Date post: | 27-Dec-2015 |
Category: |
Documents |
Upload: | samson-mcgee |
View: | 216 times |
Download: | 2 times |
Other Loans &Investment
Relationships
Donations –Grants &
Energy Cures
Borrowings – People + Planet
Notes
Services
SMEEntrepreneurs
&MFIs
Capital
Principal, Interest & DividendsDevelopment Benefits
Environmental Benefits
Carbon Revenues
Operations
Debt Equity End-userFinance
Other Loans & Investment
Relationships
Donations –Grants &
Energy Cures
Borrowings – People + Planet
Notes
Services
SMEEntrepreneurs
&MFIs
Capital
Principal, Interest & DividendsDevelopment Benefits
Environmental Benefits
Carbon Revenues
Operations
Debt Equity End-userFinance
$1.00 $0.20 $0.10
$1.07 $0.23
2/3rd @ 10%, 7 y
1/6th @ 12%, 9 y
1/6th @ 11%, 5 y
10.7%return
Provision for financial losses:9.2% of P + I + D … 10.7% becomes 8.7%On $1.00 …equals 7.3% on $1.07
0.00%
1.00%
2.00%
3.00%
4.00%
5.00%
6.00%
7.00%
8.00%
9.00%
100% 94.25% 88.50% 82.75% 77%
Return
Sensitivity of Return to Amount Borrowed of each $1.30 Required10.7% hurdle rate, 9.2% losses, 1.30 formula
7.3% base caseBorrow $1.07Invest $1.00
Grants + Carbon= $0.23
% of full cost borrowed
Carbon MonetizationTo E+Co Enterprises
2008-2012
Investment Capital
Grants, Donations and Carbon Value
Energy for People and Planet
$190 million
Energy Enterprises andCustomer Finance
People Planet
$150 million
$40 million
24.5 millionwith modern
energy
19.5 millionMetric tons of carbon dioxide
saved
335 investments
Financial Leverage$0.9 billion
© E+Co, Sept 2008© E+Co, Sept 2008
$21 million
$211 million
Fund Manager
Biogas Fund Step 1
Investors Donors or Sponsors
Clean Development Mechanism
**Households: 20,000 200,000 Fund: Euro 6.3 million E 60 million
Down Payments
Monthly Payments Carbon Credit Buyer
CapitalCost
approvals
Household Biogas Fund - Step 1 20,000 Households**
Household Biogas Fund - Step 1 20,000 Households**
• 20,000 household biogas units serving 100,000 people in rural Bangladesh
• Annual CO2 benefit – 80,000 tonnes• Required investment – Euro 6.3 million
– From investors Euro 6.0– From donors or sponsor investors* (one time and start-up costs)
Euro 0.3• Cost Reduction to Households from [6 year] sale of
carbon credits 23%• Return to Investors 6.5%• **Full Program and Fund 200,000 units (Euro 60+
million) serving 1 million people• *Sponsor investors might include EC “Patient Capital
Initiative”• Hurdles: CDM methodology, CDM process and
approvals, timely roll-out, integration of diverse elements, pricing and cost
6.53%IRR
240,000
240,000
240,000
1,830,307
1,820,307
2,508,804
(5,997,840)
Cash Flow (Euro 000s) (from)/to investors
-
- Recycle Reserve for next phase
25,000
25,000
25,000
25,000
25,000
25,000 Operating Costs - CERs
15,000
15,000
15,000
15,000
25,000
50,000 Operating Costs - fund management
200,000
200,000
200,000
200,000
200,000
200,000
Operating Costs - loan servicing + Defaults
65,000 Set-up Costs for CERs
100,000 Set-up Cost of Fund
-
340,000
Grants to Reduce Costs or Support Operations
480,000
480,000
480,000
480,000
480,000
480,000
Sales of CERs (certified emission reductions)
1,590,307
1,590,307
1,590,307 Monthly Payments from Customers
713,498 Down Payments from Customers
(6,172,840)Capital Cost of Biogas Plants
654321Year 0Cash Flows (Euro, 000s)
1-Rural Household 2-Biogas Construction Company3-Microfinance Institution 4-Enterprise Investment Company 5-Greenhouse Gas Approval Mechanism (CDM)6-Company in Need of GHG Benefits7-Innovation Funding Organization8-Catalyst
1
2
34
56
7
8
January 2006Household Biogas
Fund Example
1-Rural Household 2-Biogas Construction Company3-Microfinance Institution 4-Enterprise Investment Company 5-Greenhouse Gas Approval Mechanism (CDM)6-Company in Need of GHG Benefits7-Innovation Funding Organization8-Catalyst
1
2
34
56
7
8.
Income per hh at $1080-$1260py…e@$189-$252 py
Builds hh biogas units At $400 w. 20% margin
MFI-makes loans 2 yrs, 1% month +/-
Supports enterprises
Supportssustainableinitiatives
Needs carbon offsets
Organizes purchasesand sales of GHGs
1-Rural Household 2-Biogas Construction Company3-Microfinance Institution 4-Enterprise Investment Company 5-Greenhouse Gas Approval Mechanism (CDM)6-Company in Need of GHG Benefits7-Innovation Funding Organization8-Catalyst
1
2
34
56
7
8.
Income per hh at $1080-$1260py…e@$189-$252…dp=$100 w/o and $77 wCO2e
Enterprise20,000 units @$400 w/ 20% marginif $800k w/c
Mfi-20,000 loans at $2312 yrs, 1% month + adj
Investment co2 year $824,000w/c loan + services
600,000 tonnes of GHG offset for$3,600,000+/- Mkt ~ $6 per tonne per yr
For 10 years
1-Rural Household 2-Biogas Construction Company3-Microfinance Institution 4-Enterprise Investment Company 5-Greenhouse Gas Approval Mechanism (CDM)6-Company in Need of GHG Benefits7-Catalyst Funding Organization8-Catalyst
1
2
34
56
7
8.
Income per hh at $1080-$1260py…e@$189-$252…dp=$100 w/o and $77 wCO2e
Enterprise20,000 units @$400 w/ 20% marginif $800k w/c
Mfi-20,000 loans at $2312 yrs, 1% month + adj
Investment co2 year $824,000w/c loan + services
Support for start-up& services
600,000 tonnes of GHG offset for$3,600,000+
$6 per tonne per yrFor 10 years
1-Rural Household 2-Biogas Construction Company3-Microfinance Institution 4-Enterprise Investment Company 5-Greenhouse Gas Approval Mechanism (CDM)6-Company in Need of GHG Benefits7-Catalyst Funding Organization8-Catalyst
1
2
34
56
7
8.
January 2006
Income per hh at $1080-$1260py…e@$189-$252…dp=$100 w/o and $77 wCO2e
Enterprise20,000 units @$400 w/ 20% marginif $800k w/c
Mfi-20,000 loans at $2312 yrs, 1% month + adj
Investment co2 year $824,000w/c loan + services
Support for start-up& services
600,000 tonnes of GHG offset for$3,600,000+
$6 per tonne per yrFor 10 years 4-6-8% IRR
PKG
1-Rural Household 2-Biogas Construction Company3-Microfinance Institution 4-Enterprise Investment Company 5-Greenhouse Gas Approval Mechanism (CDM)6-Company in Need of GHG Benefits7-Innovation Funding Organization8-Catalyst Euro 1 = Tk 81 = US 0.77
1
2
34
56
7
8.
Income per hh at Tk$ 67,000 to 79,000py…e@17% to 20%
Builds hh biogas units At Tk 25,000 w. 20% margin
MFI-makes monthly loans For 3 yrs, service chargeof 6% (simple) per year15% down payment
Supports enterprises
Supportssustainableinitiatives
Needs carbon offsets
Organizes purchasesand sales of GHGs
• Dot 1: Our “typical” household has income of Tk 67,000 to 79,000. The household spends between 17% and 20% of its income on energy sources (liquid fuels, batteries, solid fuels).
• A new biogas unit would have a “typical” capacity of four cubic meters. There are smaller and larger units that accommodate smaller or larger incomes or greater or lesser needs. All-in this translates to a capital cost of Taka 25,000
• Our household can afford an upfront payment of 15% • A microfinance institution offers loans on the following
terms: up to 85% of the cost, repayable over three years on a monthly basis with 6% annual simple interest / service charge added to the initial cost (thus for 3 years add 18% to the amount being financed)
• What would be the new monthly cost for the household?• What would be the incremental savings?• What happens if a 25% capital “subsidy” or other price
reductions are offered? What does that mean in terms of increasing the affordability of these units to lower income groups.
• Next: the role of avoided CO2 if monetized.
Connect the dots … update
1-Rural Household 2-Biogas Construction Company3-Microfinance Institution 4-Enterprise Investment Company 5-Greenhouse Gas Certification / Approval Mechanism (CDM CERs or VERs)6-Company in Need of GHG Benefits7-Innovation Funding Organization8-Catalyst … YOU! Euro 1 = Tk 81 = US 0.77
1
2
34
56
7
8.
Income per hh at Tk 67,000 to 79,000py…e@17% to 20% …Tk 11,400 to 15,800 py …TK950 to TK1317 per month
Builds hh biogas units At Tk 25,000 w. 20% margin
MFI-makes monthly loans For 3 yrs, service chargeof 6% (simple) per year15% down payment
Supports enterprises
Supportssustainableinitiatives
Needs carbon offsets
Organizes purchasesand sales of GHGs
Down paymentOf Tk3750 …Mo PMT of Tk697
Initial “cost”= 3750 … monthly savings of 253 to 620 … simple paybackof 6 to 14 months
1-Rural Household 2-Biogas Construction Company3-Microfinance Institution 4-Enterprise Investment Company 5-Greenhouse Gas Certification / Approval Mechanism (CDM CERs or VERs)6-Company in Need of GHG Benefits7-Innovation Funding Organization8-Catalyst … YOU! Euro 1 = Tk 81 = US 0.77
1
2
34
56
7
8.
Income per hh at Tk 67,000 to 79,000py…e@17% to 20% …Tk 11,400 to 15,800 py …TK950 to TK1317 per month
Builds hh biogas units At Tk 25,000 w. 20% marginSupports enterprises
Supportssustainableinitiatives
Organizes purchasesand sales of GHGs
Down paymentOf Tk3750 …Mo PMT of Tk697
Initial “cost”= 3750 … monthly savings of 253 to 620 … simple paybackof 6 to 14 monthsRevised initial cost = 3059 … revised monthly savings of 382 to 749 …simple payback of 4 to 8 months
2.5 tonnes py CO2e @ Euro 6 pt py5 year forward purchase … NPV of2.5*6*5 at 10% discount rate equalsTK4606 = 18.4%
697 568 New PMT
25,075 versus 20,455 Add: finance charge
1.1817,335 New Finance Amt
3,059 New Down Payment
3750versus305915%20,394 Adjusted Cost
Down Payment 25,000 Original Cost
18.4%equals4,606 NPV of CO2e
10%Discount Rate
12151215121512151215
486486486486486TK per 2.5 tonne
2.52.52.52.52.5TPY
54321YEAR
2008-2012
Investment Capital
Donations and Carbon Value
Energy for EnvironmentAnd Development
$190 million
Energy Enterprises andCustomer Finance
People Planet
$150 million
$40 million
$202 million
17.1 millionwith modern
energy
16.7 millionMetric tons of carbon dioxide
Saved*
374 investments
$213 million
Financial Leverage$1.4 B
© E+Co, Oct 2007© E+Co, Oct 2007
$20 million carbon monetizationTo E+Co enterprises
~6%
P+P Notes plus Managed Accounts
*Monetize 4-6 mts at ~$11 pt, 50-50 with enterprise