REPIN and GEEREF Renewable Energy Platform for Institutional Investors and
Global Renewable Energy and Energy Efficiency Fund
Leveraging Private Sector Investment in Climate Finance
Mobilising Institutional Investment in Africa
Stockholm, 22.10.2014
22 October 2014
EIB and Climate Action
 EIB is the EU’s long-term lending bank set up in 1958
by the Treaty of Rome, headquartered in Luxembourg
 EIB shareholders are the 28 EU Member States
 Largest multilateral lender and borrower in the world
 Lending in 2013: EUR 71.7bln
 ~400 projects annually in more than 160 countries
 More than 25% of total EIB lending goes towards
Climate Action
 In 2013 EUR 19bn (signed loans) in Climate Action
 Almost EUR 100bn of financing worldwide during 2008
– 2013
 More than 50 in-house environmental specialists
European Investment Bank
2
REPIN: Main objective
Key elements
Main objective
 Create more
RE deal flow
 Focus is on
refinancing of
commercial
bank debt
1
Lower cost of capital to improve RE project bankability:
provide commercial lenders with ‘guaranteed exit’ and
remove refinancing risk premium from equity
2
Free commercial lending capacity for further RE
investments
3
Enable institutional investors with varying risk/reward
profiles to acquire mature long-term RE assets
Ultimate goal: simultaneously stimulate deal flow and engage
institutional investors to increase overall RE financing
European Investment Bank
3
REPIN: Concept
Renewable Energy Platform for
Institutional Investors (REPIN)
Institutional
Investors
for example:
for example:
for example:
Banks
Straight pass-through of loans
from a project or portfolio
Pension
funds
Equity
provider
Issuance of notes from a loan
portfolio
Insurers &
re-insurer
Other
sponsors
Securitisation of loan
portfolio(s)
Other
asset
managers
RE debt
provider
 Sell loans/cash
flows from
operational
projects to freeup capital
 Projects need to
meet minimum
standard
 Sets minimum standards (technical, legal)
 Aggregates & brokers RE loan portfolios
 Offers transaction vehicles that meet institutional
investors’ different risk/reward expectations
→ All vehicles could be structures with or without
credit enhancement
 Monitors & manages loan portfolios (potentially with
assistance of initial debt provider)
European Investment Bank
 Enter into
purchase
transactions
meeting different
risk/reward
expectation
4
REPIN: Potential roles of EIB and co-sponsors
RE debt
provider
Renewable Energy Platform for
Institutional Investors (REPIN)
Institutional
Investors
for example:
for example:
for example:
Banks
Straight pass-through of
loans from a project or
portfolio
Pension
funds
Equity
provider
Issuance of notes from a
portfolio
Insurers
& Reinsurer
Other
sponsors
Securitisation of loan
portfolio(s)
Other
asset
manager
Service
provider(s)
 Due diligence
 Project
risk/rating
 Project /loan
monitoring
 Credit
enhancement
(if required)
Financial
intermediary
 Structuring/Arranging
 Credit enhancement
Insurer/ Reinsurer
 Insurance
 Warranty protection
 Underwriting of REPIN
(if required)
 Sets eligibility requirements for
operational projects
 Helps sourcing projects/portfolios
 Develops eligibility requirements
with investors
 Provides quality assurance
European Investment Bank
5
GEEREF: Strategy overview
Strategy
• Fund of Funds: investing in Fund vehicles
Sectors
• Renewable energy (hydro, solar, wind, biomass and geothermal)
• Energy efficiency (waste heat, energy management, cogeneration)
Geographies
• Developing countries and emerging markets
Stage of projects
• Mainly greenfield with total CapEx of ~ EUR 30-40m
Target fund size
• EUR 50 to 150m, GEEREF commitment: EUR 10m to 20m
Public investors
• EUR 112m from EC, D and NOR plus;
Private investors
• Receive priorities on reflows and preferred hurdle
• Family offices, Pension funds, HNWI, targeting further EUR 112m
Status
• Operational, 7 fund commitments signed, completing fundraising
European Investment Bank
6
Current GEEREF portfolio
As at Q1-2014
Fund
Regions
First close
Sector
# of projects/companies
Evolution
Southern Africa
Jul-08
RE
12 (wind, hydro)
REAF
India,
Philippines
Dec-09
RE
9 (wind, solar, hydro)
Frontier
East Africa
Aug-11
RE
5 (hydro)
EELAF II
Latin America
Jan-12
RE/EE
1 (EE)
Armstrong SE Asia
Aug-12
RE
2 (Solar PV)
MSEF
Central America
May-13
EE
0
Visum
Eastern Europe
tbd
RE
0
Total
29
7
Regions covered
8
GEEREF follows a triple bottom line
focussing on:
Climate change impact – Planet
• CO2 emission avoidance
• Bringing more RE generation capacity on stream
• Enhancing EE
Social impact – People
• Increasing access to energy and electricity
• Creating sustainable employment
Financial sustainability – Profit
• Generating market- and risk-adequate returns
• First exits and reflows for investors already achieved
• Promising portfolio of underlying RE projects built and
first generating revenues
9
Thank you for your attention!
 For more information please contact:
Christopher Knowles
Head
Climate Change & Environment
Operations Directorate
c.knowles@eib.org
Gunter Fischer
Senior Investment
Manager –GEEREF
Operations Directorate
g.fischer@eib.org
European Investment Bank
100, boulevard Konrad Adenauer
L-2950 Luxembourg
European Investment Bank
10
Annex
22 October 2014
Rationale for REPIN

Need to overcome “chicken and egg” dilemma:
developers lack investment signals while institutional
investors lack suitable products for RE investments

Guaranteed access to refinancing should stimulate more
deal flow

Institutional investors have interest in long-term, stable
and index-linked cash flows from operational RE
projects
Regulatory changes (Basel III & Solvency II) should lead
to shorter debt tenors and earlier RE refinancing
requirements


Aggregation of projects and standardisation can
streamline approval process and reduce transaction cost

Technical support required to structure suitable
investments and reduce knowledge gaps
REPIN
REPIN bridges between short-term lenders and long-term institutional
investors
European Investment Bank
12
Next steps
1
2
3
4
Validate concept with market professionals
(on-going)
Identify a group of institutional investors that
have an interest to continue the dialogue
Identify (a) sample portfolio(s) to develop
potential structures (real/dummy)
Structure first pilot transactions to prove
concept
European Investment Bank
13
GEEREF has a specific focus on Africa:
Fund commitments:
• First focused sustainability fund in Africa signed
• Next investment currently in closing
• Currently Northern Africa/MENA fund under consideration
• Plan for commitment to at least one other fund in Africa
Fund commitments:
• More than half of current underlying portfolio projects in Africa
14
Portfolio construction and pipeline
GEEREF intends to build a diversified portfolio of 14 Fund commitments
REAF
Armstrong
India PV
Follow-on
I
Africa
Evolution
Frontier
SSA RE
Follow-on
II
Latin America
EELAF II
MSEF
Visum
CEE RE
Asia
Eastern Europe
MENA
Fund
XIV
MENA RE
Commitment
Approved
Earmarked
Pipeline
15
GEEREF leverages substantial amounts
Total equity and debt invested into Regional Funds’
projects
Regional
Funds
GEEREF
X
X
Key
A Shares
B Units
Equity
Debt
€10m
€200m
€1,400m
€9,500m
16
GEEREF is actively fundraising and
structures new compartment
Fundraising:
• GEEREF team is actively fundraising
• First close December 2013 with private investors
• Fundraising open until Q3/2014
New compartment envisaged:
• Interesting dealflow outside of classical GEEREF focus
• Mostly: offgrid RE access to energy: solar lanterns, SHS
• Interesting complement to GEEREF
• Higher return and risk than classical GEEREF
17
Key investment themes
Renewable energy
demand growth
• 1,600 GW additional capacity to 2035
• $3,144bn investment needed
Energy efficiency gains
• National policies to reduce energy intensity by up to 66% by 2035
• Up to $5,000 billion investment opportunity
Maturing private equity
markets
• Doubled to over 10% of global investment in last decade
• Strong investment performance vs. comparables
Compelling downside
protection
• Highly diversified portfolio across 150 projects
• Preferred return mechanism significantly enhances risk / reward profile
18
GEEREF team
Cyrille Arnould
Head of GEEREF
Dr Gunter Fischer
Mónica Arévalo
Principal Officer
Investment Officer
Jenia Ganzen
Mervin Chaumiere
Dirk Roos
David Walker
Legal
PJ
Senior Advisor
Nicolas Panayotopoulos
Monty Howard
Ioannis Tsakiris
Legal
PJ
Senior Advisor
19
Structure
B Units: Private Investors
A Shares: Public Sponsors
EC
LP
€74m
Norway
€14m
EC
LP
€74m
Germany
€24m
EC
LP
€74m
EU
€74m
Subscription
Agreements
SIF Board of Directors
Umbrella SIF
(European Initiative on Clean, Renewable Energy, Energy Efficiency and Climate Change
related to Development SICAV, SIF
GEEREF
Front Office
GEEREF Investment Committee
GEEREF compartment
20