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REPORTING FROM 5 NOVEMBER
İSTANBUL, 5 NOVEMBER 2012 2 / / / /
Context
Case Studies
Matching expectations,
Looking ahead
INTERACTIVE: Where do you live? 1. Asia
2. Middle East and North Africa
3. Europe
4. North America
5. Latin America and the Caribbean
6. Sub-Saharan Africa
7. Australia and Oceania Asia19%
MENA2%
Europe31%
North America
22%
Sub-Saharan
Africa14%
Latin America
10%
Oceania2%
Total
INTERACTIVE: What perspective do you bring? 1. Policymaker
2. Regulator
3. Civil Society / NGO
4. International Organization
5. Investor
6. Project developer Policymaker
14%
Civil Society /
NGO 26%
International Org
26%
Investor 17%
Project develope
r 17%
MICHAEL LIEBREICH, ISTANBUL, 5TH NOVEMBER 2012 TWITTER: @MLiebreich 5 / / / /
GLOBAL NEW INVESTMENT IN CLEAN ENERGY 2004–11 ($BN)
Source: Bloomberg New Energy Finance
Note: Includes corporate and government R&D, and small distributed capacity. Adjusted
for re-invested equity. Does not include proceeds from acquisition transactions.
$54bn
$75bn
$113bn
$153bn
$187bn$189bn
$247bn
$280bn
39%
51%
35%
22%
1%
31%
13%
2004 2005 2006 2007 2008 2009 2010 2011
MICHAEL LIEBREICH, ISTANBUL, 5TH NOVEMBER 2012 TWITTER: @MLiebreich 6 / / / /
TOTAL INVESTMENT IN CLEAN ENERGY
Source: Bloomberg New Energy Finance, Columbia Pictures
In energy, a billion dollars
isn’t cool. You know what’s
cool?
A trillion dollars.
That’s cool
MICHAEL LIEBREICH, ISTANBUL, 5TH NOVEMBER 2012 TWITTER: @MLiebreich 7 / / / /
8.6 8.4 7.89.5
11.5
16.5
12.9
18.419.7
21.721.6
34.0
24.9
28.4
33.7
46.2
34.0
45.9
41.043.1
26.2
45.745.542.7
46.5
52.255.5
63.3
53.9
71.870.7
58.0
48.0
59.6
56.6
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
2004 2005 2006 2007 2008 2009 2010 2011 2012
Four quarter running average
NEW INVESTMENT IN CLEAN ENERGY Q1 2004–Q3 2012 ($BN)
Source: Bloomberg New Energy Finance
Note: Total values include estimates for undisclosed deals. Excludes corporate and government R&D.
Includes small distributed capacity & adjustment for re-invested equity.
MICHAEL LIEBREICH, ISTANBUL, 5TH NOVEMBER 2012 TWITTER: @MLiebreich 8 / / / /
CROSS-BORDER INVESTMENT SHARES BY REGIONAL
FLOW, 2004 – H1 2012 (%)
Source: Bloomberg New Energy Finance
Note: new build asset finance for renewable energy projects only. Investment volumes show cross-border
(or foreign) investments only. Domestic investments are excluded here.
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2004 2005 2006 2007 2008 2009 2010 2011 H12012
North/South
South/South
South/North
North/North
Shows that investment in the South in 2011 surpassed the 25% mark
MICHAEL LIEBREICH, ISTANBUL, 5TH NOVEMBER 2012 TWITTER: @MLiebreich 9 / / / /
It is impossible –
and also very
difficult
EL GALLO, BULLFIGHTER
PRIVATE SECTOR ADAPTATION:
EMERGING EXPERIENCE FROM
GLOBAL BUSINESS
CARBON DISCLOSURE PROJECT
FRANCES WAY
Adaptation is a Business Issue
“Changing temperatures and precipitations patterns may lead to decreased availability of
critical raw materials in the supply chain, especially agricultural commodities. These will
lead to the increased operational cost or even disrupt the business operations along the
entire value chain of Nestlé.”
Nestlé 2012 CDP Response
Global 500 2012 Climate Change Responses
Allianz reported that in 2011
it processed $2.2 billion in
natural catastrophe claims
(including non-weather
related claims). This is the
largest sum for natural
catastrophes in its history.
Timeframe for expected physical risk impact (number of companies)
81% of G500 respondents
report physical risks
(+10% from 2011)
96% have board or senior level
oversight of climate change
(+3% from 2011)
78% integrated climate change
into wider business strategy
(+10% from 2011)
İSTANBUL, 5 NOVEMBER 2012 13 / / / /
Context
Successes
Matching expectations,
Looking ahead
The Developer’s Perspective Ouarzazate 1 CSP Project in Morocco
Climate Investment Funds'
Private Sector Forum Istanbul, November 5, 2012
What was the innovative factor in the investment?
Sunday, 04 November 2012 Ouarzazate 1 CSP Project in Morocco 17
Ouarzazate 1 CSP (160MW with three hours
of storage) is one of the three largest CSP
projects under development in the world
With only 1.6 GW of installed CSP capacity
in the world, this plant alone at 160MW will
add 10% to the total installed global capacity
This project has delivered a framework that
has enabled International Financial
Institutions (IFIs) who by charter can only
lend to Governments, lend to a project
structured within the framework of Limited
recourse Project finance which underpins the
PPP model of service delivery contracts.
This has been achieved by the IFIs lending
through a government vehicle; in this case
MASEN (the Moroccan Renewable Energy
procurement Agency) but with “look through”
and “back to back” terms
1
Sunday, 04 November 2012 Ouarzazate 1 CSP Project in Morocco 18
How did the CIF funds add value to the tariff? 4
Debt Funding Leverage
Tenor/
years
Debt
interest
rate
Resulting
tariff US
cents/kWh
Likely funding from commercial sources for this
very large CSP project in Morocco
75/25 20 7.5% 24.5
The optimistic commercial debt funding case 75/25 20 5.5% 21.5
IFI funding (including CIF Funds) 80/20 25 3.5% 18.9
The issues on
Debt funding is
• Liquidity/Availability of the required amount
• Leverage (equity / debit ratio)
• Tenor of debit
• Price of debit (interest rate)
?
What has CIF Funds and World Bank leadership brought to this project?
• Discounted pricing terms, (buying down the risk premium of the project)
• Mobilizing larger amount of funds (bringing other public sources of funding
from MDBs, bilateral agencies, and government)
DenizBank Project Finance
CIF 2012
Partnerships with IFI’s and Development Banks
Cofinancing partnerships with development banks
Funding partnerships
• EUR 150 million MidSEFF (EBRD & EIB)
• USD 40 million TURSEFF (EBRD & JBIC& CTF)
•The objective of MidSEFF & TURSEFF is to reduce Turkey’s dependence on fossil
fuels by financing private sector investments in mid-size renewable energy projects.
• 2009 : DenizBank financed the Rotor Wind Power Plant of Zorlu Group (135
MW) in partnership with EBRD, IFC, EIB
• 2009 : DenizBank participated in the financing of the Akfen HEPP portfolio (20
HEPP’s with total IC 270 MW) in partnership with TSKB
• 2009-2010 : DenizBank provided letters of guarantee lines for TKB for Muratlı
HEPP and Kapıdağ WPP
Sustainable Energy Financing: TURSEFF&MidSEFF
DenizBank Experience
~ 90 diversified renewable energy & energy efficiency transactions realized
through TURSEFF & MidSEFF lines with over USD 100 mio loan exposure
Mainly SME & commercial banking segment clients benefiting from a
systematic approach:
• Due diligence & double checking of the technical assumptions
• ESAP (Environmental&Social Action Plan): Road map with concrete
actions & supervision of environmental and social issues
Enhanced awareness of environmental standards
More Clean, Conscious and Sustainable…
İSTANBUL, 5 NOVEMBER 2012 22 / / / /
Context
Successes
Matching expectations,
Looking ahead
MICHAEL LIEBREICH, ISTANBUL, 5TH NOVEMBER 2012 TWITTER: @MLiebreich 28 / / / /
CLEAN ENERGY FINANCE AND CLIMATE FINANCE
STAKEHOLDERS
Sources
of
finance
Investment
managers
(private)
Enablers
and service
providers
Corporations (eg, start-ups, oil and gas, utilities, technology providers)
Policy Heads of state / Legislators / Ministries (eg, energy, environment, finance)
Heads of regions / Electricity regulators
Endowments / Pension funds / Life insurance companies / High net worth individuals and family offices
Venture capital / Incubators / Private equity (companies)
Private equity (projects) / Infrastructure funds
Debt funds / Carbon funds
Microfinance providers
Hedge funds / Mutual funds
Investment banks / Consultants / Law firms
Rating agencies
Insurance providers / Letter of credit providers
Hedging providers
Early R&D, Proof
of Concept
Demonstration and
Scale-up
Commercial Roll-
out
Diffusion &
Maturity
Investment
managers
(public)
Development banks / Grant-giving bodies / National treasuries
/ Sovereign wealth funds / Export credit agencies
Industry
MICHAEL LIEBREICH, ISTANBUL, 5TH NOVEMBER 2012 TWITTER: @MLiebreich 29 / / / /
PUBLIC-PRIVATE PARTNERSHIPS: DIFFERENT
STAKEHOLDERS, DIFFERENT VIEWS
PUBLIC SECTOR PRIVATE SECTOR
SUCCESS
IS….
Progress
Happy constituencies
Flow of funds to the developing world
Profits
Returns
Repatriation of profits
CONCERNS
ARE…
Fairness
Political realities
Measure / Report / Verify of donors
Risk, risk, risk
Liquidity
MRV of recipients
FOCUS
IS…
$ billion scale
Need to be comprehensive
Restricted to imperatives
$ trillion scale
Need to find opportunities
Can choose among alternatives
STYLE
IS…
Patient – decade goals
Sharing
Qualitative
Short term – annual goals
Competitive
Quantitative
Reporting from the Private Sector Forum
Regulators/Policy Makers
Investors/Lenders
Project Developers
• Climate investing value chain • Market Transformation: Large
number of small innovations or small number of large innovations • Standardisation (terms & condition,
PPAs, etc.)
Landscape of financing Activities
• Market solutions – Innovative Products, innovative business models
• Policy solutions – fit regulations, long term support, consistency, entrepreneurship
• Financial solution – Liquidity, access to capital, risk sharing, scale
Matching Expectations