KOREA SMART GRID CONFERENCE 2016

Transcription

1 KOREA SMART GRID CONFERENCE 2016 IFC'S GLOBAL POWER SECTOR INVESTMENTS: HISTORY AND PROSPECTS RAM MAHIDHARA OCTOBER 6, 2016

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

3 Providing Development Solutions Customized To Meet Client Needs A member of the World Bank Group Provides debt and equity investment, riskmanagement, advice, resource mobilization AAA credit rating; nearly 60-year history in emerging markets Present in 100 countries 3 IFC is the largest global development institution focused exclusively on the private sector in developing countries.

4 IFC Power Sector IFC is a Leading Investor in the Emerging Markets Power Sector IFC s FY2016 Power gross commitments amounted to US$2.0 bn (9% CAGR since 2012) IFC s FY2016 Renewable Energy* gross commitments amounted to US$1.0 mn (53% of IFC Power) IFC Invests in: Generation 40,000+ MWs to date Transmission 13 investments to date, including financing of greenfield private transmission assets Distribution 36 investments to date, reaching > 160 million customers Early stage start ups in the renewable energy space Financial intermediaries (banks, PE funds) who reach smaller assets/companies Platforms, HoldCos and sub-sovereign entities with regional or global footprint Note: All Renewable Energy Generation and Energy Efficiency projects are accounted for 4 4

5 FY2016 Power Highlights IFC Gross Commitments of US$2.0 Billion FY2016 Commitment Activity: US$2.0 billion invested, including US$850 million for IFC s own account and US$1.1 billion of mobilization FY2016 Power Commitment Activity by Sector (incl. mobilization) FY2016 Power Commitment Activity by Region (incl. mobilization) Other (Holding Companies, Distribution) 12% Solar Generation 9% Wind Generation 13% Middle East & North Africa 24% East Asia & the Pacific 1% Sub-Saharan Africa 35% Hydro Generation 9% South Asia 15% Thermal Generation 57% Europe & Central Asia 25% Note: IFC year-end is June 30 th 5 5

6 FY2016 Power Highlights IFC Committed Balance of US$5.8 Billion FY2016 Committed Portfolio: US$5.8 billion of committed debt and equity as of June Power represents 43% of US$13.4 billion committed debt and equity in all Infrastructure Total Committed Balance by Sector IFC Power Total Committed Balance by Region IFC Power Other (Holding Companies, Utilities, EE) 4% RE via Funds/FIs/Hold Cos 9% Solar Generation 12% Middle East & North Africa 19% Latin America & the Caribbean 21% Distribution 8% Wind Generation 15% South Asia 17% East Asia & the Pacific 8% Thermal Generation 27% Biomass and Geothermal 3% Hydro Generation 22% Europe & Central Asia 20% Sub-Saharan Africa 15% Note: IFC year-end is June 30 th 6 6

7 IFC s Global Power Footprint Far-reaching experience arranging and financing complex power projects worldwide Select power projects recently financed by IPP across the globe* Europe / Middle East Turkey EnerjiSA $990 m Georgia Shuakhevi $284 m Iraq MGES Power $375 m Lender / Arranger, 2008, 2011 Lender / Arranger / Investor, 2015 Lender / Arranger / Investor, 2016 Turkey Akfen Energy $100 m Investor, 2016 Asia India Ostro Energy Pakistan China Three Gorges $180 m Lender / Arranger, 2016 $125 m Investor, 2015 Latin America Panama Honduras Penonome $300 m SunEdison $147 m Lender / Arranger, 2014 Lender / Arranger, 2014 Costa Rica Reventazon $100 m Lender, 2014 Mexico Aura Solar $75 m Lender, Arranger, 2014 Africa Bangladesh United Power $21 m Lender, 2016 South Africa Abengoa CSP $413 m Lender / Arranger 2012, 2015 Nigeria Azura $276 m Lender / Arranger, 2014 Senegal Cap des Biches Africa Region Mainstream Africa $100 m Investor / Arranger, 2015 $23 m Investor, *Amounts represent total financing committed and mobilized by IFC 7

8 IFC s Clients in the Power Sector Diverse Clients Trust IFC as a Power Sector Partner Global clients are half our business We have long-term partnerships with key clients We have been partnering with renewable energy companies expanding into emerging markets We help clients access capital at project, holdco and corporate levels and via capital markets Local clients are becoming regional / global Local power companies invest in their own country Local power companies expand into other emerging markets Local industrials expand into the power sector Our local clients are becoming a larger share of our business as market reform increases opportunities for private investment in the power sector We work with emerging renewable energy companies We have supported newly started local renewable energy firms, as they begin to build their first projects We work with sub-sovereign entities and governments to create vehicles for private participation 8 8

9 IFC s Value-Add in Power Transactions From Patient Equity to Long Term Debt Sector Expertise Country Risk Mitigation Environmental & Social Risk Management Advisory Services EQUITY Up to 20% in project or company Start-up equity / codeveloper (IFC InfraVentures) SUB-DEBT Terms tailored to meet project needs DEBT Long Maturities Tailored to Project Needs Fixed/Floating Rates, Local Currencies Flexible Amortization Profile Syndication/Mobilization from commercial banks and DFIs Deep sector knowledge gained from experience In-house Engineers: In-house Market Expertise In-house Regulatory Expertise Government Relations Neutral broker Role World Bank Synergies Partial Credit Guarantees (PCG) MIGA Coordinated approach across WBG services MIGA PRI IDA PCG Environmental and Social Best Practices Equator Principles Modeled after IFC Standards Governance Private sector perspective to governments Introductions + matchmaking Cross-border support + Sector knowledge Access to Donor Funding/Concessionary Support Coordination/Carbon Finance Programs to assist client, including: Local Supplier Development, Corporate Governance, Community Development Funding 9 9

10 Providing Development Solutions Broad Product Range in Investment Services Loans Equity - Project and Corporate Financing - On-lending through intermediary institutions - Direct equity investments (up to 20% of company s equity) - Private equity funds FY 2015: US$7.0 billion committed FY 2015: US$3.2 billion committed Trade Finance - Guarantee of trade-related payment obligations of approved financial institutions FY 2015: Average outstanding balance of US$2.8 billion Syndications Derivatives & Structured Finance Blended Finance - Capital mobilization to serve developmental needs - Over 60 co-financiers: commercial banks, fund, and DFIs - Interest rate, Currency, or Commodity-price hedges provided to clients - Credit guarantees and Structuring Advice - Concessional funds are blended with IFC s own resources to finance initiatives & achieve impact that would otherwise be unattainable FY 2015: US$7.1 billion syndicated FY 2015: US$330 million FY 2015: US$148 million committed 10 10

11 IFC s Case For Renewables Fueling Growth and Combating Climate Change Developing countries have a clear need to power economic growth and to improve the quality of life of their citizens (e.g. access to lighting and communications) Need to diversify generating sources and where possible, deploy indigenous power rather than using foreign exchange to import fuel Climate change and environmental concerns tied to use of coal, gas and oil fired power generation persist As capital costs decline, solar, wind and other forms of renewable energy present increasingly attractive opportunities for private investors in emerging markets IFC s Commitment Activity in Renewable Energy 11 3

12 IFC s Track Record in the Power Sector Regions and Projects 12 12

13 IFC s Track Record in the Power Sector Recent Award Winning Recognition from the Market The Asset 2016 Best Energy/Renewable Energy Deal of the Year Gulpur - Pakistan 2016 Best Energy/Renewable Energy Deal of the Year Tenaga Generasi - Pakistan African Banker Awards 2016 Infrastructure Deal of the Year Azura Edo IPP (nominee) 2013 Deal of the Year Umeme - Uganda Infrastructure Investor 2015 Middle East Deal of the Year Jordan Seven Sister Middle East Solar Industry Association Awards 2014 Commercial Advisor of the Year 7 Solar PV Projects - Jordan Project Finance International 2014 Global Multilateral of the Year 2013 Latin America Power Deal of the Year Alto Maipo - Chile 2013 Latin America Solar Deal of the Year San Andres Chile Infrastructure Journal 2015 Asia Pacific Hydropower Award Gulpur - Pakistan 2014 IJGlobal Middle Eastern Renewables Award

14 IFC s Track Record in the Power Sector Pioneer Investments in Asia 2015 First platform company investment with a Chinese SOE going outside its market (CSAIL, Pakistan) 2012 First smart grid investment (Kalkitech, India) 2011 India's first private transmission company (Powerlinks) 2010 First international commercial bank project financing for wind in China (CWP) Early stage equity solar investments in Thailand (SPC) 2009 Pre-IPO equity investment in partially privatized vertically integrated geothermal company, with subsequent corporate loans in the Philippines (PNOC-EDC) First grid tied solar PV investment in India (Azure) 2007 First IPPs in country (Magat Hydro - Philippines) 2006 First private small hydro in China (Zhongda) 2005 First merchant/quasi-merchant hydros in India (Allain Duhangan) Local currency: First power project in local currency by a multilateral in China (Guangzhou Development Industry Holdings, 2005) 14 14

15 IFC s Track Record in the Power Sector Recent RE Investments in Asia India IFC: INR 4.0 bn Mobilized: INR 12.0 bn May 2016 India IFC: US$32 mn Mobilized: US$82 mn Ostro Energy (India): Renewable platform company promoted by Actis, which is building two wind farms with an aggregate capacity of up to MW, in the state of Andhra Pradesh India. Actis is well-known to IFC. Together they have 8 co-investments globally across sectors with a strong pipeline of projects. Azure Karnataka (India): Three greenfield solar power plants of respectively 40 MW, 50MW & 40MW in Karnataka, India under a 25-year PPA. This project is part of a government of Karnataka solar program with a target of installing 2,000 MW of private sector solar projects by IFC has an existing relationship with Azure through equity and debt investments. Dec 2015 Jordan IFC: US$ 21.2 mn Mobilized: US$ 25.6 mn FRV Solar (Jordan): 50MW solar PV power plant developed by Fotowatio Renewable Ventures B.V. The project is amongst the four that have been awarded under Round II of the solar energy EOI process that was initiated by the government of Jordan. It follows last year s successful investments by IFC in 7 projects in the country ( Jordan Seven Sisters ), which represented 90 MW of the 200 MW capacity awarded under Round I. Feb

16 IFC s Track Record in the Power Sector Pioneer Investments in Africa 2015 First IPP in a decade in Nigeria (Azura Power) First large private hydro in Africa (Bujagali) 2014 Sub-Saharan Africa's first private integrated utility (AES Sonel, Cameroon) 2013 Sub-Saharan Africa's first utility scale solar CSP projects (Abengoa Khaxu & Khi, South Africa) Sub-Saharan Africa's first private distribution company (Umeme, Uganda) IPPs: First IPPs in Senegal (Tobene, 2014; Kounoune, 2007; and GTI Dakar, 1997), Togo (Centrale Thermique de Lome, 2009), Cote d Ivoire (Azito, 2000) and Cameroon (Dibamba, 2009) 16 16

17 IFC s Track Record in the Power Sector Pioneer Investments in EMENA 2016 First equity investment in a CCGT asset in Iraq (Unit Investment) 2015 First equity investment in Turkish power sector (Gama Enerji) First privately financed grid connected solar PV projects in MENA, innovative structuring approach to simultaneously close seven separate deals (Seven Sisters program, Jordan) 2013 First private distribution company in Pakistan (Karachi Electric) 2012 First internationally financed wind IPP in Pakistan (Zorlu) 2011 First transborder power export project from Georgia to Turkey (Paravani) First wind project financed under a market based support mechanism (EDPR Romania) 2009 First wind farm project financings in Bulgaria (AES) First international commercial bank project financing for wind in Turkey (Rotor Elektrik) First hydro IPP in Pakistan (84MW Laraib) First electricity disco privatization in Jordan (EDCO) 2008 First merchant plant financing in Turkey (Enerjisa) 17 17

18 IFC s Track Record in the Power Sector Pioneer Investments in Latin America 2015 The largest wind farm in Central America (Penonome, Panama) First private wind farm in Jamaica (BMR Wind) Largest solar PV plant in Latin America and largest merchant solar PV plant in the world (Luz del Norte in Chile) 2013 First utility scale solar PV project in Mexico (Aura Solar) First IPO of a Brazilian private power company (CPFL) 2011 Landmark geothermal project financings in Nicaragua (San Jacinto) First wind farm project financings in Mexico (Eurus and La Mata-La Ventosa) Merchant HPP: First merchant/quasi-merchant hydros in Chile (2007 Hidromaule and 2005 La Higuera) IPPs: First IPP in Mexico (Merida III, 1998) Transmission: Lender to first privatizations in Peru (ISA, 2002), Bolivia (TDE, 2002) and Chile (Transelec, 2003) Local currency: First power project financing in local currency by a multilateral in the region (Brazil) 18 18