credit for energy efficient housing Ongoing: Panama, Costa Rica, Country: Peru PFI: BBVA Banco

9 Sustainable Energy Investments via FI s Country: Mexico PFI: Vertice IFC investment: $20M line of credit for energy efficient housing Ongoing: Panama, Costa Rica, Country: Peru PFI: BBVA Banco Continental IFC investment: $30M line of credit Countries: Central/Eastern Europe FIs: Multiple banks IFC investment: $321M in lines of credit and guarantee facilities Country: Brazil FIs: Banco Real & Unibanco IFC investment: $80M credit line Countries: Jordan, Lebanon TWC, Banque Libano-Francaise, Fransabank Country: Turkey FI: Yapi Kredi Leasing IFC investment: $75M credit line Countries: Armenia, Azerbaijan, Belarus, Russia, Ukraine FIs: AmeriaBank, Bank Respublika, CBM, Center Invest, Erste, LockoBank, NBD, MDM, MTB, ProCredit, TCB, URSA IFC investment: $247M in line of credit Country: China FIs: Industrial Bank, Bank of Beijing and Shanghai Pudong Development Bank IFC investment: $275M risk sharing facilities support SE loans of more than $500M Advisory Support to SEF Investments US$ 2.2 b of SEF investments facilitated through FI s 62 FIs supported in 22 countries across most regions IFC invested more than $1 billion in local financial institutions in the form of sharing and line of credit to support emissions reduction

Russia SEF Program (2007-2013) Program results: Breakdown by sector: 12 partner Financial Institutions 272 loans disbursed Total loan amount: >$185 million

10 Russia SEF Program ( ) Program results: Breakdown by sector: 12 partner Financial Institutions 272 loans disbursed Total loan amount: >$185 million Total investment: nearly $250 million Annual energy saved: 1,805GWh Annual GHG emission reduction: nearly 500,000 tсо2 Median project amount $266K %

11 IFC experience: $289m portfolio, $46m annual energy savings SEF Credit line + Advisory RUSSIA TCB Bank USD 18 million 2011 LOCKO-Bank USD 20 million 2010 Credit Bank of Moscow USD 20 million 2010 Center-Invest Bank USD 10 million 2010 USD 4 million 2008 NBD Bank USD 8 million 2008 MDM Bank USD 50 million 2008 USD 35 million 2007 URSA Bank USD 53 million 2008 Standalone advisory SME Bank 2011 Prime Finance Bank 2009 Agropromcredit Bank 2009 Tatfondbank 2007 CO tons/year Regional experience EMENA Ukraine Erste Bank 2010 Belarus MTBank USD 10 million 2011 Armenia AmeriaBank USD 15 million 2010 Jordan Tamweelcom USD 3 million 2011 Lebanon Banque Libano- Francaise 2012 Azerbaijan Banka Respublika USD 4 million 2013 Lebanon Fransabank USD 25 million 2013

Lessons learned Center-Invest (Russia) mln. rub.

451,9 Partners: IFC, EBRD, FMO, KfW, OeEB, EDB

2 bln GHG emission reduction: 105 349 tones СО

12 Lessons learned Center-Invest (Russia) mln. rub , ,3 840,3 10,6 119,7 398,9 407,5 451,9 Partners: IFC, EBRD, FMO, KfW, OeEB, EDB Results to date: Total number of projects: Total project costs: RUB 6.0 bln Total loan values: RUB 5.2 bln GHG emission reduction: tones СО 2 per year 11 New business volume generated by FIs per 1 dollar of AS fees- $5,232

13 For any questions, please contact us! Elena Shonya Operations Officer, IFC ECA SEF Program ) Thank you! 12

IFC VALUE PROPOSITION FOR CLEAN ENERGY FINANCE

IFC VALUE PROPOSITION FOR CLEAN ENERGY FINANCE APPROACH & EXPERIENCE Bajame Sefa Operations Officer IFC Financial Institutions Group IFC: PART OF THE WORLD BANK GROUP IBRD IDA IFC MIGA ICSID International