European Hydropower Summit
Session IV-Small Hydro in Balkan Region
(Albania, Bosnia & Herzegovina, and Republic of Macedonia)
Bucharest, February 28, 2012
Dimitar Dimitrovski, Policy/Legal Specialist
Balkan Renewable Energy Program (BREP)
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IFC is a Member of the World Bank Group
Shared Mission: To Promote Economic Development and Reduce Poverty
IBRD
IDA
International Bank
for Reconstruction
and Development
International
Development
Association
Est. 1945
Est. 1960
IFC
Tirana
MIGA
International
Finance Corporation
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Multilateral
Investment and
Guarantee Agency
Est. 1956
Est. 1988
Role:
To promote institutional,
legal and regulatory
reform
To promote institutional,
legal and regulatory
reform
To promote private
sector development
To reduce political
investment risk
Clients:
Governments of member
countries with per capita
income between $1,025
and $6,055.
Governments of poorest
countries with per capita
income of less than
$1,025
Private companies in
179 member countries
Foreign investors in
member countries
- Technical assistance
- Loans
- Policy Advice
- Technical assistance
- Interest Free Loans
- Policy Advice
- Equity/Quasi-Equity
- Long-term Loans
- Risk Management
- Advisory Services
- Political Risk Insurance
Products:
What we do?
Investment Services
Advisory Services
Asset Management
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IFC Advisory Services Business Lines in Balkan Region
SBA
PPPs
IC
Sustainable
Business
Advisory
Public Private
Partnerships
Investment
Climate
Tirana
A2F
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Access to
Finance
Balkan Renewable
Energy Program
AL 2010-2015
BIH 2010-2015
Bosnia &
Herzegovina
2010-2015
Republic of
Macedonia
2012-2015
MK 2012-2015
SBA
Sustainable
Business
Advisory
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Balkan Renewable Energy Program (BREP) – Brief Description
GOAL
To fully enable creation of RE/SHPP market in Albania, Bosnia &
Herzegovina, and Republic of Macedonia;
To support development and financing of SHPPs in the three countries.
OBJECTIVES (COMPONENTS)
Improvement of existing RE regulatory framework;
Assistance to SHPP sponsors;
Assistance to financial institutions (banks).
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BREP Program Identified Stakeholders
SPONSORS
PUBLIC SECTOR
- Government,
- Agencies,
TECHNICAL SUPPORT
- Power companies,
- Manufacturing
companies,
- Municipalities.
- Engineering and
Consulting companies,
FINANCIAL INSTITUTIONS
- Local banks,
- International FIs
(IBRD, IFC, EBRD, EIB, KfW).
- IFIs Advisory Services
and Technical Assistance.
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Why do we support different stakeholders?
Support to Public Stakeholders (governments, regulatory bodies):
• To align national regulation with EU – electricity and RE;
• To fulfill obligations in accordance to Energy Community Treaty of SEE
(creation of regional electricity market);
• To increase transparency of concessions granting procedure
(credibility).
Support to RE Sponsors:
• To increase “bankability” of projects;
• To decrease collateral requirements;
• To reduce technical and commercial risks.
Support to Local Banks:
• To make predictable cash flow analysis;
• To reduce loan’s regulatory risk;
• To create conditions for project financing.
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Regulatory Framework Improvement
MAIN ACTIVITIES
General
• In-depth research of existing framework;
• Regional knowledge and best practice exchange;
• Alignment with EU/Energy Community Treaty requirements.
Specific
• Developing/Improvement of feed-in tariff systems;
• Improvement of PPA with “take-or-pay” clause integration;
• Full implementation of “step-in” rights;
• Improvement of SHPP sponsor selection criteria.
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Assistance to SHPP Sponsors
MAIN ACTIVITIES
General
• B2B matchmaking events in cooperation with
chambers of commerce;
• Regional knowledge and best practice exchange.
Specific
• Cross-check of existing SHPP designs;
• Workshops on SHPP design and modern technologies;
• Support to the concessionaire (sponsor) associations;
• Providing tools and advices on SHPP projects bundling.
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Assistance to Financial Institutions (FIs)
MAIN ACTIVITIES
General
• Country level assistance to financial institutions;
• Regional knowledge and best practice exchange.
Specific
• Development of SHPP financing manual;
• Development of template for SHPP cash-flow projections;
• In-depth support for selected FIs;
• Case studies to promote SHPP investment by FI sector.
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Outline of IFC’s IS Investment Products
Financial Products - From Equity to Debt
Equity
Mezzanine /
Quasi Equity
Senior Debt
& Equivalents
•
•
•
•
•
•
Corporate and JV
Typically 5-15% shareholding (not to exceed 20% of total equity)
Long-term investor, typically 6-8 year holding period
Not just financial investor, adding to shareholder value
Usually no seat on board
Infraventures (early equity investments)
•
•
•
•
Subordinated loans
Income participating loans
Convertibles
Other hybrid instruments
•
•
•
•
•
•
Senior Debt (corporate finance, project finance)
Fixed/floating rates, US$, Euro and local currencies available
Commercial rates, repayment tailored to project/company needs
Long maturities: 8-20 years, appropriate grace periods
Range of security packages suited to project/country
Mobilization of funds from other lenders and investors, through
cofinancings, syndications, underwritings and guarantees
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Results to Date?
Legislative package in Albania and in Federation of BIH in adoption
procedure:
• RE Law;
• Concessions Law;
• Standardized Concession Contract;
• Standardized PPA and Standardized Grid Connection Agreement.
Database of promising SHPP sites in Albania on sell.
Ongoing discussion with FIs in Albania, Bosnia & Herzegovina, and
Republic of Macedonia for RE dedicated credit lines.
IFC Investment Services committed its first investment in equity in
SHPPs in Albania.
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IFC’s Balkan Renewable Energy Program Team Contacts
BREP Program Manager
Bosnia & Herzegovina
Nebojsa Arsenijevic
Dzenan Malovic,
E-mail: narsenijevic@ifc.org
BREP Technical Specialist
E-mail: dmalovic@ifc.org
Albania
Bajame Sefa,
Denis Mesihovic,
BREP Finance Specialist
BREP Client Relationship Specialist
E-mail : bsefa@ifc.org
E-mail : dmesihovic@ifc.org
Republic of Macedonia
Dimitar Dimitrovski,
BREP Policy/Legal Specialist
E-mail : ddimitrovski@ifc.org
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