Renewable Energy
Purpose of the Power Purchase Agreement (PPA)
Nebojsa Arsenijevic, BREP Manager
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IFC – World Bank Group
IBRD
IDA
International Bank
for Reconstruction
and Development
International
Development
Association
Est. 1945
Role:
Clients:
Products:
IFC
Est. 1960
MIGA
International Finance
Corporation
Multilateral
Investment and
Guarantee Agency
Est. 1956
Est. 1988
To promote institutional,
legal and regulatory
reform
To promote institutional,
legal and regulatory
reform
To promote private
sector development
To reduce political
investment risk
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
184 member countries
Foreign investors in
member countries
- Equity/Quasi-Equity
- Long-term Loans
- Risk Management
- Advisory Services
- Political Risk Insurance
- Technical assistance
- Loans
- Policy Advice
- Technical assistance
- Interest Free Loans
- Policy Advice
Shared Mission: To Promote Economic Development and Reduce Poverty
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IFC – Internal Structure
Advisory Services (AS)
Investment Services (IS)
IFC Provides Advice, Including to:
• Businesses
• Public-Private Partnerships
• Supporting the Private Sector
IFC Investing Solutions Include:
• Loans
• Syndicated Loans
• Equity Finance
• Structured Finance
• Risk Management Products
• Local Currency Financing
• Private Equity & Invest. Funds
• Trade Finance
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Balkan Renewable Energy Program
Component
Activities
C1
Regulatory framework improvements
C2
Support to renewable energy sponsors (Market and company level)
C3
Support to financial institutions
(Market and bank level)
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Align national regulation with EU; Fulfill obligations in accordance to EC Treaty of SEE;
Design appropriate incentive mechanisms;
Increase transparency of concessions granting procedure (credibility);
Design investment promotion tools and mechanisms for SHPPs;
Increase “bankability” of projects and decrease collateral requirements;
Make predictable cash flow analysis and conditions for project financing.
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B2B workshops,
Support to Associations,
Knowledge sharing
Promotion of new technologies
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Designs cross-check,
Business plan preparation,
Finance modelling
CDM projects registration
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Training material development
Integration of Regulatory/ Budgeting/
Engineering and Risk in the Finance Manual
Country Level Workshops
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In-depth Training for SHPPs and PF
Support in First SHPP Assessment
Portfolio Analysis and Recommendation ( in
the second year)
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Potential IFC’s support to Biomass Projects
Advisory Services:
• Private stakeholders
• Public stakeholders for public investment
• Public stakeholders for PPP
Investment Services:
• Privately owned project
• Publicly owned project (sub-national)
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AS: Private - Hartija DOO Kočani
Technical Consultant:
Role of IFC:
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LEAD ADVISOR
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TECHNICAL ADVISOR
•
overall management of consultants
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Financial Analysis
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Internal promotion of the project (IS)
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Marketing to Investors and financiers
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Goals:
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To support pilot project in Macedonia
(utilization of biomass) for heat and power
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Comply with national Waste Management Plan,
national Law on WM, and EU Directives
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Use waste as a resource
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First-of-its-kind WM plan approved in Serbia,
innovative in terms of scale and technology
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Review of technical data to inform
the bidders
Drafting of feasibility study in
accordance with local requirements
(including licenses)
AS/IS: Public - Botosani DH Project
Botosani DH
Rehabilitation
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Client: Municipality of Botosani
DH Company: Modern Calor (heat sales
140,000 Gcal)
IFC financing €7.6 million
Total project cost is €45.7 million (cofinancing from EU ROS)
Cooperation w JASPERS on tech DD
Technical details
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Construction of a new cogeneration
plant and Heat-only Boilers
• 2 x 4MWe gas-engines
• 2 x 52MWth Heat-only boilers
Upgrade of the heating T&D network
• Installation of ~25 km of T&Dnetwork and rehab of 15 GHS
Re-connection of 21 large consumers
EE in Buildings Pilot
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AS: Public for PPP – Belgrade Waste
Technical Consultant:
Role of IFC:
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LEAD ADVISOR
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FINANCIAL ADVISOR
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overall management of consultants
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Financial Analysis
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PPP structuring
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Marketing to Investors and financiers
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Review of technical data to inform
the bidders
Drafting of technical sections of
tender documents
COUNSEL:
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Long term goals:
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Raise living standards, protect the
environment, optimize municipal land use
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Comply with national Waste Management Plan,
national Law on WM, and EU Directives
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Use waste as a resource
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First-of-its-kind WM plan approved in Serbia,
innovative in terms of scale and technology
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Review of regulatory framework
Drafting of documents according to
approved structure and regulation
IS: Private – Wind Farm Rudine (Croatia)
Project details:
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34.2 MW Rudine wind farm
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32 kilometers northwest of Dubrovnik
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RP Global (Austria)
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78,000 tons of CO2-equivalent each year
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2nd project financed by IFC (Sibenik)
Role of IFC:
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Arranged up to EUR 42.5 MM in financing
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IFC provided a EUR 18.9 MM loan
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IFC mobilized an additional EUR 23.6 MM from
UniCredit Bank Austria through syndicated loan
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Conclusion
AS: Pros
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Global experience
Internal capacity
Importance of E&S sust.
Respect of local frmwrk
IS: Pros
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Project finance
Tenor
Syndication
Loan/Equity/QE
AS: Limitation
• Expected client contribution
IS: Limitation
• Size of the project
• Commercial approach (no
subsidies and grants)
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THANK YOU VERY MUCH
Nebojša Arsenijević
NArsenijevic@ifc.org
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Investment options
Equity
Mezzanine /
Subordinated
Debt
Senior Debt
Corporate
JV (early equity investments, Infraventures)
Typically up to 20% shareholding
Long-term investor, typically 6-8 year holding period
Any number of structures/flavors of subordination
Subordinated loans, income participating loans, convertible loans
Senior Debt (corporate finance, project finance)
Fixed/floating rates, USD, EUR and local currencies available
Long maturities: 8-20 years, appropriate grace periods
Range of security packages suited to project/country
Mobilization of funds from other lenders and investors
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