P14 EME Africa CTI PFAN

Transcription

1 P14 EME Africa CTI PFAN West Africa Regional Coordinator Albert Boateng albert.boateng@ppl-int.com Phone : (233) Mentor Marindame Kombate kombatemarindame4@gmail.com Phone : (233)

2 P14 EME Africa CTI PFAN West Africa Regional Coordinator Albert Boateng albert.boateng@ppl-int.com Phone : (233) Mentor Marindame Kombate kombatemarindame4@gmail.com Phone : (233)

3 CTI PFAN West Africa Forum for Clean Energy Financing (WAFCEF 2) Project P14: Decentralized Rooftop Solar Photo Voltaic systems in Senegal Dr. Krishna Heeramun Technical Director 17 September 2015

4 Introduction Decentralized Rooftop Solar Photovoltaic project in Senegal Estimated 1500 systems to be installed over 2 ½ years Focus on professional consumers (85 %) Some large residential (15 %) consumers Average size 11 KWp, 17 MWp total capacity EME executed over 50 M USD projects in Electrical & Mechanical engineering in Mauritius, Seychelles and West Africa over the last 15 years.

5 Implementation structure Renewable Energy Supply Company (RESCO) model Equipment financed through offsetting of electricity self consumed Only 20 % of system cost payable Beneficiaries become owners after 10 t0 12 years The RESCO offers up to 12 year warranty, maintenance and cleaning of modules during repayment period Onus of effective production on RESCO

6 Business Model

7 Investors targeted Offer 45 % cumulative redeemable preference shares to an equity partner against 9 M Euros representing 30% of Total Investment Earning a guaranteed return of 8 % for 10 to 12 years Mezzanine finance: Debentures of 9 M Euros: 30 % of investment 6 % annual interest, Repayable within 8 years after 1 year operation. Balance 40 % debt: Impact investor for loan of 12 M Euros Repayable within 7 years, 1 year moratorium 4 % annual interest. Results based disbursement each semester over 2 years: 2.25 M Euros Equity per semester

8 Summary of Returns Maintenance of preference shares for 12 years Project IRR is 11.7 % Equity IRR is 9.6 % Maintenance of preference shares for 10 years Project IRR is 9.3 % Equity IRR is 7.8 % Guaranteed quarterly dividend payout in all cases for the preference shareholder. Low risk, long term, government guaranteed returns

9 Financial Highlights Euros YEAR 3 YEAR 10 TOTAL REVENUES 6,459,702 7,285,849 TOTAL EXPENSES 1,399,127 1,852,393 EBITDA 5,060,575 5,433,456 PROFIT AFTER TAX 458,594 2,845,190 Dividends Preference Shares 45 % 722, ,778 Ordinary Shares 55 % 100, ,942

10 Legal & regulatory framework Law on Self consumption of Renewable energy:2010 Application decree signed in Dec 2011 The Legal framework for NET Energy Metering exists The tariffs for the purchase price of the surplus exported to grid is yet to be defined. This Decentralized PV project does not require an export tariff

11 Incentive framework in Senegal Duty free facilities for solar PV for professional users With signature of Financial decree, residential users will have duty free solar PV 1 M Euros Duty component when approved will be refunded to Site Owners through electricity bill SUNREF can fund downpayment Concessionary loans and Investment grant of 10 % of loan amount We can assist customers to apply for these facilities

12 Interest of SENELEC / Government Discussions ongoing with SENELEC and regulatory Authorities in Senegal Specific Interest of SENELEC for the project: Offload capacity from weak grid areas Reduce risk of load shedding and allow additional connections Offset expensive fossil fuel generation from non interconnected grids Defer investment in infrastructure and generation capacity Installation of electronic meters will help to counter commercial loses Immediate implementation of 17 MW within existing legal and regulatory framework

13 Technology Equipment 100 % from Solarworld AG Manufacturing in Germany for the past 40 years Only fully integrated Manufacturer in Germany Procurement contract with Solarworld At very competitive prices Design Standards, quality of installation: >25 years lifetime East West orientation of PV modules for Optimum roof space utilisation Flatter production curve more compatible with self consumption

14 Client benefits Benefit from a refund of the Duty element if they qualify Become owners after repayment period at no residual cost Offsetting up to 80 % of their electricity for another 13 to 15 years based on expected minimum 25 year lifetime. Fix the cost of part of their energy consumption for 25 years

15 SWOT Analysis Strengths Full internal control on the value chain Standardised preapproved systems facilitate commissioning Results based disbursement of equity and loan Weaknesses Low Project IRR Long repayment period Opportunities Higher offset tariff possible in non interconnected grids Decentralised PV has lower impact on grid than large PV farms Threats Users do not see the long term perspective Least cost approach could lead Utility to favour coal over PV

16 Analysis, Mitigation of key risks Non payment by SENELEC to the SPV to be mitigated upfront Formal legally binding agreement Guarantee mechanisms like revolving LCs, escrow accounts and a sovereign guarantee. Risk- Mitigation measure Natural calamity: Insurance taken by SPV Non performance: Maintenance and Cleaning of system by SPV Sensitivity analysis Shows robustness business model The preference shareholder not affected because returns guaranteed

17 Critical Milestones March 2015: Factory visit to Solarworld Germany August 2015: Procurement contract signed with Solarworld Ongoing: Negotiations with SENELEC / Authorities Dec 2015: Complete Negotiations with SENELEC Sept 2015 to March 2016: Identify, negotiate and close with financial partners April 2016: Place orders and launch marketing April 2016 to June 2016: Recruitment, training of engineers, technicians and electricians. July 2016: Start installations

18 Management Team Jocelyn Philogene: CEO Entrepreneur with 25 years experience in Engineering 50 M USD Projects implemented over 15 years Dr Krishna Heeramun: Technical Director Electrical Engineer specialized in sustainable development Supply Chain specialist with 22 years experience Zaid Imrit: Finance specialist with 20 years experience Didier Philogene: Solar PV specialist with 27 years experience Local specialists to be recruited

19 Reasons to Invest, Conclusion Why Senegal? Conducive institutional and fiscal framework Potential for replication of Decentralized PV project in other West African markets. Intrinsic robustness of the business model: Distribution of risk across many clients in 3 target sectors, Front loaded risk management approach through long term government supported contracts Investment Ask: Equity of 9 M Euros: 30 % of total investment Debentures of 9 M Euros: 30 % of the total investment Debt of 12 M Euros: 40 % of the total investment

20 Thank You Dr Krishna Heeramun Director of Engineering Sustainable Development, EME WEST AFRICA ltd. Rue 6xB Point E, Dakar, Senegal krishnah@emeafrica.com Phone (office) + (221) (Mobile) + (221)