AHK-Geschäftsreiseprogramm German Trade Mission to Malaysia. Financing Options for Solar Energy Projects - PDF

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AHK-Geschäftsreiseprogramm German Trade Mission to Malaysia Financing Options for Solar Energy Projects Jens Hauser, GFA ENVEST Kuala Lumpur, December2011 The Financing Advisory Instrument of BMWi s EnEff

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AHK-Geschäftsreiseprogramm German Trade Mission to Malaysia Financing Options for Solar Energy Projects Jens Hauser, GFA ENVEST Kuala Lumpur, December2011 The Financing Advisory Instrument of BMWi s EnEff & RE Export Initiatives BMWi s Financing Advisory Instrument Modul 1: National and International Financing Support Modul 2: Financing Support by German Institutions Modul 3: Carbon Finance Modul 4: Matching and Innovative Financing Concepts Tools and Methods: Report on Financing Mechanisms Presentation Individual Counselling Target Group: German Trade Delegation Members and potential Business Partners in the Host Country Modul 1: National and International EnEff Financing Support National Support to Renewable Energy Development Feed-in Tariff on the basis of the Renewable Energy Act 2010 Key Features of FiT Regulation: Fixed Feed-in Tariff for up to 21 years with Annual degression rate of 8% with regard to new power plants Guaranteed access to the grid Quotas / Annual RE capacity target 217 MW in 2012, Solar 1MWp = 35 MW Solar projects only eligible up to 5 MW Foreign investors eligible for FiT if project share is 50% National Support to Renewable Energy Development Feed-in Tariff on the basis of the Renewable Energy Act 2010 PV Feed-in Tariffs rate: Responsible Agency: 24 kw to 72 kw 1,18 RM / kwh Sustainable Energy 72 kw to 1 MW 1,14 RM / kwh Development Authority (SEDA) 1 MW to 10 MW 0,95 RM / kwh * *Renewable energy Malaysia gets FIT for action, 2011 GTFS - Green Technology Financing Scheme 2010 to 2013 programme to help incorporating green technology in projects related to energy, transport, urban development and waste management: 1,5 BN RM Subsidised Loans for producers and users of green technologies Terms and Conditions For producers: loan up to 50 Mio. RM with maturity up to 15 years For consumers / users: loan up to 10 Mio. RM with maturity up to 10 years Legally registered Malaysian-owned companies Interest subsidy of 2% - Islamic Banks +1% additional subsidy Disbursement via partner financial institutions Eligible Projects Minimize degradation of environment, zero or low green house gas emission; Safe for use and promotes healthy and improved environment for inhabitants; Conserve the use of energy and natural resources and promote the use of renewable energy resources All renewable energy technologies eligible for financing Green Technology Financing Scheme: International Financing Support International organisations provide equity and loan financing for larger investment projects Loans and project finance / equity participation Usually larger projects 25 Mio. EUR ALA Mandat: 1 BN EUR for Asia Financing support via loans, equity, guarantees, technical assistance New Country Strategy for Malaysia in preparation Loan programm in development AIF - ASEAN Infrastructure Fund Modul 2: Export Financing Support by German Institutions KFW Renewable Energy Financing KfW supports German renewable energy projects in Germany and abroad Eligibility Investment by German company Company s turn over 500 Mio. EUR Project must be in compliance with EU environmental standards Terms and Conditions Loan volume up to 100% of investment costs maximum 10 Mio. EUR Interest rates on individual basis according risk, creditworthiness and capital market development Maturity up to 10 years with up to 2 years grace period Technical life-cycle 10 years: maturity up to 20 years with up to 3 years grace period Fixed interest rates for 10 years Application Application to be put forward before contract closing Tel. +49 (0) KFW IPEX Export Financing KfW IPEX-Bank provides project finance and offers trade and export finance. Target Group & Eligibility German Exporters and Foreign Buyers of German Exports Goods and Services Financed are exports insured via HERMES Credit Cover (not conditional) Substantial proportion of German technology and service Terms and Conditions Loan volume up to 25 Mio. EUR / max. up to 85% contract value Individual, case-by-case decision on interest rates Maturity: minimum 4 years Application Application for Supplier Credit at every German Bank Institute Application Buyer Credit turn to KfW IPEX-Bank GmbH Internet: Small Ticket Europe Export Finance for Small and Medium Companies Small Export Loans 0.5 to 5 Mio. EUR with maturities ranging from 2 to 5 years Information: DEG Deutsche Investitions- und Entwicklungsgesellschaft mbh An experienced partner for German private-sector companies investing in developing and emerging-market economies. Variable equity participation in the company in the investment country minority stake with clearly defined exit strategies DEG Instruments Project-specific mezzanine finance Long-term loans between 4-10 years maturity, max. 25 Mio. EUR Guarantees e.g. risk sharing with local bank Contact: Phone: +49(0) DEG Financing of Feasibility Studies DEG uses funds from the Federal Ministry for Economic Cooperation and Development (BMZ) to co-finance feasibility studies Target Group Financial Support Requirements Application SMEs located and operating within the EU with a turnover of up to 500. Mio EUR DEG provides a up to 50% of the feasibility study cost s upper limit EUR Preparation of realistic private sector investment plausible in terms of successful implementation and profitability Further information and application form - Phone: +49 (0) Buyer and Supplier Credit: Up to 85% of project costs Loan volume EUR Medium to long-term maturity Semi-annual instalment AKA Export Finance Bank Customized financing and processing of international trade-finance transactions Advantages for the exporter: Immediate payment on delivery Costs of financing to be borne by the buyer Advantages for the importer: The export transaction is supported by an attractive financing proposition Long term financing for low volume transactions Preservation of local credit limits AKA Bank: Export Credit Cover Euler Hermes Export Credit Cover protects German Exports against payment defaults and cash losses, due to: Political Risk and Economic Risks Eligibility Export of goods and services and structure financing / project financing None-marketable, but justifiable risks abroad Special focus on small and medium enterprises No minimum export value Terms and Conditions Variable maturity for energy efficiency, renewable energies up to 18 years Flexible redemption payment possible e.g. annuity Administrative fee + premium Export Credit Cover Instruments: Manufacturing Risk Cover Supplier Credit Cover Buyer Credit Cover Constructional Works Cover Cover of Project Financing and Investments Guarantees Contact: Phone +49 (0)40/ Modul 3: Carbon Financing Carbon Financing Clean Development Mechanism Based on the Flexible Mechanisms of the Kyoto Protocol: Instruments to Co-Finance Sustainable Energy Investments (GHG mitigation) CDM Clean Development Mechanism Allowing the Annex I countries to meet part of their GHG reduction commitments using Certified Emission Reductions (CERs) from GHG reduction projects in Non-Annex I countries CDM allows to realise emission reduction cost effectively - wherever it is cheapest globally CDM stimulates sustainable development and emission reductions, offers industrialized countries flexibility in how they meet their emission reduction targets Host country (e.g. Malaysia) profits from technology transfer and future emission reductions Project in host country profits from additional revenues (co-financing) CDM Project Cycle During RE Project Running Phase During RE Project Development *UK Department for Environment, Food & Rural Affairs, 2007 CDM in Malaysia An applied co-financing instrument Non-Annex I Country CDM possible 103 projects registered 49 projects under validation Most projects in the area of methane capture, palm oil and biomass No solar energy project registered Malaysia s Grid Emission Factor: 836 CO 2 /GWh co-financing potential for GHG mitigation projects: 1 US-$ cent / KWh Requirement for companies registered in Malaysia: Equity of RM + project financing secured Current Kyoto Mechanisms valid till 12/2012 Designated Authority: Ministry of Natural Resources and Environment - Mr. Shahril Faizal Abdul Jani: CDM Project Example Value of CDM as Co-Financing Mechanisms 5 MW Solar PV Power Project in Tamil Nadu, India Capacity Power Production Equity IFC Grant Bank Loan FIT Carbon Credits 5 MW PV Plant 8322 MWh/year 4.2 mio EUR 2.9 mio EUR 7.3 mio EUR 0,16 EUR/kWh 7862 per year Scenario Investment based on equity and debt capital only Investment based on equity, bank loan and IFC grant IRR 6,85 % 10,84 % Plus carbon financing 11,83 % Modul 4: Innovative Financing Instruments CDM Program of Activities Programme of Activities (PoA) A PoA is a voluntary coordinated action implemented via an unlimited number of CDM Project Activities, which is a multitude of GHG reduction activities occurring over time in a single or multiple sites that is defined in the baseline methodology Development Individual Project Owner Emission rights Payments PoA Manager Registration Management Emission trading RE Measures Reduction of: GHG emissions fossil fuel consumption operating costs Potential project type: Solar thermal and cooling installations Summary FiT as support mechanism for RE development Investment friendly conditions and support mechanisms International financing support for larger investment projects only German trade and export financing instruments available CDM as co-financing instrument - valid till end of 2012 at least Thank you for your attention! GFA ENVEST Jens Hauser
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