leasing companies and sustainable energy investment
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Leasing companies and Sustainable Energy investment – a plethora of exciting business opportunities IFC experience in Europe, Middle East, and North Africa regions Prague January 1-3, 2012. IFC. Sustainability Additionality – advisory with focus on creating own internal capacity - PowerPoint PPT PresentationTRANSCRIPT
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Leasing companies and Sustainable Energy investment
– a plethora of exciting business opportunities
IFC experience in Europe, Middle East, and North Africa regionsPrague
January 1-3, 2012
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IFC
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• Sustainability
• Additionality – advisory with focus on creating own internal capacity
• Member of the World Bank Group – political risks mitigation
• Efficiency - compare to other Development Institutions
• IFC is the largest global development institution (182 member countries), focused on the private sector in developing countries, working in their frontier regions - 20-30% of portfolio, investment portfolio in Russia - $2.24 bln
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IFC Sustainable Energy Investments via FIs
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Country: PeruPFI: BBVA Banco ContinentalIFC investment: $30M credit line
Countries: Central/Eastern EuropeFIs: Multiple banksIFC investment: $321M in lines of credit and guarantee facilities
Country: ChinaFIs: Industrial Bank, Bank of Beijing and Shanghai Pudong Development BankIFC investment: $275M risk sharing facilities support SE loans of more than $500M
Country: TurkeyFI: Yapi Kredi LeasingIFC investment: $75M credit line
Country: MexicoPFI: VerticeIFC investment: $20M line of credit for energy efficient housingOngoing: Panama, Costa Rica,
Country: BrazilFIs: Banco Real & UnibancoIFC investment: $80M credit line
Country: Russia, Ukraine, Belarus, FIs: 12 Financial Institutions IFC investment: $185M in credit lines
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Key Takeaway from IFC experiencein Europe, Central Asia, and Middle East and North
Africa regions
•There is a HUGE market for Energy Efficiency leasing
finance
•Market is DIVERSE – many niches
•Niche LEADERSHIP possible
•IFC provides funding and/or guarantees + Advisory
Services
•COMPETITIVE EDGE in new markets
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• Achieving 45% energy efficiency potential in Russia would cost USD 320 billion
• Energy Efficiency Potential (WB study):
Manufacturing industry: $37 billion
Housing and utilities sector : $43 billion
Power sector: $106 billion investments annually
• Developing economies need $97 billion in SEF annually *
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Dispersed resource
New business opportunities for banks and leasing companies: financing of energy and resource efficiency projects in SME and corporate sector
* Source: McKinsey Global Institute 2008
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A capital investment resulting in improvement against baseline:
• Energy Efficiency (EE): Decrease in per unit (and/or total) energy consumption
• Clean Energy (CE): More access to energy with less impact on the environment (including renewable sources)
• Cleaner Production (CP): Increase in material yield, reduction in emission of waste and hazardous substances
A repair/upgrade,
replacement of equipment units,
expansion of facilities
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Sustainable Energy Finance Project
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• Expanded market share through new business line:
• Innovative product/first mover advantage• Sell on value to customer, not pricing• Monetize existing client base, attract quality new clients• New marketing channels through vendor partnerships
• Improved risk profile of portfolio:• Energy cost savings as a part of cash-flow• IFC risk sharing products
• Positive social and environmental impacts:• Enhanced brand reputation, PR opportunities
Key Benefits for Financial Institutions
For Informational Purposes Only7
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• 12 partner Financial Institutions
• 250 projects / $213M worth financed
• Annual energy savings over $35M
• Annual energy consumption down by 1674GWh
• Greenhouse gas emission down by 450 000 tСО2 per year
• Median project amount $300K ($900 average)68
1412793
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5
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Food Energy and Utilities
Con-struction
Chemical and Plastic
Light Metals and Machinery
Glass Wood Process-ingServices
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Russian experience
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Work with Financial Institutions
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Investment + Advisory
Standalone Advisory
EMEN
AR
USS
IA
Regional expansion
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EE/RE Leasing FeaturesAll types of Leasing Companies can benefit from Partnership Opportunities
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Partners can be:
• Equipment Manufacturers
• Product Retailers
• Installation Contractors
• Electric and Heat Distribution
Companies
• Engineering Consultants
• Marketing and Sales
Representatives
• Energy Services Companies
(ESCOs)
Benefits under our terms:• Many types of equipment
may be financed
• No minimum or maximum
size
• Can be utilized in all sectors • Equipment may be reused (co- generation, large boilers,
industrial processes)
• New marketing channel
through new vendor partnerships
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CONFECTIONARY FACTORY
Process equipment: new automatic chocolate line
Investment: $233,000
Energy cost reduced: 33%/unit
Payback: 2 years
Improved product quality, increase in output capacity
CAR MANUFACTURING PLANT
Lighting system retrofit:
new automatic lighting management system
Investment: $300,000
Savings: $100,000/year
Payback: 3 years
Improved quality of lighting
SUNFLOWER OIL
PRODUCER
Renewable energy: boiler fueled by sunflower seed husks
Investment: $1,100,000
Gas savings: 660,000 m3/month of gas per month ($39,000/month)
Payback: ~2.5 years
EXAMPLES
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YAPI KREDI LEASING
Turkey (‘09-10)
Process equipment light industry
Investment: $50M IFC loan
Energy cost reduced: 36%/unit
Projects: 39
Median project amount: $315 ($700 average)
Financed: $28M
Improved product quality, increase in output capacity
BOILERS MANUFACTURING
PLANT
Process equipment: bending machine + plasma cutting system to make gas boilers
Investment (leasing): $194,000
Savings: $235,000/year
Payback: < 1 year
Improved quality
EXAMPLES
CO-GENERATION
Energy equipment: new gas piston cogeneration machine
Investment: $2,4M
Energy consumption per unit of output down: 33%
Annual energy savings: $637 000
Payback: 2 years
Improved product quality, increase in output capacity
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Contacts
Europe and Central Asia Region
IFC Advisory services :
Maxim Titov Program Manager
Russia Sustainable Energy Finance Program
Tel: +7 (495) 411 7555 [email protected]
For Informational Purposes Only13
Elena Shonya Deputy Program Manager
Russia Sustainable Energy Finance Program
Tel: +7 (495) 411 7555 [email protected]
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• Eligible transaction must be a project to finance reconstruction, renovation or refurbishment
• Financing may be in the form of sub-loans/leases, aimed at investing into fixed assets and decreasing energy consumption of the borrower or utilizing renewable energy
• Financing for new projects, not refinancing of an existing loan/lease
• Eligible are projects such as:
• Generic equipment (HVAC, lightning, compressors, etc)
Energy savings per unit (ESU) ≥ 15%
• Process equipment
Energy savings per unit (ESU) ≥ 15%
• Cogeneration (CHP)
Heat utilization ≥ 60%
Eligibility Criteria
For Informational Purposes Only14
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What are Sustainable Energy Finance Projects?
Sector Potential Borrower Energy Efficient EquipmentIndustrial Industrial companies,
SMEs and MSMEs•Energy efficient production lines•Waste heat recovery devices•Heating systems upgrades•Efficient boilers and heaters•Fuel switching (coal-gas, coal-biomass)•Electricity peak-load control systems•Cogeneration units
Commercial Housing complexes operators, maintenance companies;Housing developers
•Heating and ventilation equipment•Control and metering systems•Electricity peak-load control systems•Air-conditioners•Heat pumps, solar water heaters
Municipal Municipalities, district heating companies, streetlighting operators, public buildings operators
•Boilers for district heating as well as for public/municipal buildings•Heat exchangers, pipes for infrastructure projects•Cogeneration units•Complex EE projects
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