UNDA RENEWABLE ENERGY ESCWA PIPELINE PROJECTS

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1 UNDA PROJECT ON PROMOTING RENEWABLE ENERGY INVESTMENTS FOR CLIMATE CHANGE MITIGATION AND SUSTAINABLE DEVELOPMENT UNDA PROJECT CLOSING WORKSHOP: Renewable Energy UNDA project conclusions and way forward December 2017, Beirut - Lebanon Economic And Social Commission For Western Asia / United Nations Economic Commission for Europe UNDA RENEWABLE ENERGY ESCWA PIPELINE PROJECTS Hebron Municipality/ Hebron Electric Utility - Palestine RE6: 1 MW Solar Energy project - distributed RE7: 1 MW Solar Energy project Ground Mounted RE8: MSW Gas Generation: 1000KW (Solid waste plant) Mr. Abdel Ra uof Sheikh Samih General Manager Hebron Electric Power Company

2 ESCWA provided technical assistance for 3 RE Projects developed by Hebron Electric Utility for Hebron Municipality Palestine : RE -P6, RE- P7 and RE- P8 RE-P6: 1 MW Solar Energy project - distributed RE-P7: 1 MW Solar Energy project Ground Mounted RE-P8: MSW Gas Generation: 1000KW (Solid waste plant) Page 2

3 RE-P6 PALESTINE 1 MW Solar Energy project in Hebron, West Bank, Palestine involving installation of roof top PV on Industrial, Commercial and Residential buildings. The project is initiated by Hebron Electric Power Company. The aim is to reduce the bills paid to the electricity supplier to Hebron and supply part of the electricity from RE sources. The main beneficiary will be the Municipality of Hebron Page 3

4 Page 4 UN Development Account Project PV Solar roof top project: covers open roof tops of: Residential buildings and houses in Hebron City mainly those who are near Israeli settlements. Total number of houses benefiting from the project: 100 houses of 3 kw each Total number of industrial customers benefitting from the project: 20 sites of 20 kw each Total number of commercial building benefitting from the project: 15 of 20 kw each All these projects to be connected to the grid individually via Net Metering on the LV system Total power =1 MWp

5 RE- P6 Page 5 UN Development Account Project Assumptions Discount Rate 8% Exchange rate ($/LC) 0.28 Installed capacity 1 MWp Annual production 1500 MWh Annual degradation 0.5% Net production 1500 MWh Depreciation period 15 year OPEX in % of investment 3% % of investment $ LC Project cost 1,500,000 5,357,143 Tariff $/MWh LCOE $/MWh Finance scenarios 5% equity 95% grant 5% equity 45% loan 50% grant Loan interest 1.25% 1.25% Loan tenor - Year Grace Period -Year 1 IRR on total investment 137% 4% Cum disc year 20 in $ 891, ,318 min DSCR

6 RE- P6 Income statement USD 5% equity 95% grant 5% equity 45% loan 50% grant Net electricity generation (MWh) 28,617 28,617 Electricity consumed for own uses 28,617 28,617 Tariff 1 Revenue (Bill saving) 2,833,069 2,833,069 Tariff 1 Expenditure 2,400,000 2,400,000 Operating expenses 900, ,000 Depreciation 1,500,000 1,500,000 Operating income 433, ,069 Financial expenses 63,281 Total expenditure 2,400,000 2,463,281 Net income before taxes 433, ,787 Page 6

7 ESCWA Project Name RE6 Financing Equity Soft Loan Grant Interest rate Loan duration reimbursement period per year Grace period Net income before taxes IRR project (based on total investment) 5% 95% 0% 6% - 7 to 15 Years 4 per year 5 Years 943,840 21% Amend 1 5% 0% 95% Amend 2 5% 45% 50% 5% 25% 70% 15 Years 4 per year 1 Year -239,040 3% 15 Years 4 per year 1 Year -465,045-2% HEPCO Financing Equity Soft Loan Grant Interest rate Loan duration reimbursement period per year Grace period Net income before taxes IRR project (based on total investment) 5% 95% 0% 6% - 7 to 15 Years 4 per year 5 Years -1,728,752? Amend 1 5% 0% 95% 15 Years 4 per year 1 Year 433, % Amend 2 5% 45% 50% Page 7 5% 25% 70% 15 Years 4 per year 1 Year 369,787 4%

8 RE-P7 PALESTINE 1 MW Solar Energy project in Hebron, West Bank, Palestine: Installation of ground mounted PV South of Hebron near waste water treatment plant. The project is initiated by Hebron Electric Power Company. The aim is to reduce the bills paid to the electricity supplier to Hebron and supply part of the electricity from RE sources. The main beneficiary will be the Municipality of Hebron Page 8

9 RE- P7 Page 9 UN Development Account Project Name PV Solar Power, 1MW ground mounted Country Palestine Organisation Hebron Electric Power Company Assumptions Exchange rate ($/LC) 0.28 Discount rate 8% Installed capacity 1 MWp Annual production 1500 MWh Annual degradation 0.5% Net production 1500 MWh Depreciation period 15 year OPEX in % of investment 3% % of investment $ LC Project cost 1,500,000 5,357,143 Tariff $/MWh LCOE $/MWh Finance scenarios 5% equity 95% grant 5% equity 25% loan 70% grant Loan interest 1.25% Loan tenor 15 Grace period 1 IRR on total investment 137% 3% Cum disc year 20 in$ 891, ,251 min DSCR 3.29

10 RE- P7 in USD Income statement 5% equity 95% grant 5% equity 25% loan 70% grant Net electricity generation (MWh) 28,617 28,617 Electricity consumed for own uses 28,617 28,617 Tariff 1 Revenue (Bill saving) 2,833,069 2,833,069 Tariff 1 Expenditure 2,400,000 2,400,000 Operating expenses 900, ,000 Depreciation 1,500,000 1,500,000 Operating income 433, ,069 Financial expenses 35,156 Total expenditure 2,400,000 2,435,156 Net income before taxes 433, ,912 Page 10

11 ESCWA Project Name RE7 Financing Equity Soft Loan Grant Interest rate Loan duration reimbursement period per year Grace period Net income before taxes IRR project (based on total investment) 5% 95% 0% 3% - 7 to 15 Years 4 per year 5 Years 1,017,963 24% Amend 1 5% 0% 95% Amend 2 5% 45% 50% 5% 25% 70% 15 Years 4 per year 1 Year -239,040 3% 15 Years 4 per year 1 Year -364,598 0% HEPCO Financing Equity Soft Loan Grant Interest rate Loan duration reimbursement period per year Grace period Net income before taxes IRR project (based on total investment) 5% 95% 0% 3% - 7 to 15 Years 4 per year 5 Years -1,254,940? Amend 1 5% 0% 95% 15 Years 4 per year 1 Year 433, % Amend 2 5% 45% 50% Page 11 5% 25% 70% 15 Years 4 per year 1 Year 397,912 3%

12 RE-P8 PALESTINE 1 MW MSW Gas Generation project South of Hebron, Yatta Landfill in Hebron, West Bank, Palestine involving installation of gas collection system for the gas produced from the landfill and gas engines to generate power. The project is initiated by Hebron Electric Power Company. The aim is to reduce the bills paid to the electricity supplier to Hebron and supply part of the electricity from RE sources. The main beneficiary will be the Municipality of Hebron. Page 12

13 RE- P8 UN Development Account Project Name Country Organisation MSW Gas Generation of 1000 kw Palestine Hebron Electric Power Company Assumptions Exchange rate ($/LC) 0.28 Discount rate 8% Installed capacity 1 MW Annual production 3000 MWh Annual degradation 0 Net production 3000 MWh Depreciation period 15 year OPEX in % of investment 3% % of investment $ LC Project cost 2,250,000 8,035,714 Page 13 Tariff $/MWh LCOE $/MWh Finance scenarios 16% equity 84% grant 16% equity 84% loan Loan interest 2.00% Loan tenor 15 Grace period 1 IRR on total investment 10% 2% IRR on equity 75% 55% Cum disc year 20 in $ 2,226,264 1,054,637 min DSCR

14 RE- P8 Income statement in USD 16% equity 84% grant 16% equity 84% loan Net electricity generation (MWh) 60,000 60,000 Electricity consumed for own uses Tariff 1 60,000 60,000 Revenue (Bill saving) 6,600,000 6,600,000 Tariff 1 Expenditure 3,600,000 3,600,000 Operating expenses 1,350,000 1,350,000 Depreciation 2,250,000 2,250,000 Operating income 3,000,000 3,000,000 Financial expenses 359,100 Total expenditure 3,600,000 3,959,100 Net income before taxes 3,000,000 2,640,900 Page 14

15 ESCWA Project Name RE8 Financing Equity Soft Loan Grant Interest rate Loan duration reimbursement period per year Grace period Net income IRR project (based on before taxes total investment) 5% 95% 0% 3% - 7 to 15 Years 4 per year 5 Years 2,218,135 55% Amend 1 16% 0% 84% 15 Years 4 per year 1 Year 8,035,714 10% Amend 2 16% 84% 0% 2% - 7 to 15 Years 4 per year 1 Year 6,753,214 2% HEPCO Financing Equity Soft Loan Grant Interest rate Loan duration reimbursement period per year Grace period Net income IRR project (based on before taxes total investment) 5% 95% 0% 3% - 7 to 15 Years 4 per year 5 Years -1,501,576? Amend 1 16% 0% 84% 15 Years 4 per year 1 Year 3,000,000 10% Page 15 Amend 2 16% 84% 0% 2% - 7 to 15 Years 4 per year 1 Year 2,640,900 2%

16 Link to UN DA project: Economic And Social Commission For Western Asia / United Nations Economic Commission for Europe THANK YOU FOR YOUR ATTENTION