Leasing companies and Sustainable Energy investment
– a plethora of exciting business opportunities
IFC experience in Europe, Middle East, and North Africa regions
Prague
January 1-3, 2012
IFC
•
Sustainability
•
Additionality – advisory with focus on creating own internal
capacity
•
Member of the World Bank Group – political risks mitigation
•
Efficiency - compare to other Development Institutions
•
IFC is the largest global development institution (182 member
countries), focused on the private sector in developing
countries, working in their frontier regions - 20-30% of
portfolio, investment portfolio in Russia - $2.24 bln
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IFC Sustainable Energy Investments via FIs
Country: Russia,
Ukraine,
Belarus,
FIs: 12 Financial
Institutions
IFC investment:
$185M in credit
lines
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
credit line
Countries:
Central/Eastern
Europe
FIs: Multiple
banks
IFC investment:
$321M in lines of
credit and
guarantee
facilities
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
Country: Turkey
FI: Yapi Kredi
Leasing
IFC investment:
$75M credit line
Country: Brazil
FIs: Banco Real &
Unibanco
IFC investment: $80M
credit line
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Key Takeaway from IFC experience
in Europe, Central Asia, and Middle East and North Africa regions
•
There is a HUGE market for Energy Efficiency leasing finance
•
Market is DIVERSE – many niches
•
Niche LEADERSHIP possible
•
IFC provides funding and/or guarantees + Advisory Services
•
COMPETITIVE EDGE in new markets
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Dispersed resource
• Achieving 45% energy efficiency potential in Russia would
cost USD 320 billion
• Energy Efficiency Potential (WB study):
Manufacturing industry: $37 billion
Housing and utilities sector : $43 billion
Power sector: $106 billion investments annually
• Developing economies need $97 billion in SEF annually *
New business opportunities for banks and leasing
companies: financing of energy and resource
efficiency projects in SME and corporate sector
* Source: McKinsey Global Institute 2008
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Sustainable Energy Finance Project
A capital investment resulting in improvement against baseline:
• Energy Efficiency (EE): Decrease in per unit (and/or total) energy
consumption
• Clean Energy (CE): More access to energy with less impact on the
environment (including renewable sources)
• Cleaner Production (CP): Increase in material yield, reduction in
emission of waste and hazardous substances
A repair/upgrade,
replacement of equipment units,
expansion of facilities
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Key Benefits for Financial Institutions
• Expanded market share through new business line:
• Innovative product/first mover advantage
• Sell on value to customer, not pricing
• Monetize existing client base, attract quality new clients
• New marketing channels through vendor partnerships
• Improved risk profile of portfolio:
• Energy cost savings as a part of cash-flow
• IFC risk sharing products
• Positive social and environmental impacts:
• Enhanced brand reputation, PR opportunities
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For Informational Purposes Only
Russian experience
• 12 partner Financial Institutions
• 250 projects / $213M worth financed
• Annual energy savings over $35M
• Annual energy consumption down by 1674GWh
• Greenhouse gas emission down by 450 000 tСО2 per year
• Median project amount $300K ($900 average)
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5
33
68
Energy and
Utilities
32
Construction
9 7 12
8
Food
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Chemical and
Plastic
Work with Financial Institutions
RUSSIA
Investment + Advisory
Standalone Advisory
EMENA
Regional expansion
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EE/RE Leasing Features
All types of Leasing Companies can benefit
from Partnership Opportunities
Partners can be:
Benefits under our terms:
• Many types of equipment may be
financed
• Equipment Manufacturers
• Product Retailers
• No minimum or maximum size
• Installation Contractors
• Can be utilized in all sectors
• Electric and Heat Distribution
• Equipment may be reused
(co- generation, large boilers,
Companies
industrial processes)
• Engineering Consultants
• New marketing channel through
• Marketing and Sales
new vendor partnerships
Representatives
• Energy Services Companies (ESCOs)
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EXAMPLES
CONFECTIONARY FACTORY
 Process equipment: new
automatic chocolate line
 Investment: $233,000
 Energy cost reduced: 33%/unit
 Payback: 2 years
 Improved product quality,
increase in output capacity
SUNFLOWER OIL PRODUCER
CAR MANUFACTURING PLANT
 Renewable energy: boiler
 Lighting system retrofit:
fueled by sunflower seed
husks
new automatic lighting
management system
 Investment: $1,100,000
 Gas savings: 660,000
m3/month of gas per
month ($39,000/month)
 Payback: ~2.5 years
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 Investment: $300,000
 Savings: $100,000/year
 Payback: 3 years
 Improved quality of lighting
EXAMPLES
YAPI KREDI LEASING
CO-GENERATION
Turkey (‘09-10)
BOILERS MANUFACTURING
PLANT
 Energy equipment: new gas piston
 Process equipment: bending
 Process equipment light industry
cogeneration machine
 Investment: $50M IFC loan
 Investment: $2,4M
 Energy cost reduced: 36%/unit Energy consumption per unit of
 Projects: 39
output down: 33%
 Median project amount: $315  Annual energy savings: $637 000
($700 average)
 Payback: 2 years
 Financed: $28M
 Improved product quality,
 Improved product quality,
increase in output capacity
increase in output capacity
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machine + plasma cutting
system to make gas boilers
 Investment (leasing):
$194,000
 Savings: $235,000/year
 Payback: < 1 year
 Improved quality
Contacts
Europe and Central Asia Region
IFC Advisory services :
Maxim Titov
Program Manager
Russia Sustainable Energy Finance Program
Tel: +7 (495) 411 7555 mtitov@ifc.org
Elena Shonya
Deputy Program Manager
Russia Sustainable Energy Finance Program
Tel: +7 (495) 411 7555 eshonya@ifc.org
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For Informational Purposes Only
Eligibility Criteria
• Eligible transaction must be a project to finance reconstruction, renovation
or refurbishment
• Financing may be in the form of sub-loans/leases, aimed at investing into
fixed assets and decreasing energy consumption of the borrower or utilizing
renewable energy
• Financing for new projects, not refinancing of an existing loan/lease
• Eligible are projects such as:
• Generic equipment (HVAC, lightning, compressors, etc)
 Energy savings per unit (ESU)
≥ 15%
• Process equipment
 Energy savings per unit (ESU)
≥ 15%
• Cogeneration (CHP)
 Heat utilization
≥ 60%
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For Informational Purposes Only
What are Sustainable Energy Finance Projects?
Sector
Potential Borrower
Energy Efficient Equipment
Industrial
Industrial companies, SMEs
and MSMEs
•Energy efficient production lines
•Waste heat recovery devices
•Heating systems upgrades
•Efficient boilers and heaters
•Fuel switching (coal-gas, coal-biomass)
•Electricity peak-load control systems
•Cogeneration units
Commercial
Housing complexes
operators, maintenance
companies;
Housing developers
•Heating and ventilation equipment
•Control and metering systems
•Electricity peak-load control systems
•Air-conditioners
•Heat pumps, solar water heaters
Municipal
Municipalities, district
heating companies,
streetlighting operators,
public buildings operators
•Boilers for district heating as well as for
public/municipal buildings
•Heat exchangers, pipes for infrastructure projects
•Cogeneration units
•Complex EE projects
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