IFC VALUE PROPOSITION FOR CLEAN ENERGY FINANCE

Transcription

1 IFC VALUE PROPOSITION FOR CLEAN ENERGY FINANCE APPROACH & EXPERIENCE Bajame Sefa Operations Officer IFC Financial Institutions Group

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 WHAT WE DO Integrated Solutions, Increased Impact Loans INVESTMENT Equity Trade finance Syndications Securitized finance Risk management Blended finance $51.7 bn portfolio (FY14) ADVICE Firm-level advice PPP transaction advice In partnership w/world Bank, advice on broader market development and enabling environment for private sector 720 projects valued at $1.1 bn (FY14) IFC ASSET MANAGEMENT COMPANY Wholly owned subsidiary of IFC Private equity fund manager Invests third-party capital alongside IFC $6.4 bn under mgmt (FY14) 2

4 MEETING THE TWIN GOALS: IFC S COMMITMENT Ending Extreme Poverty, Boosting Shared Prosperity Building the Private Sector s Role Increasing cooperation across World Bank Group Strengthening long-term relationships with partners (clients, donors, investors, others) 3

5 IFC S PRIORITIES Long-term client relationships in emerging markets Frontier markets Local financial markets Strategic Focus Areas Climate change and environmental & social sustainability Constraints to private sector growth in infrastructure, health, education, and the food supply chain 4

6 WHAT IFC MEANS BY CLEAN ENERGY FINANCE? Energy Efficiency (EE) Investing into fixed asset to reduce energy bill of end-users through increased efficiency of energy use (15% minimal threshold) Home EE renovation loans, SME loans, Corporate EE finance etc. Renewable Energy (RE) Investing into technologies generating power or heat from renewable resources Project finance: Hydro power plants, wind, solar etc. Cleaner Production (CP) Investing into technologies minimizing waste and emissions from industrial processes and maximizing product output, including water efficiency Improved industrial processes, waste water treatment, water efficiency Other, Cross-Cutting Areas Transport - supporting close-to-zero emissions vehicles Green Buildings, ESCos, Supply-chains, general sustainability, etc 5

7 LIMITATION FACTORS FACED IN IMPLEMENTATION OF ENERGY EFFICIENCY PROJECTS Drawbacks that may turn into opportunities Unawareness of available technologies and benefits of application and also of the real economics of properly designed projects. Lack of knowledge about the process and equipment, and inability to assess (prioritize) available solutions. Lack of experience and advice during the project preparation Appraisal and consideration of projects done separately from the enterprise operation model and effects from change of technology Payback periods Financing 6 6

8 7 HOW DOES IFC SUPPORT FIS?

9 MARKET THOROUGH EYES OF PARTICULAR DEPARTMENTS Corporate Banking : Renewable energy projects Industrial plants (e.g. cement, glass, ceramic industries) Commerce / large malls, big-box store chains Efficient building construction companies District heating systems Commercial Banking / SMEs: New machinery: substitution with more efficient equipment in all sectors, manufacturers of equipment used for clean energy production, etc. Examples: ovens, air conditioners / chillers, compressors, lighting, solar heating, etc. Retail Banking: Housing Renovation Loans (multifamily or single family houses/apartments) Green Mortgages (cooperation with real estate developers + buyers) Leasing: Leasing of more efficient equipment (cogeneration equipment, PV solar panels for rooftops, machinery, production lines, hybrid fleets) Public Finance: EE/RE in Municipalities (street lighting, district heating, public buildings renovations) 8

10 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 Advisory Support to SEF Investments 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 $500M IFC invested more US$ than 2.2 $1 b billion of SEF in local investments financial institutions facilitated in the through form of sharing FI s and line of credit to support emissions reduction 62 FIs supported in 22 countries across most regions 9

11 ACTIVE SUSTAINABLE ENERGY FINANCE PROGRAMS IN ECA IFC EE ECA PROGRAMS ECA SEF PROGRAM > Residential and Industrial energy efficiency / RE > Russia, Ukraine, Belarus, Moldova, Azerbaijan, Kosovo, Serbia, RUSSIA REE PROGRAM > Residential energy efficiency MFBs /HOAs > Russia UKRAINE REE PROGRAM > Residential energy efficiency MFBs /HOAs > Ukraine ALBANIA REE PROGRAM > Residential energy efficiency single home owners > Albania Armenia SEF PROGRAM > Residential Energy efficiency single home owners and Industrial RE > Armenia 10

12 ALBANIA RESIDENTIAL ENERGY EFFICIENCY PROGRAM REE Loans disbursed 12,000 10,000 8,000 6,000 Number of loans disbursed (cumulative) 3,000 4,000 2,000 Value of loans disbursed (million US$) (cumulative) 12,000 - Dec-10 Dec-11 Dec12 Dec-13 1 st and 2 nd FI started in July rd FI started in January th FI started in June th FI joined in FY 14 11

13 CHALLENGES The macroeconomic environment continues to present significant risks to Energy Efficiency lending, as the financial slowdown has had a high impact on the overall economy, thus limiting the interest of industries to expand through borrowing. In Albania and Armenia the country specific IFC Programs running challenges of economical slowdown, low energy price, no incentive for financing Energy Efficiency and economic conditions of the population. In Balkans, the ECA SEF Program set its activities with a view that the EBRD is running a large program, funds being provided by the European Commission. In Russia, ECA SEF program may have a challenges in view of economical downturn and sanctions. In Ukraine, already stopped or undermined activities of many large enterprises and SMEs in conflict industrial regions and practically left no possibility to work in Crimea. Expansion to other ECA countries: Turkey, Belarus, Tajikistan. Activities are planned as jointly interventions of advisory and investment team. 12

14 THANK YOU! Bajame SEFA, MBA Operations Officer IFC Financial Institutions Group 13