Financing Renewable Energy Projects
Belgrade, May 2015
IFC Overview
Focus on Investment Services
Infrastructure and Natural Resources
Investing Across Infrastructure & Natural Resources
 Current portfolio: $14.8bn
 FY14 investments: $5.7bn, including $2.4bn in mobilizations
 Local presence in key markets
 Extended team covering both global giants and local leaders
Power
• Generation,
thermal and
renewable
Utilities
Transport
Infrastructure
Transport
Services
Natural
Resources
• Water, Waste
• Airports
• Logistics
• Oil & Gas
• Privatized Public
Services
• Ports
• Shipping
• Gas Distribution
• Transmission
• Roads
• Airlines
• Mining
• Distribution
• Railroads
• Rolling Stock
• Pipelines
• Integrated
Utilities
• LNG
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Infrastructure and Natural Resources
Infrastructure and Natural Resources
Overview
 Globally, IFC’s Infrastructure and
Natural Resources committed
portfolio totals to US$14.8bn; 29% of
IFC’s global portfolio. (As of June
2014)
Infrastructure Portfolio Breakdown by
Departments –Committed Portfolio – June
2014
Middle East &
North Africa
12%
Sub-Saharan
Africa
19%
Europe &
Central Asia
16%
Global
1%
 The Latin American and Caribbean
region represents Infrastructure & NR’s
largest exposure at 28%, followed by
Africa and Central and Eastern
Europe, at 19% and 16%
 Power represents the largest exposure,
accounting for 38%, followed by
Transport at 20%.
East Asia &
the Pacific
11%
South Asia
13%
Latin America
& The
Carribean
28%
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Broad Product Range in Investment Services
Loans
Equity
Trade Finance
Syndications
Structured Finance
Risk Management
Blended Finance

Project and corporate financing

On-lending through intermediary institutions

Direct equity investments (up to 20% of company’s equity)

Private equity funds

Guarantee of trade-related payment obligations of approved financial
institutions

Capital mobilization to serve developmental needs

Over 60 co-financiers: commercial banks, fund, and DFIs

Products including credit guarantees, liquidity facilities, portfolio risk
transfer, securitizations, and Islamic finance

Derivative products to hedge interest rate, currency, or commodityprice exposures of IFC clients

Combination of concessional funds with IFC resources to finance
initiatives & achieve impact that would otherwise be unattainable
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Power
Overview
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IFC is a Leading Investor in Emerging Markets Power
• > 347 power investments in over 65 countries since 1967
• We invest in:






Generation – 35,000+ MWs to date
Transmission – on a select basis
Distribution – reaching > 160 million customers
Early stage start ups in the renewable energy space
Financial intermediaries (banks, PE funds) who reach smaller assets/companies
Platforms, HoldCos and sub-sovereign entities with regional or global footprint.
• We are comfortable in markets under reform, with first-in-kind projects.
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IFC Own-Account Portfolio – IFC is active in all Regions
and all Power Subsectors
Current Committed Power Portfolio
Current Committed Power Portfolio
(As of September 30, 2014)
(As of September 30, 2014)
Total = US$ 6.3 billion
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Robust and Growing Renewable Energy Business
IFC Renewable Energy Commitments
Note: FY15* assumes H1 investments are doubled by end of FY15.
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IFC’s Value-Add in Power Transactions
From Patient Equity to
Long Term Debt
EQUITY
 Up to 20% in project or
company
 On selective basis, startup equity/co-developer
under Joint Development
Agreement
SUB-DEBT
 Terms tailored to meet
project needs
DEBT
 Long Maturities Tailored
to Project Needs
 Fixed/Floating Rates,
Local Currencies
 Flexible Amortization
Profile
 Syndication/Mobilization
Sector Expertise
 Deep sector
knowledge gained
from experience
 In-house Engineers:
can offer technical
advice and
consider new
technologies
 In-house Market
Expertise: Can
assess and
structure for
Merchant Risk
 In-house
Regulatory
Expertise: Can
assess and
structure for
Regulatory Risk
Country Risk
Mitigation
 Government
Relations
 Neutral broker
Role
 World Bank
Synergies
 PCG
 MIGA
 Coordinated
approach across
WBG services
• MIGA PRI
• IDA PCG
Environmental &
Social Risk
Management
 Advice on
Environmental and
Social Best
Practices
 Equator Principles
Modeled after IFC
Standards
 Governance
Advisory Services
 Private sector
perspective to
governments
 Introductions +
matchmaking
 Cross-border
support + Sector
knowledge
 Access to Donor
Funding/Concessionary
Support
Coordination/Carbon Finance
 Programs to assist
client, including:
Local Supplier
Development,
Corporate
Governance,
Community
Development
Funding
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Diverse Clients Trust IFC as a Power Sector
Partner
•
•
•
Global clients are half our business

We have long-term partnerships with key clients

We have been partnering with renewable energy companies
expanding into emerging markets

We help clients access capital at project, holdco and
corporate levels and via capital markets
“Local” clients are becoming regional / global

Local power companies invest in their own country

Local power companies expand into other emerging markets

Local industrials expand into the power sector

Our local clients are becoming a larger share of our business
as market reform increases opportunities for private
investment in the power sector
We work with emerging renewable energy companies

•
We have supported newly started local renewable energy
firms, as they begin to build their first projects
We work with sub-sovereign entities and governments to
create vehicles for private participation
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IFC Can Efficiently Bring Additional Capital to
the Table to Complete a Financial Plan
• IFC can bring the entire financing
package to the table
• Between 2008-2014, we have mobilized
over US$ 5.9 billion for power
investments from commercial lenders
and DFIs
 Equity:
 Asset Management Company: Can
match IFCs own account equity into
LP’s, US$ 6.3 billion AUM as of June
2014
 Debt:
 MCPP: US$ 3 billion, can co-lend up
to 75% of IFC investment
 Syndication: Parallel or B Loans
• IFC was lead arranger for landmark power
transactions, including:
– ChinaWindpower (China) – Wind project finance.
US$95 million mobilized in 2010; first wind
power deal financed entirely by an international
banks in China.
– Eurus (Mexico): Greenfield wind power. US$375
million from 10 lenders committed 2010; first
debt-financed private wind project in Mexico.
Committed in 2010.
– Enel Wind Brazil (Brazil): US$300 million senior
debt package for Enel Green Power’s Brazilian
subsidiary, with financing directed at 340MW
wind capex program. Committed in 2014.
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IFC Can Bring Concessional Financing
• IFC can mobilize concessional funds from donors to support clean energy/renewable energy projects
that cannot proceed on fully commercial terms but could help move markets towards commercial
viability in the medium term
Fully
Commercial
• Concessional funds are always invested alongside IFC’s own funds and can provide financing on softer
terms by offering lower pricing, longer tenor, lower rank or security, depending on project needs
Requires subsidy
Area of Focus
Lower risk commercial
activities
(Commercial investors)
• Since 2010 IFC has provided ~US$150 million in concessional
financing to support power projects such as CSP in South Africa
Higher risk commercial
activities (DFIs)
and Morocco; wind in Mexico; solar PV in Thailand, Chile and
Not fully commercial
Gap: In need of temporary
subsidy
• In deploying concessional finance, IFC seeks to ensure that the
Not fully commercial Gap:
Needs long-term subsidy
minimized to reduce market distortion and prevent windfall
Permanent Subsidy
(Government/NGOs)
Honduras; and hydro power in Nepal.
implied subsidy offered through concessional finance is
returns for all project participants – sponsors, lenders,
contractors, etc.
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IFC as Project Co-Developer: IFC InfraVentures
• IFC InfraVentures is a US$150 million fund to provide development capital to infrastructure
projects in IDA (low-income) countries (*) and selectively in Middle Income countries,
complementing IFC’s efforts to increase the pipeline of bankable infrastructure projects in those
countries
• IFC InfraVentures can bring up to US$8 million in cash and “sweat” for projects in early stages of
development, in return for an equity option at financial close and the right to arrange the
project debt
• IFC InfraVentures will act as co-developer for such projects, adding value by:

experienced staff working proactively alongside the sponsor to bring the project to
financial close

supporting the project via its global presence and knowledge of local environments

helping structure the project so that its risks are reduced and it is made bankable,
increasing the likelihood that banks and equity investors will invest in the project
• Examples in the wind power sector include:

Development of a 100 MW wind project in Kipeto, Kenya

Development of a 103 MW wind power plant in Serbia
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IFC View of Local Regulatory Frameworks
• In many energy projects regulation is often the key risk
• Countries can offer various incentives (feed-in tariffs, tax credits, etc), establish renewable
targets or create legislation (import duties, local content rules) to encourage the growth of a local
renewable industry
• Assessment of stability and predictability of a country’s regulatory framework is a key aspect of
project appraisal
• IFC supports competition and fair market access; however, we understand that in the
renewables sector, governments play a key role in influencing the market
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Power
Wind
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IFC is a Leading Investor in Emerging Markets Wind
IFC Experience:
• >38 investments, 2,600+ MW of capacity
• Key transactions in Brazil, Mexico, Bulgaria, Turkey,
Romania, Croatia, China, Sri Lanka, and India
• Projects in new markets/regulatory regimes
• Experience with both equity and debt financing
IFC Approach:
• Products that optimize leverage, e.g. deferrable subordinated debt that
take more wind risk layered on top of senior debt
• Can mobilize concessional financing where appropriate
• We understand new regulatory support mechanisms
• We can assess and structure for regulatory support risk
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Why Renewables: Fueling Growth and Combating
Climate Change
• Developing countries have a clear need to power economic growth and to
improve the quality of life of their citizens (e.g. access to lighting and
communications)
• Need to diversify generating sources and where possible, deploy
indigenous power rather than using foreign exchange to import fuel
• Climate change and environmental concerns given diminishing resources
or reserves of coal, gas and even water
• Wind and other forms of renewable energy pose great opportunities for
private investors in emerging markets – if capital can be raised and risks
overcome.
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Key Elements for Successful RE Financing
• Committed and experienced investor/operator/developer
 Sufficient equity at risk
 Transparent procurement
• Clear regulatory / contractual framework providing for adequate mechanism of
tariff adjustment and/or strong LT PPA from creditworthy utility/client
• Competitiveness of power generation (merit order):
 key for merchant projects
 also critical when PPA, to avoid risk of eventual PPA
renegotiation/distribution losses
• Confirmation of renewable resource - wind
• Construction risk mitigated
• Upfront risks assessment by reputable independent parties (feasibility
study/least cost option study, E&S)
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Working Across the Value Chain
• IFC finances projects across the value chain (e.g. wind) from
upstream equipment manufacturers to downstream power projects
TURBINES
COMPONENTS
(produced by
OEMs)
(e.g. blades,
gearboxes, etc)
ASSOCIATED MACHINERY &
ANCILLARY SERVICES
WIND
FARMS
(e.g. software used to
control and monitor wind
turbines)
(captive or
utilities)
• IFC has expertise in clean tech, manufacturing, services and power
investments
• In addition to its investment teams, it has in-house industry experts, as
well as Environment & Social and legal staff expertise
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IFC Investments in Wind Power
Project
Subsector
Region
Country
IFC Investment Power Share
($ million)
($ million)
Mobilization
amount
($ million)
Total Power
Share and
Infrastructure
Mobilization
Project Count
MW
Debt, Equity
IDA
or Both
($ million)
Rudine WPP
Wind
Europe and Central Asia
Croatia
24.9
24.9
31.1
56.0
1.0
34.2
Penonome Wind
Wind
Latin America and the Caribbean
Panama
99.0
99.0
-
99.0
1.0
215.0
-
123.9
123.9
155.0
2.0
249.2
-
FY15 Subtotal
31.1
–
Debt
Debt
Tafila Rate Swap
Wind
Middle East and North Africa
Jordan
2.7
2.7
–
2.7
1.0
–
–
Debt
Tafila Wind
Wind
Middle East and North Africa
Jordan
69.1
69.1
151.7
220.8
1.0
117.0
–
Debt
Metro Power
Wind
Middle East and North Africa
Pakistan
25.8
25.8
–
25.8
1.0
50.0
1.0
Both
InfraV-Indo Wind
Wind
East Asia and Pacific
Indonesia
2.0
2.0
–
2.0
1.0
–
–
Debt
InfraV-Ivicom
Wind
Europe and Central Asia
Serbia
3.5
3.5
–
3.5
1.0
–
–
Debt
Enel Wind Brazil
Wind
Latin America and the Caribbean
Brazil
200.0
200.0
100.0
300.0
1.0
342.3
–
Debt
DJ Energy
Wind
South Asia
India
27.5
27.5
–
27.5
1.0
85.0
1.0
Debt
Jath Power (NSL)
Wind
South Asia
India
12.0
12.0
–
12.0
1.0
40.0
1.0
Debt
Uttar Urja Wind
Wind
South Asia
India
22.2
22.2
–
22.2
1.0
85.0
1.0
Debt
364.8
251.7
616.5
9.0
719.3
4.0
FY14 Subtotal
364.8
Bhilwara Captive
Wind
South Asia
India
7.5
7.5
–
7.5
1.0
20
1.0
Debt
Bhilwara R'ts 3
InfraV-Lamuwind
InfraV-Singida
Wind
Wind
Wind
South Asia
Sub-Saharan Africa
Sub-Saharan Africa
India
Kenya
Tanzania
1.0
3.0
4.0
1.0
3.0
4.0
–
–
–
1.0
3.0
4.0
1.0
1.0
1.0
–
–
–
Equity
Debt
Debt
Inox Rajasthan
Wind
South Asia
India
50.0
50.0
–
50.0
1.0
100
1.0
1.0
1.0
1.0
NSL Wind
Wind
South Asia
India
18.4
18.4
–
18.4
1.0
75
1.0
Debt
NSL Power
Wind
South Asia
India
5.0
5.0
–
5.0
–
–
Debt
Amakhala Wind
Wind
Sub-Saharan Africa
South Africa
70.7
70.7
–
70.7
1.0
134
–
Debt
Amakhala Swap
Wind
Sub-Saharan Africa
South Africa
2.8
2.8
–
2.8
1.0
–
–
Debt
InfraV-Kipeto
Wind
Sub-Saharan Africa
Kenya
2.0
2.0
–
2.0
1.0
–
1.0
Debt
Jelinak
Wind
Europe and Central Asia
Croatia
20.1
20.1
30.4
50.5
1.0
30
–
Debt
184.5
14.0
20.0
39.0
38.1
4.7
3.0
24.8
–
184.5
14.0
20.0
39.0
38.1
4.7
3.0
24.8
–
30.4
–
–
14.1
–
–
–
43.4
22.1
214.9
14.0
20.0
53.1
38.1
4.7
3.0
68.2
22.1
359.4
50
28
90
56
–
–
44
–
143.6
79.6
223.2
7.0
1.0
1.0
–
1.0
–
1.0
–
–
4.0
Debt
Equity
Debt
Debt
Debt
Debt
Debt
Debt
143.6
10.0
1.0
1.0
1.0
1.0
–
1.0
1.0
–
6.0
60.8
1.0
138
–
Debt
131.5
1.0
68
–
Debt
1.9
1.0
10
1.0
Equity
FY13 Subtotal
Bhilwara Wind
NSL Power
Pestera Power
Zorlu Pakistan
Techno Wind
InfraV-Renovatio
Sibenik WPP
Cernavoda Power
–
Debt
Wind
Wind
Wind
Wind
Wind
Wind
Wind
Wind
South Asia
South Asia
Europe and Central Asia
Middle East and North Africa
South Asia
Europe and Central Asia
Europe and Central Asia
Europe and Central Asia
India
India
Romania
Pakistan
India
Moldova
Croatia
Romania
Cernavoda Power
Wind
Europe and Central Asia
Romania
60.8
60.8
EDF La Ventosa
Wind
Latin America and the Caribbean
Mexico
28.9
28.9
Senok WindEnergy
Wind
South Asia
Sri Lanka
1.9
1.9
–
Senok WindResour
Wind
South Asia
Sri Lanka
1.9
1.9
–
1.9
1.0
10
1.0
Equity
Techno Wind
Wind
South Asia
India
35.0
35.0
–
35.0
1.0
127
1.0
Both
Enerjisa-II 1
Wind
Europe and Central Asia
Turkey
27.6
27.6
165.6
193.2
0.2
119
–
Debt
China WindPower
Wind
East Asia and Pacific
China
95.0
519.2
–
Debt
FY12 Subtotal
–
102.5
FY11 Subtotal
–
156.1
–
156.1
95.0
363.1
Grand Total
972.8
972.8
756.0
1,728.8
–
267.3
5.2
–
471.4
3.0
32.2
2,066.6
18.0
Note: 2015 figures as of December 18, 2014.
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