bank aus verantwortung financing pv/solar energy projects in indonesia paul heinemann – director...
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Bank aus Verantwortung
Financing PV/Solar Energy Projectsin Indonesia Paul Heinemann – Director DEG Office Jakarta
Thorsten Schneider – Senior Project Manager KfW Office Jakarta
May 2014
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KfW Group - A promotional bank with a wide array of functions
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Developing and emerging-market
countries
Financial Cooperation
(Gov. to Gov.)Public Sector
International Financing
We promote Germany
Promotion construction
of new housing and modernisation
as well as education
Promotion SMEs, business founders,
start-ups
Financing municipal infrastructure
projects and global loans Germany
agency business for Federal
Government
Domestic Promotion
We ensure internationalisatio
n
International project and
export finance worldwide
Public & Private Sector
Business area Mittelstandsbank
Business area Privatkundenba
nk
Business area Kommunalbank
KfW IPEX-Bank
KfW Entwicklungsbank
Developing and emerging-market
countries
Private Sector Promotion
DEG
Promotion of environmental and climate protection
We promote development
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DEG - Activities in Renewable Energy
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Renewable financing since to date:-USD 750 million in total-more than 40 projects globally
Financing of private sector investments with a positive development impact
30 % of annual commitments in climate protection projects including renewables
In depth-expertise in renewable energy built-up from a long track-record of projects globally, comprising hydro, wind, solar, biomass and geothermal
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DEG criteria for financing renewable energy/grid-connected solar/PV (private sector)
Financing›Equity ratio of appr. 30% with adequate cash-flow oriented structurePromoter/Sponsor› Sector experienced, being at risk› Corporate governance, transparencyConstruction›Implementation complexity relatively low, but EPC contract with completion and performance guarantees preferred›Arrangements to cover cost-overrun risksOperation›Experienced operator, long-term O&M contract›Proven technologies from well established manufacturers/suppliers with warranties/power output guarantees (insurance-backed)
Sales/Off-take
›Solar still highly relying on subsidies
›Regulatory Framework/Incentives (?):Feed-in tariff (obligatory dispatch) and/or long-term PPA (bankable, take-or-pay)
›Creditworthiness of off-taker (commercial attractiveness to use solar)
›Grid connection (who is responsible), grid management impactsEnergy Resource
›Power generation estimation (solar radiation, planned losses etc.) to be confirmed by independent technical engineer same as adequacy of equipmentPermits/Licenses
›All required permits, rights, licenses etc. in place including land
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Solar/PV in Indonesia
Challenges:
›Initialized first tender of 140 MW very scattered
›Small-scale projects due to size difficult to be financed stand-alone as project finance
›Lack of solar-experienced players in Indonesia (e.g. JV local (permit) developer and int. experienced solar developer/investor)
Possible approaches:
›Bundling of projects with funding via holding (scaling potential), debt or equity
›Initially on corporate balance sheet
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What we know:
›Government targets to increase renewable proportion (however, not mandatory), other interests: increase electrification rate, substitute expensive diesel
›Announced solar tariff (max. 0,25 USD/kWh, reverse auction), 20-y PPA
›First tender of around 150 MW in pre-defined regions was initialized
What we still need to understand:
›Current status?
›Bankability of template PPA (e.g. take-or-pay?, curtailment risks)
›Specific tender criteria/new concept (which/when)?
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KfW Development Bank - Financing Structures for the public sector Tailor-made implementation structures for different investment volumes
Utility Financial Intermediary
Government Government
(usually)
big investments
(usually) many
small investments
PLN
(usually)
big investments
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1,000 Islands RE for Electrification Program, Indonesia Increase Electricity Access through RETs and Grid Expansion
› Situation at the Outset
› Low electrification rate, particularly beyond Java-Bali grid structure
› Remote areas with electricity access relying primarily on diesel generation sets, despite abundant renewable energy resources
› Government priorities: a) increase electrification rate, b) increase RE share
› Approach
› Support governmental efforts in expanding electricity access through least cost RE technologies and grid expansion
› Objectives/ Impacts (pilot phase)
› Electricity access for 20,000 households
› Reduced GHG emissions and reliance on diesel
› Contribution of FC (pilot phase)
› KfW funds: EUR 65 mil. promotional loan
› Total costs: EUR 85 mil.
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Search KfW Tenders on Germany Trade and Invest http://www.gtai.de/GTAI/Navigation/EN/Trade/search-kfw-tenders.html
Bank aus Verantwortung
Contact
Thorsten SchneiderSenior Project Manager KfW (Energy)[email protected]
Address:Menara BCA, 46th floorJalan M. H. Thamrin No. 1Jakarta 10310Indonesia
Phone: +62 21 23 58 74 31/41 Fax: +62 21 23 58 74 40
Jochen SalethDirectorKfW Office Jakarta [email protected]
Paul HeinemannDirectorDEG Office Jakarta [email protected]