EPORTING FROM NOVEMBER

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Victor Wilkins
5 years ago
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1 EPORTING FROM NOVEMBER

2 Context Case Studies Matching expectations, Looking ahead / / / / İSTANBUL, 5 NOVEMBER

3 INTERACTIVE: Where do you live? 1. Asia 2. Middle East and North Africa 3. Europe 4. North America 5. Latin America and the Caribbean 6. Sub-Saharan Africa Oceania Latin 7. Australia and Oceania 2% Asia America Sub- 10% Saharan Africa 14% North America 22% Total 19% MENA 2% Europe 31%

4 INTERACTIVE: What perspective do you bring? 1. Policymaker 2. Regulator 3. Civil Society / NGO 4. International Organization 5. Investor 6. Project developer Project Policyma develope ker r 14% Investor 17% 17% Internati onal Org 26% Civil Society / NGO 26%

5 GLOBAL NEW INVESTMENT IN CLEAN ENERGY ($BN) 13% $280bn 31% $247bn 1% 22% $189bn $187bn 35% $153bn $54bn 39% $75bn 51% $113bn Note: Includes corporate and government R&D, and small distributed capacity. Adjusted for re-invested equity. Does not include proceeds from acquisition transactions. Source: Bloomberg New Energy Finance / / / / MICHAEL LIEBREICH, ISTANBUL, 5TH NOVEMBER

6 TOTAL INVESTMENT IN CLEAN ENERGY In energy, a billion dollars isn t cool. You know what s cool? A trillion dollars. That s cool Source: Bloomberg New Energy Finance, Columbia Pictures / / / / MICHAEL LIEBREICH, ISTANBUL, 5TH NOVEMBER

7 NEW INVESTMENT IN CLEAN ENERGY Q Q ($BN) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q Four quarter running average Note: Total values include estimates for undisclosed deals. Excludes corporate and government R&D. Includes small distributed capacity & adjustment for re-invested equity. Source: Bloomberg New Energy Finance / / / / MICHAEL LIEBREICH, ISTANBUL, 5TH NOVEMBER

8 CROSS-BORDER INVESTMENT SHARES BY REGIONAL FLOW, 2004 H (%) 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% H Shows that investment in the South in 2011 surpassed the 25% mark North/South South/South South/North North/North Note: new build asset finance for renewable energy projects only. Investment volumes show cross-border (or foreign) investments only. Domestic investments are excluded here. Source: Bloomberg New Energy Finance / / / / MICHAEL LIEBREICH, ISTANBUL, 5TH NOVEMBER

9 EL GALLO, BULLFIGHTER It is impossible and also very difficult / / / / MICHAEL LIEBREICH, ISTANBUL, 5TH NOVEMBER

10 PRIVATE SECTOR ADAPTATION: EMERGING EXPERIENCE FROM GLOBAL BUSINESS FRANCES WAY CARBON DISCLOSURE PROJECT

11 Adaptation is a Business Issue Changing temperatures and precipitations patterns may lead to decreased availability of critical raw materials in the supply chain, especially agricultural commodities. These will lead to the increased operational cost or even disrupt the business operations along the entire value chain of Nestlé. Nestlé 2012 CDP Response

Global 500 2012 Climate Change Responses Timeframe for expected physical risk impact (number of companies) Allianz reported that in 2011 it processed $2.

12 Global Climate Change Responses Timeframe for expected physical risk impact (number of companies) Allianz reported that in 2011 it processed $2.2 billion in natural catastrophe claims (including non-weather related claims). This is the largest sum for natural catastrophes in its history. 81% of G500 respondents report physical risks (+10% from 2011) 96% have board or senior level oversight of climate change (+3% from 2011) 78% integrated climate change into wider business strategy (+10% from 2011)

13 Context Successes Matching expectations, Looking ahead / / / / İSTANBUL, 5 NOVEMBER

16 The Developer s Perspective Ouarzazate 1 CSP Project in Morocco Climate Investment Funds' Private Sector Forum Istanbul, November 5, 2012

1 What was the innovative factor in the investment? Ouarzazate 1 CSP (160MW with three hours of storage) is one of the three largest CSP projects under development in the world With only 1.

17 1 What was the innovative factor in the investment? Ouarzazate 1 CSP (160MW with three hours of storage) is one of the three largest CSP projects under development in the world With only 1.6 GW of installed CSP capacity in the world, this plant alone at 160MW will add 10% to the total installed global capacity This project has delivered a framework that has enabled International Financial Institutions (IFIs) who by charter can only lend to Governments, lend to a project structured within the framework of Limited recourse Project finance which underpins the PPP model of service delivery contracts. This has been achieved by the IFIs lending through a government vehicle; in this case MASEN (the Moroccan Renewable Energy procurement Agency) but with look through and back to back terms 17 Sunday, 04 November 2012 Ouarzazate 1 CSP Project in Morocco

4 How did the CIF funds add value to the tariff?

ratio) Tenor of debit Price of debit (interest rate) Debt Funding Leverage Tenor/ years Debt interest

project in Morocco 75/25 20 7.5% 24.5 The optimistic commercial debt funding case 75/25 20 5.5% 21.

What has CIF Funds and World Bank leadership brought to this project?

18 4 How did the CIF funds add value to the tariff? The issues on Debt funding is Liquidity/Availability of the required amount Leverage (equity / debit ratio) Tenor of debit Price of debit (interest rate) Debt Funding Leverage Tenor/ years Debt interest rate Resulting tariff US cents/kwh Likely funding from commercial sources for this very large CSP project in Morocco 75/ % 24.5 The optimistic commercial debt funding case 75/ % 21.5 IFI funding (including CIF Funds) 80/ % 18.9? What has CIF Funds and World Bank leadership brought to this project? Discounted pricing terms, (buying down the risk premium of the project) Mobilizing larger amount of funds (bringing other public sources of funding from MDBs, bilateral agencies, and government) 18 Sunday, 04 November 2012 Ouarzazate 1 CSP Project in Morocco

19 DenizBank Project Finance CIF 2012

Partnerships with IFI s and Development Banks Funding partnerships EUR 150 million MidSEFF (EBRD & EIB) USD 40 million TURSEFF (EBRD & JBIC& CTF) The objective of MidSEFF &

Cofinancing partnerships with development banks 2009 : DenizBank financed the Rotor Wind Power Plant of Zorlu Group (135 MW) in partnership with EBRD, IFC, EIB 2009 :

20 Partnerships with IFI s and Development Banks Funding partnerships EUR 150 million MidSEFF (EBRD & EIB) USD 40 million TURSEFF (EBRD & JBIC& CTF) The objective of MidSEFF & TURSEFF is to reduce Turkey s dependence on fossil fuels by financing private sector investments in mid-size renewable energy projects. Cofinancing partnerships with development banks 2009 : DenizBank financed the Rotor Wind Power Plant of Zorlu Group (135 MW) in partnership with EBRD, IFC, EIB 2009 : DenizBank participated in the financing of the Akfen HEPP portfolio (20 HEPP s with total IC 270 MW) in partnership with TSKB : DenizBank provided letters of guarantee lines for TKB for Muratlı HEPP and Kapıdağ WPP

21 Sustainable Energy Financing: TURSEFF&MidSEFF DenizBank Experience ~ 90 diversified renewable energy & energy efficiency transactions realized through TURSEFF & MidSEFF lines with over USD 100 mio loan exposure Mainly SME & commercial banking segment clients benefiting from a systematic approach: Due diligence & double checking of the technical assumptions ESAP (Environmental&Social Action Plan): Road map with concrete actions & supervision of environmental and social issues Enhanced awareness of environmental standards More Clean, Conscious and Sustainable

22 Context Successes Matching expectations, Looking ahead / / / / İSTANBUL, 5 NOVEMBER

28 CLEAN ENERGY FINANCE AND CLIMATE FINANCE STAKEHOLDERS Early R&D, Proof of Concept Demonstration and Scale-up Commercial Rollout Diffusion & Maturity Policy Investment managers (public) Sources of finance Investment managers (private) Heads of state / Legislators / Ministries (eg, energy, environment, finance) Heads of regions / Electricity regulators Development banks / Grant-giving bodies / National treasuries / Sovereign wealth funds / Export credit agencies Endowments / Pension funds / Life insurance companies / High net worth individuals and family offices Venture capital / Incubators / Private equity (companies) Private equity (projects) / Infrastructure funds Debt funds / Carbon funds Microfinance providers Hedge funds / Mutual funds Enablers and service providers Industry Investment banks / Consultants / Law firms Insurance providers / Letter of credit providers Hedging providers Rating agencies Corporations (eg, start-ups, oil and gas, utilities, technology providers) / / / / MICHAEL LIEBREICH, ISTANBUL, 5TH NOVEMBER

29 PUBLIC-PRIVATE PARTNERSHIPS: DIFFERENT STAKEHOLDERS, DIFFERENT VIEWS PUBLIC SECTOR PRIVATE SECTOR SUCCESS IS. Progress Happy constituencies Flow of funds to the developing world Profits Returns Repatriation of profits CONCERNS ARE FOCUS IS STYLE IS Fairness Political realities Measure / Report / Verify of donors $ billion scale Need to be comprehensive Restricted to imperatives Patient decade goals Sharing Qualitative Risk, risk, risk Liquidity MRV of recipients $ trillion scale Need to find opportunities Can choose among alternatives Short term annual goals Competitive Quantitative / / / / MICHAEL LIEBREICH, ISTANBUL, 5TH NOVEMBER

30 Reporting from the Private Sector Forum Matching Expectations Project Developers Investors/Le nders Regulators/P olicy Makers Market solutions Innovative Products, innovative business models Policy solutions fit regulations, long term support, consistency, entrepreneurship Financial solution Liquidity, access to capital, risk sharing, scale Landscape of financing Activities Climate investing value chain Market Transformation: Large number of small innovations or small number of large innovations Standardisation (terms & condition, PPAs, etc.)

FROM BILLIONS TO TRILLIONS:

98023 FROM BILLIONS TO TRILLIONS: MDB Contributions to Financing for Development In 2015, the international community is due to agree on a new set of comprehensive and universal sustainable development