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Walk the TalkBusiness Model of

ADBs 567 kWp Rooftop Project

Aiming Zhou

Energy Specialist

The 6thAsia Clean Energy Forum20-24, June 2011

Manila, Philippines

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Content

Approaches for Solar Project Financing

Purposes of ADBs Rooftop Solar Project Corporate

Technology Business Model

Details of Procurement Process

Pre-Bidding

Bidding

Implementation

System Specification/Performance

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Approaches forSolar Project Financing

Bankable SolarProjects

PPA

Utility Owned

System Lease

Contractual Intermediary

User Owned Others

Fia

nncing

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SunEdison Solar Business Model

SunEdison pays for unused roof spacefor the option to locate PV system there

SunEdison studies, design, finance and

build the solar power plant; it operates,monitors and maintains the solar facility

SunEdison sells solar electricity to thebuilding owners at competitive tariffthrough PPAs that maximize the use oftax credits and other incentives

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1. Greening ADB Building Operations

Energy Efficiency (chillers, lighting etc.)

Solar Power Supply to ADB Headquarter Bldg

Others

Purposes of ADB567 kWp Rooftop Solar Project

2002ADB

EnvironmentPolicy

2003Environment,Health and

Safety Policy

2004Six SigmaProgram

2007

SustainabilityReport

2009LEED

CertificationProcess

2011 beyond

Sustainabilityat ADB HQ

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1000000

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>27

MWh

US Cents per kWh

# of MWh sold at each price point

Why Solar Energy

In 2010, $100 billion (approximately 5%) of global retail electricity

demand could be competitively addressed with solar power~600 GWs ($2 Trillion of Solar)

201020152020

Area of solar competitiveness

ElectricityPrice Rising

Source: Jigar Shah, 2011

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ADB Headquarters Complex

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ADB Headqauters Average Daily Load Profile

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Solar Energy Potential in Manila

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2. Technology Demonstration

3. Business Model, build-operate-transfer with PPA

Purposes of ADB567 kWp Rooftop Solar Project (continued)

ADB

Suntech/PropmechConsortium

PPA Power

Financing (commercial financiers) Construction (567 kWp)

Operation (~ 600 MWh per year) Transfer (buyout option within 15 yearsand free at year 16)

Portion of Facility Building rooftop isleased for 15 years at $1/sq meter, total

estimated area size is 5,166 sq meter Solar power is sold to ADB at the ratedecided by the bidding

Commercial Financier

Business

Financing

Loan

Repayment

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Details of Procurement Process

1. Pre Bidding Screening and clearance of legal, technical and commercial aspects

for the project within Manila Jurisdiction Internal process for project development and approval by ADB

Management

2. Bidding Process The Bidding Process: Conception pre- qualification criteria Draft technical and legal specification document Invitation to bid to qualified bidders (July, 2010) Selection of contractor / PPA signed

3. Project Development Construction (5-6 months) Trial operation and normal operation (December, 2011)

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Bidding Procedures Single-Stage: Two-Envelope

Deadline

ADBApproval

Preparation Evaluation I Evaluation II

TechnicalProposal

FinancialProposal

FinancialFinancial

TechnicalProposal

FinancialProposal

Technical

STOP

ADB

Approval

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Diagram of ADB Rooftop Solar System

567 kWpRooftop PV

System

ADB Substations

Meralco

34.5KV/380Y/200V

ADBHeadquaters

Compus

Inverters

600MWh/yr

Switch Busbar

18,300 MWh/yr

The solar system supplies about 3%of the electricity consumption in

ADBs complex

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ADB Rooftop Solar Project Visual Impact

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Highlights No upfront cost to ADB

The business model uses a PPA between the Suntech/Propmech

Consortium (Project Implementer) and ADB (End User), wherebythe project implementers bear the investment cost and O&M costsand user purchase the electricity at bid price.

ADBs credit worthiness helps the consortium

secure non-recourse loan financingPPA will help the project implementers to secure financing fromlocal commercial financiers. With a 15-year PPA from ADB, thisproject becomes a bankable project

Challenges to replicationChallenges could arise in countries that have regulated andpartially deregulated electricity markets. This model needspermission for third party-owned systems to sell to end users

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Thank You !

Contact: azhou@adb.org

More information:

www.adb.org/clean-energy