Innovative Energy Project Development with Partners

Transcription

1 Innovative Energy Project Development with Partners 9 March 2016 Knowledge Partnership Forum Yongping Zhai, Technical Advisor (Energy), Asian Development Bank

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3 ADB in Brief Founded in 1966,Aim is an Asia Pacific free of poverty Owned by 67 countries 48 regional, 19 nonregional $165B subscribed capital, triple-a credit rating HQ in Manila, 29 resident missions, 3 representative offices About 3000 staff Provides loans, grants, TA, equity, policy dialogue in 44 developing member countries In 2015 provided $27B of assistance, which included $16B of ADB financing

4 ADB s Role in Infrastructure Development Developing the regulatory environment Preparing, planning and packaging projects Introduction of improved technologies to achieve quality infrastructure Market-based and concessional financing of investments Credit enhancements & equity investments to share risks with private sector Development of financial markets and innovative financing modalities High standards of environmental and social safeguards

5 ADB Financial Products Sovereign Financing of government projects, policy based loans/programs, financial intermediation, emergency assistance, countercyclical support, TA loans, guarantees 2015 approvals $B OCR loans 10,790 Concessional financing 2,872 of which grants 358 TOTAL 13,662 Ordinary capital resources (OCR) ADB issues bonds, lends with small interest spread For project loans, grace period may be ±5 years and repayment period may be ±15-20 years Asian Development Fund (ADF) ADF is financed by donors, provides grants & soft loans to least developed countries In 2017 it will merge with OCR to expand capital, will still provide soft terms to least dev countries

6 ADB Financial Products Nonsovereign Loans for direct financing of private projects market based rates & fees Project must have developmental impacts/ demonstration effects, not just financial return 2015 approvals $B OCR loans 2,626 floating rates at a spread over LIBOR or Euro interbank rate, also fixed Equity investments in enterprises & private equity funds Political risk and partial credit guarantees to enhance risk profile of transaction to attract commercial lenders Direct value added cofinancing, especially B-loan/lender of record to mobilize additional debt, parallel loans & equity and trade finance

7 $ billion $ billion 2015 ADB Operations OCR, ADF, Confinancing, Sovereign & Nonsov Total financing approved in 2015 = $27.165B OCR ADF Cofinancing TA Commercial Cofinancing Official Cofinancing Nonsov Sov

8 ADB Energy Policy Mandate To help DMCs provide reliable, adequate, and affordable energy for inclusive growth in a socially, economically, and environmentally sustainable way. Directions: SDG7 and COP21 The ADB Energy Sector work plan and strategy will align with the Sustainable Development Goals (SDG7) and to the outcomes of COP 21 (INDCs), through deployment of new and innovative solutions.

9 2015 Energy Sector Achievements (approx. $2.5 billion clean energy investments*) SERD, 22% SARD, 18% PARD, 1% EARD, 21% PSOD, 30% CWRD, 8% Energy Efficiency, 49% Shift to cleaner fuel, 12% Renewabl e Energy, 38% Clean energy investment by operations Clean energy investment by type Demand side EE 29% Supply side EE 71% On-going discussion: Shared approach and methodology in calculating climate financing Forming Climate Finance Tracking Team for energy sector Participating in MDBs discussions on methodologies Composition of EE investment *for validation

10 ADB Financing for Energy For All 3.6 M HHs or 18.1 M people Number of beneficiaries $1.22 Billion Energy Access Investment In 2015 Energy Access Investment In ADB energy access investment $6.432 Billion Will benefit 20.9 million HHs or million people

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12 Mid-Term Review Strategy 2020 Growing number of middleincome countries (Per Capita GNI $1036-$4,086 $12,615). By 2020, only 2 countries are expected to remain low income countries (Per Capita GNI <$1,036). Economic growth is leading to more pollution, environmental degradation, and biodiversity loss. In addition to finance, the value-added includes the provision of up-to-date knowledge and cross-country experiences. (Finance++)

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14 ADB s operational targets ADB lending OCR-ADF merger to raise lending from $14B in 2014 to $20B in 2020 Cofinancing from $14+9=23B in 2014 to $20+20=40B in 2020 PPPs new PPP Office to expand PPP operations e.g. Philippines North-South rail project Finance++ = lending + knowledge + leverage Climate change ADB lending for mitigation and adaptation to reach $6B by 2020

15 ADB s Climate Finance Target (supporting INDCs) Mitigation (goal: $4 billion total by 2020) Adaptation (goal: $2 billion total by 2020) Sector Energy Other sectors Total Proposed contribution by 2020 $3 billion $1 billion $2 billion $6 billion

16 $ billion Energy sector progress and way forward * Energy Sector Investment Clean Energy Investment *2015 figure to be validated

17 Expanding Energy Sector Operations Overall energy sector lending currently at about $3-4 billion per year. With OCR/ADF merger, the lending in the energy sector is expected to reach $5 billion per year by Clean energy lending increasing from $2 billion towards $3 billion per year beyond Mobilize climate and other co-financing (e.g. Green Climate Fund, Clean Investment Funds) $95 million available for allocation under Clean Energy Financing Partnership Facility (CEFPF) to support Operations (grants, PPTAs, CDTAs, RETAs)

18 Energy SG Work Plan Highlights Support new Sustainable Development Goal on Energy (in addition to Poverty, Food, Health, Education, Gender, Water goals) Focused Areas - Energy access - Renewable energy - Energy efficiency - Sector reforms Expanding Operations with Innovations - Advanced technologies - New financing instrument - New business model - PPP within ADB (joint PSOD/RD project) - Multi-sector approach - Cross border energy initiatives

19 Technology Innovation Distributed renewable (e.g. rooftop solar) - Supporting India s Solar Rooftop Program Smart grid/smart meters - promoting renewable energy and energy efficiency - Uzbekistan Advanced Electricity Metering Project Mini grid with storage providing affordable renewable energy - Maldives Renewable Based Hybrid Mini-Grid Project - Solar Energy Development in Solomon Islands Cost Effective innovative transmission /distribution - Nepal Power Transmission Project/Myanmar Power Transmission Project (using aluminum compact core conductor) - Single Wire Earth Return in Mongolia

20 Financing Innovation $600 million for Indonesia Result Based Lending for Sumatra Power Grid Strengthening Project the first RBL in the energy sector, effective way to expand the lending

21 Introducing New business models Simpa Networks ( Off Grid Pay-As-You-Go Solar Project ) in India - ADB Investment: $2 million equity investment in 2013, $5 million CTF loan under preparation in Investee: Simpa Networks, a venture-backed technology company with a bold mission: to make modern energy simple, affordable, and accessible for everyone. - Strategy: Simpa offers an unique pay-as-you-go metering solution for off-grid solar home systems in rural India by using mobile phones technology to transform recurring energy expenditures into an eventual capital asset purchase. Scaling up of solar leasing as a service model. - Development Impacts: Increased access to affordable clean energy for base of the pyramid (BoP) consumers in rural India (10,000 systems installed as of April 2015), avoiding the greenhouse gas emissions by reducing kerosene usage.

22 Joint Private Sector and Public Sector Operations India Power Grid Green Corridor Development Project India s Green Energy Corridor facilitates the transfer of renewable energy to load centers Absorption and smoothing out of the RE intermittency Static compensators (STATCOMs) to enhance grid stability

23 PRC Beijing-Tianjin-Hebei Air Quality Improvement Program Multi Sector Approach - $300 million programmatic policy-based lending with horizontal packaging to enhance Government s clean air action plan. - Policy actions for (i) reduced PM2.5 emissions from energy, industry, transport, urban and agricultural sectors; (ii) strengthening environmental policy and regulatory framework; and (iii) development of social protection system for inclusive industrial restructuring. - Project being peer reviewed by Energy, Transport and Urban SGs

24 CAREC Cross Border Energy Initiatives - TUTAP (Turkmenistan, Uzbekistan, Tajikistan, Afghanistan, and Pakistan) Transmission Interconnection - TAPI (Turkmenistan, Uzbekistan, Pakistan and India) Gas Pipeline (ADB providing transaction advisory services) GMS - With progress in physical interconnections in GMS, a Regional Power Coordination Center (RPCC) is being established with ADB support SASEC - Bangladesh-India Interconnection - Nepal-India Interconnection - Bhutan Hydropower Export Project to India (first cross border CDM) - Sri Lanka India Interconnection Study

25 Scaling up lending with Innovative Approaches in Smartgrid Microgrid Equipment Goods IT Application Civil Platform Renewable Energy Equipment Goods IT Application Civil Platform Cleaner Fossil Gen Equipment Goods IT Application Civil Platform Energy Efficiency Equipment Goods IT Application Civil Platform CCS Equipment Goods IT Application Civil Platform Electric Vehicle Equipment Goods IT Application Civil Platform

26 We will meet you frequently Flagship and key events 11th Asia Clean Energy Forum (HQ, June 2016) 9th Asia Solar Energy Forum in Beijing (PRC, March 2016) Symposium on Renewable Energy Based Mini/Micro Grids in Islands (Maldives, April 2016) Further Collaboration between Asia Solar Energy Forum (ASEF) and Regional Task Force (RTF)

27 What We Wish to Hear from the Private Sector Today Innovative Technologies & Solution What do you have? Good cases applied to developing countries How do you apply them to local context of developing countries (cost, quality, practice)? Challenges you are facing What do you expect from ADB?

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29 Thank you. Yongping Zhai Tel: Twitter: Yongping