Connecting Business with Finance in the Clean Energy Sector. An Introduction to Private Financing Advisory Network

Transcription

1 Connecting Business with Finance in the Clean Energy Sector An Introduction to Private Financing Advisory Network

2 Contents Overview PFAN Rationale Why PFAN? Core Functions And Services Methodology Project Criteria Institutional Setup Network Overview Strategic Partnerships & Linkages Track Record Expoanding the Scope PFAN & Adaptation Projects Scaling-Up Strategy Sample Projects Development Impact & Value Added

3 Overview Clean Energy Investment Accelerator: PFAN advises low-carbon, climate resilient businesses in developing countries, and matches projects to appropriate private financing. PFAN mobilizes private financing to reduce GHG emissions and build climate resilience contributing to Paris Agreement and Sustainable Development Goals: o Paris Agreement Impact: Mobilize USD 100 billion per year by 2020 of private and public financing o SDG Impact: SDGs 7 (Energy), 9 (Industry), 13 (Climate Action), and 17 (Partnership). PFAN operates on a low-risk, low overhead networking model based on fixed-fee project development and transaction advisory services

4 Where We Are Now Access to finance is the greatest obstacle to large-scale deployment of clean energy o Investment is available and projects exist; however, lack of communication and understanding on new technologies, business models, risk profiles, investment vehicles, etc. lead to inaction. o Mobilizing larger and lower-cost capital flows through private funding and public-private partnerships is necessary to drive this process PFAN bridges the gap between investors and entrepreneurs. Governments alone cannot provide the capital needed for the clean energy transition

5 Where We Are Now (2) PFAN is one of few actors in the climate finance space addressing key barriers for Small and Medium-sized Enterprises (SMEs) in developing countries and emerging economies: DEMAND Oversupply of poorly structured projects Lack of financial & commercial skills SUPPLY Large Financing Supplies Underdeveloped investment cultures and risk assessment Low familiarity with technologies & business models Limited supply of Investor Ready Projects / Limited Investment Readiness

6 PFAN Rationale A multi-pronged approach

7 Why PFAN? Early stage development tool Access to Deal Pipeline for Investors Direct Access to Investors for Developers Credibility Network Benefits o o On the ground Local Knowledge / We know what works Global Leverage Risk Reduction through targeting of key risk points Reduction of Transaction Costs for all parties Resource Optimization Accelerated Development Progress

8 Risk Reducing Risks Clean Energy Project Technology Deployment A PFAN INVESTOR B PHASE 1 Expand Project Portfolio PHASE 2 Desktop Due Diligence PHASE3 Comprehensive Due Diligence APPLY TO PFAN PROJEC T DEV T TECH ASSIST PHASE 1 Conceptual PHASE 2 Feasibility & Demonstration MENTORING PROGRAM PHASE 3 Initial Operation PHASE 4 Expansion INVESTMENT FACILITATION GOAL Financial Closure Maturity

9 PFAN Core Functions Unlock frontier markets for climate technologies Build financial service ecosystems Help businesses develop investor-ready proposals Mitigate investor risk Facilitate project-tofinance matchmaking Build Project Pipeline & Portfolios for large-scale investment Best practice application for scale and replication

10 PFAN Services Deal facilitation Technical studies Due diligence and legal costs Co-funding Tipping Point Technical Assistance Project ID Investment Readiness Assessment Identifies strengths and weaknesses for focus of coaching Feedback from investors and experts Investor forums Investor Roadshows 1-1 introductions Investor Network Financing Facilitation Strategic Advisory & Coaching Professional advice Proven methodology Network members Local and global understanding

11 PFAN Methodology (2 Entry Points) Unsolicited Project Proposal Any Time / Any Source Long Term Development Open Time Cycle Unlimited in Time Investment Readiness Assessment/ Project Selection Pipeline Induction Free Coaching Project Structure & Business Model PFAN Development Framework Investor-ready Business Plan Investor PPT / Project Data Sheet / Executive Summary Financing Facilitation Sourcing of Equity & Debt Introduction to Investors Showcasing at Investor Forum Financial Close and Implementation Periodical RFPs Clean Energy Financing Fora Competitive Component 9 12 months Closed Time Cycle Tipping Point Technical Assistance

12 Project Criteria Technically Viable Commercially Viable Growth Potential USD 1 50 million total investment in low carbon, climate resilient projects Micro projects (< USD 1 million) Climate Impact PFAN PROJECTS Development Impact (SDGs) Experienced Management Team Wind/ Solar / W2E Biogas / Hydro / Energy Efficiency / Biomass / Biofuels / Geothermal / Rural Electrification / Clean Transport / Mitigation / Adaptation Technology Neutral

13 New PFAN Hosting Arrangement In order to scale up operational capacity and global impact, PFAN has adapted a new organizational and governance structure, which will be more accessible to donors and enhance operational sustainability: Hosting at UNIDO and REEEP, Management and Operational Refinements o o o o o o Establishment of Multi-Party Trust Fund hosted by a recognized International Organization (UNIDO) in collaboration with REEEP and overseen by Steering Committee Cost recovery for partial sustainability in more mature markets Expanded partnerships with other complementary organizations, activities Reframed mission for multidirectional technology cooperation to encourage participation from major developing economies Strategic positioning as provider of project development and pipeline origination services to development banks, climate funds, and investors by regularizing project referrals Scaling up of the Adaptation Work Stream

14 Institutional Setup

15 Global Snap Shot of PFAN

16 Strategic Partnerships Establishment of Regional Cooperation Platforms with Regional Development Banks UN Climate Technology Centre & Network (CTCN): o o o o Assessment of Investment Readiness & Finance ability of Response Requests Provision of Technical Assistance to support project development and facilitate finance Interface with Private Sector & Financial Institutions to support in-country Capacity Building Support of Private Sector. Engagement Strategy Support development and rollout of International Renewable Energy Agency s (IRENA) Sustainable Energy Marketplace. o Cooperation on Project ID, vetting, listing, project development & financing facilitation Pursuing cooperation with UN SE4All and Green Climate Fund Numerous additional linkages o UNEP on TNAs / UNDP SS Gate / UNCDF / EEP / SANAICT / CICs / GGGI

17 How Does Business Interact? Project Developers o Free-form project proposal submission on rolling basis (template on website) o Periodical RFPs (see website for current calls). Technology Developers/Providers o Creating market for deployment of technology applications Consultant Network Member o Provision of PFAN Services as a PFAN Consultant o Track record of raising investment in low carbon, climate resilient projects in developing countries o Business development Investor/Financier Network Member or Affiliate o Access to Deal Pipeline o Provision of Technical Assistance to pipeline projects (if selected by PFAN)

18 PFAN Funding Partners

19 Selected PFAN S Network Members Global & Multiple Regions

20 Selected PFAN Network Members Africa IG-2SD

21 Selected PFAN Network Members Asia

22 Selected PFAN Network Members Latin, Central America & Caribbean CARIBBEAN ESCo LTD.

23 Selected PFAN Network Members Cis & Central Asia TCF Limited

24 Selected PFAN Resource Partners

25 PFAN Track Record Projects closed 87 projects 141 GWh pa energy savings 701 MW installed capacity USD 1,2 billion raised 2,6 million tonnes CO 2e pa Leverage ratio: 1 / projects MW capacity USD 8,7 billion 17,6 million tonnes CO 2e pa Pipeline

26 Pipeline Analysis Technology Region Biofuels Biomass Biogas W2E Clean Transport Hydro Wind Solar Geothermal EE Other S Asia China CISCA Southern Africa LA / Brasil Asia Pacific SE Asia East Africa West Africa CAC 2% 15% 5% 19% 2% 7% 5% 8% 0% 7% 15% 28% 7% 8% 17% 13% 3% 5% 13% 18% 3%

27 Closed Projects Analysis Technology Hydro Biomass W2E Wind Biofuels Solar EE Biogas Clean Transport Region Southern Africa E Africa W Africa SE Asia S Asia China LAC EE 14% Solar 18% Biogas 16% 13% Clean Transport 6% Hydro 17% 33% 27% 10% 12% 12% 3% Biofuels 6% Wind 6% W2E 4% 3%

28 Expanding The Scope: Adaptation Pilot Adaptation Work stream launched in 2012 (USAID) Scale-Up Programme from 2014 across Sub-Saharan Africa (IDRC) South Africa, Mozambique, Kenya, Uganda, Ghana and Senegal 31 projects currently in Development Pipeline USD 1.5 million raised Target Sectors Energy / Access to Energy Agriculture & Agribusiness Water & Sanitation Tourism Forestry & Ecosystems Services Urban Development Adaptation Products & Services Micro-Finance & Micro- Insurance

29 Scaling-Up Strategy 2-5x in 2-3 years Reinforce & Enhance Institutional Set-Up & Internal Organisation Expand Networks & Network Activities Develop Bundling & Securitisation Approaches Operating Manual SOPs Expand Mgmt & Admin Capacity Introduce Specialised Network Support Services Investor Liaison & Financing Facilitation Cash Flow & Financials (Sector Specialisations) Enhance & Expand Cooperation with selected Strategic Partners Develop Access to Wholesale Capital Markets Develop Secondary Markets & Liquidity Tailor Project Sourcing & ID activities to wholesale off-take requirements

30 Solar Project Fund for Commercial Off-grid Solar and Rural Micro-grids in Nepal Gham Power uses a unique project aggregation platform that enables rapid qualification and development of large scale projects that primarily focus on powering commercial activities for financial sustainability. Project ID Regions Country Technology Types Business Type Debt Asking Amount Equity Asking Amount GHG Mitigation Potential (tonnes CO2e pa) 394/GCC_245 Asia Nepal Solar Scale-Up $18,414,000 $8,276,400 17,520

31 Bio2Watt Bronkhorstspruit Biogas Power Plant South Africa BPP uses cow manure from an industrial scale cattle lot to produce biogas and generate electricity for supply to a dedicated industrial off-taker, generating 4MW of electrical power and 4MW of thermal power Project ID Regions Country Technology Types Business Type Debt Asking Amount Equity Asking Amount GHG Mitigation Potential (tonnes CO2e pa) 221/REEEP_022 Southern Africa South Africa Biogas Greenfield $9,450,000 $4,050,000 17,000

32 SME Funds / Green Energy & Biofuels Ethanol Bio-Refinery Plant Scale-Up Nigeria SME uses waste saw dust and water hyacinth to produce bio-ethanol and bio-ethanol gel using its proprietary 2 nd Generation biofuels technology in mini-refineries. The bio-gel is distributed with cook stoves to households in rural Nigeria through an innovative distribution model Project ID Regions Country Technology Types Business Type Debt Asking Amount Equity Asking Amount GHG Mitigation Potential (tonnes CO2e pa) 280/NIG_204 West Africa Nigeria Biofuels Scale-Up $15,700,000 $850,000 5,400

33 Development Impact Accelerates Financing Flows Especially for SMEs - an underserved investment niche Reduces Project Execution and Financial Risks Unmatched depth of experience, utilizing tried and tested methodologies. Enhances Inclusive Local Capacity across Stakeholder Groups Project developers, consultants, financial institutions Feedback loops into policy dialogue Increases Energy Access 40% of projects are off-grid Sustainable Development Goal Impacts Yields gender, water, agriculture, education and health benefits Additionality Projects achieve financial close Local businesses and investors stimulate local economies

34 PFAN Value Added Comparative advantage: Originating quality, investment-grade pipeline for multilateral and private sector investors PFAN is a complementary Technical Assistance Service focused on SMEs that facilitates effective disbursal of climate financing, including through the Regional Development Banks, the Green Climate Fund and the UN Climate Technology Centre and Network High degrees of financial leverage for Donors USD leveraged for every dollar of public funding Unique low overhead networking business model based on fixed fee investment advisory services

35 Contact Us! PFAN Global Coordinator: Peter Storey UNIDO: Patrick Nussbaumer REEEP: Martin Hiller Thank You!