energy saving financing jcm...

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Energy Saving Financing

JCM Implementation

Sept 11, 2018

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Principle of Energy Saving Financing

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Clear objective of investment

Self financing source of repayment

Enhance borrower’s competitiveness

Strengthen borrower’s long term cash flow

Energy Saving Financing – Key Points

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Borrower/ Investor

Energy Performance Contract

(Energy Saving Guaranty)

Self-Financing Project

ESCO or Suppliers KBank

Energy Efficiency Financing Model (1/2)

Funding

Repayment from Saving

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Energy Efficiency Financing Model (2/2)

Base consumption

100%

Guaranteed Portion

New

En

ergy

Co

st

New

En

ergy

Co

st

New

En

ergy

Co

st

ESCO

guarant

ee = 30% 5%

5%

ESCO Compensate Shortfall of

5.0%

Saving Shortfall Saving Surplus

Actual Result

Surplus

( sharing

as agreed )

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100%

70%

25%

70%

30%

Loan Repayment

Additional Cash Flow

Base Energy Cost

New Energy Cost

Saving from Energy Cost Additional

Cash Flow

Year 1 – Year 5

5%

Cash Flow Profile (Pre and Post Project)

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EE Financing Project Evaluation

Evaluation Process

Project Specific

Borrower Specific

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Project Specific Evaluation

Esco

evaluation

- Track record in business and knowhow - Certification / Reference - Business reputation - Financial Strength

Energy

Performance

Contract

- Level of details/ Standard of contract - Fairness and clarity

Project payback analysis

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Borrower Specific Evaluation

Industry Condition

General Credit and financial condition

Cash Flow and Debt Service burden

Collateral Structure

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Opportunities and Challenges

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Opportunities of EE Financing

• Low cost funding • Technical Assistance • Investment subsidy

Lower implementation and equipment cost/

faster pay back

Growing awareness of energy efficiency and

renewable energy

Established ESCO’s infrastructure

Government Support/ Other international

Agencies

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Challenges of EE Financing

Deal acquisition Project Evaluation

Low energy price environment

End-user confidence and understanding

Business priority/disruption

Size of investment

Some EE measures has become commodity

Qualification of ESCO/Supplier

Nature of assets related to project

Understanding of Technical aspects

Deal size and cost of due diligence

Collateral structure issue

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Special Financing Package

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Energy Revolving Fund

Financing Condition General Condition

Up to 5 years term loan

Up to THB 50 million /project

Interest rate at 3.5% p.a. (fixed)

Up to 7 years Project pay back

Cover any type of building (Industrial/Commercial)

Cooperation with DeDe in the form of soft loan through 8 Banks

Equipment change/Productivity Improvement/Renewable Energy (self consumption)

50 Project Prescreening by DeDe

No restriction on ESCO/Supplier

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Energy Saving Project Examples

Factory Retrofit

Solar Rooftop

Lighting (LED)

Building Retrofit Production Improvement

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KBank Contact Person

Ittiporn Intravisit

02-470-6991

ittiporn.i@kasikornbank.com

081-655-1116

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