Financing possibilities of EE-Technologies in Serbia and Montenegro

Transcription

1 Financing possibilities of EE-Technologies in Serbia and Montenegro November 29, 2016 Nikola Ćatović, Consultant at MACS Reinhold Metzler, Senior RE Consultant at MACS MACS Energy & Water GmbH Arnsburger Str. 64, Frankfurt, Germany Tel , Fax Internet:

2 Three gears that make a project work Developers: Professional project preparation Banks: Appropriate financial mechanisms Institutions: Supportive Regulatory framework 2

3 Serbia: Development of Regulatory Framework Energy Law (2004, 2011, 2014) RE directives/by-laws, (2009, 2012, 2016) Subsidy scheme for feed-in tariffs Standardized Bankable PPA(2009, 2012, 2016) Financing mechanism in place

4 Serbia: Current Feed-in Tariff Capacity [P] Feed-In Tariff Max operating hours under feedin-tariff scheme [MW] [c /kwh] [h] up to *P *P up to

5 SHPP in Serbia: Distribution by installed capacity 5

6 SHPP in Serbia: Implementation by year 6

7 Montenegro: Regulatory Framework Law on Energy Law on Concessions Law on water use Law on environmental protection Law on forest use Law on expropriation Law on construction 7

8 Montenegro: Regulatory Framework Hydrological assessment Grid connection possibilities Norwegian aid UNDP Exploring 45 watersheds EBRD SHPP cadaster SHPP

9 Montenegro: Regulatory Framework : 0 SHPP implemented : 6 shpps 2016: 12 under construction All SHPP projects subject to public biding and concessions on rivers Concessions approved for 38 SHPP projects Limited availability of public data Ongoing concession announcement 9

10 EE/RE Financing possibilities Local financial intermediaries Programmes supported by IFIs Local financial intermediaries International financial institutions Renewable energy projects 10

11 EE/RE Western Balkans: Availability of financing Financing commitments (in mln EUR) Available funds (in mln EUR) Source: WBIF, EE/RE Financing Facilties in WB6, Current status and opportunities, 2015, Vienna 11

12 Green for Growth Fund (GGF) Intiated by: KFW and EIB (2009) Tagret region*: SEE, ENR, MENA Investment targets Investments in Financial Institutions Investments in Non-Financial Institutions Investments in Renewable Energy Projects Investments in Serbia Partnership with 4 Fis and total commitment of 60 mln EUR for EE/RE financing *South East Europe, European Neigbouring countries, Middle-East and North Africa 12

13 EBRD 13

14 EBRD-WeBSEFF Partner banks: Komercijalna banka and Banca Intesa Technical eligibility criteria: SHPP up to 10MW + positive EET WT up to 10MW + positive EET PV up to 0.5MW (not eligible for incentive payments) other technologies up to 50MW simple payback period bellow 15 years financially viable RE project loans about 3,200, millions available for Western Balkan and 11.5 millions for incentive payments and technical cooperation 14

15 EBRD-WeBSEDFF Technical eligibility criteria WT up to 20MW not eligible for incentive payments but new turbines SHPP up to 10MW PV up to 5MW Production or processing of RE fuels (not eligible for incentive payments) Average expected loan maturity years A minimum efficiency (utilization) rate for renewable energy projects Incentive payments for CO2 savings Financed projects 4 Run-of-river SHPP total capacity 2.7MW in Kopaonik region loan amount 2.7 mln EUR (50% of Total Investment) 15

16 KFW Credit lines with commitments of mln EUR for the Western Balkans region (in co-operation with EIB, EBRD, CEB) Dedicated credit programmes for EE/RE Partner banks in Serbia UniCredit Bank Erste Bank ProCredit Serbia Čačanska Banka(now Halkbank Serbia) 16

17 IFC The Balkans Renewable Energy Project Development of small hydro power plants (SHPP) market in the Western Balkans countries. Supported by the Ministry of Finance of Austria 17

18 European Union-IPA IPA Cadastre for small hydro power plants EU supports the development of a new cadastre for SHPPs on the territory of the Republic of Serbia. the cadastre of SHPPs should cover the small hydro power plants with estimated power between 100 kw and 10 MW The cadaster will cover SHPPs, SHPPs that are currently in construction, and identified new locations. 18

19 The Path to Financing: Project appraisal Project appraisal process Loan application Technical - Legal DD Risk Assessment Financing approval Monitoring Verification Technical Consultant Bank Technical consultant 19

20 Due Diligence Technical Due Diligence Legal Complience check Environmental eligibility check Budget plausibility 20

21 Provision and Financing of Technical DD Provider of services: External or in-house technical consultant Financing of TDD services: Through Technical Assistance Funds Financed by the Client Costs covered by the Bank Costs shared between Investor and the Bank 21

22 Scope of Technical DD Assessment of hydrological study Evaluation of project layout Plausibility check of forecasted generation Assessment regarding the suitability of the choice of electro- and hydro-mechanical equipment Plausibility check of investment budget and draft proposal of the cash-flow model 22

23 Legal compliance check Compliance of project design with obtained permits (minimal requirement: Building permit) Compliance with regulatory framework needed for the subsidy scheeme (feed-in tariffs, privileged power producer status for 12 years) Evaluation of ownership issues on site Evaluation of project complience with grid connection requirements imposed by the Electricity Distribution Company 23

24 Environmental eligibility check Eligibility check of requirements for environmental protection (with focus on nature protection areas) Compliance with environmental regulations Evaluation of mitigation measures regarding potential negative impacts on environment (fish migration, protection of aquatic life, ecological flow, errosion effects, damage due to construction) based on current EU standards 24

25 Financing options Loans Project and corporate financing On-lending through intermediary institutions Equity Direct equity investments (at least 30% equity share) Private equity funds (less likely for SHPPs) Structured Finance Products including credit guarantees, liquidity facilities, securitizations, etc. More likely for projects above 10 mln EUR 25

26 Financing options Feed-in tariff availability period: 12 years Loan tenor: 7-10 years (average) Baloon 26

27 Great RE impact High electricity rate Low environmental impact Regulatory obstacles Unexperienced RE Developers Negative experience of local banks 27

28 Thank you for your attention! Visit our website at: November 29, 2016 Nikola Ćatović, Consultant at MACS Reinhold Metzler, Senior RE Consultant at MACS MACS Energy & Water GmbH Arnsburger Str. 64, Frankfurt, Germany Tel , Fax Internet: