Development Agenda for Climate Investments Lagos, 17 April 2018 16-04-2018
IFU IN BRIEF Independent government-owned fund, operating on commercial terms Promotes economic and social progress in developing countries 146 Provides risk capital and advice investment countries for projects having a Danish interest Total contracted investments Established in of more than 3.2 Bn USD 1967 28 bn USD invested in share capital and loans Leverage/mobilisation of capital: factor 8-9 PAGE 2 16-04-2018 ENIGERIA ENERGY FORUM
IFU’s INVESTMENTS AND RETURNS 40 – 50 annual investments New and additional financing 1200 Active portfolio of 221 projects Average commitment of 5 - 7 years Investments in more than 100 countries USD 1.0 bn 12.0 % Contracted investments in 2016 USD 185m The average annual gross return Capital under on share capital (2012 - 2016) management PAGE 3 16-04-2018 NIGERIA ENERGY FORUM
IFU IS FUND MANAGER FOR OTHER FUNDS E.G. IN COLLABORATION WITH INSTITUTIONAL INVESTORS IIP DCIF DAF Committed capital DKK 1.3bn Committed capital DKK 800m Committed capital DKK 500m Starting year 2012 Starting year 2014 Starting year 2016 Invested capital DKK 223m Invested capital DKK 673m Invested capital DKK 193m Number of projects 4 Number of projects 14 Number of projects 3 Investors: PKA, PBU Investors: PensionDanmark, PKA, PBU, Dansk Investors: PensionDanmark, PKA, PFA, IFU and the Vækstkapital, Aage V. Jensen Charity Foundation, Danish State IFU and the Danish State SIDE 4 16-04-2018 NIGERIA ENERGY FORUM
What is KIF Public Private Partnership Provides risk capital Operates on commercial terms for climate investments and climate-related projects Investment with a Danish interest PAGE 5 16/04/2018 NIGERIA ENERGY FORUM
What is a climate investment? • Renewable energy projects, e.g. wind, solar or hydro • Suppliers to renewable energy projects • Energy efficient projects, reducing GHG emissions by at least 20 per cent • Alternative energy projects, e.g. using waste as input • Transport projects, reducing GHG emissions • Production of energy saving material and equipment • Projects with the purpose of adjusting to climate change PAGE 6 16/04/2018 NIGERIA ENERGY FORUM
Nigeria’s climate investment potential • Grid-tied utility scale projects • Captive power projects • Energy efficiency projects – ESCO & other models • Mini- and micro- grids – powered by solar, wind, biomass, and small hydro • Gas projects • Diesel & LPFO displacement projects • Rooftop solar and wind • Residential renewable energy businesses • Manufacturing of components for wind & solar • Smart grid initiatives that enable renewable energy • Any project with net positive CO 2 impact PAGE 7 16/04/2018 NIGERIA ENERGY FORUM
AGENDA • Cost-reflective retail tariffs • Solving downstream issues • Transparent & predictable procurement • Innovation • Developers • Removing subsidies • Recognising the importance of distributed generation • Showcases and pilots • Banking learnings & diffusing knowledge • Government intervention projects PAGE 8 16/04/2018 NIGERIA ENERGY FORUM
CASE: Lake turkana, kenya KEY FACTS Project type Wind farm Country Kenya Status Under construction Fund participation USD15m Expected total investment USD 0.8bn • With 310, MW Lake Turkana is the largest wind farm in Sub-Saharan Africa. • Lake Turkana will provide 17% of Kenya’s installed electricity capacity. • 365 Vestas turbines are to be installed. • 15-year service contract with Vestas. • 20 years EUR based PPA with Kenya Power. • Construction of site and a 428 km transmission line has started. PAGE 9 16/04/2018 NIGERIA ENERGY FORUM
CASE: MWSC SOLAR, MALDIVES KEY FACTS Project type Solar farm Country Maldives Status Under construction Fund participation USD 1.5m Expected total investment USD 2.5m • Up to 2 MW rooftop PV solar plant. • Male Water and Sewerage Company (MWSC) is a desalination plant producing and delivering all drinking water to the capital of Male and to 80% of remaining country population. • The solar rooftop plant supplements and partly replaces the diesel-based energy generation by solar energy. • NPP and MWSC entered a 25-years USD based PPA. • First commercial solar plant on the Maldives. 1 st stage construction completed in January 2016. • EVENT VIA ‘INSERT’ / 'HEADER & FOOTER'. MAX ONE LINE PAGE 10 16/04/2018
CASE: dong energy, China KEY FACTS Project type Biofuel Country China Status Closed Fund participation USD 2m Expected total investment USD 3.3m • The project provided energy efficient refinery technology for the production of 2G bioethanol. • DONG Energy developed and established joint venture projects with large Chinese players that would promote the bio-based Inbicon technology in China, engage in the development of bioethanol plants and render services to them. • The Danish Climate Investment Fund decided on a case by case basis to invest in specific plants in joint ventures with Chinese partners that have acquired an Inbicon license. • DCIF’s shares in New Bio Solutions China A/S has been sold to Dong Energy. PAGE 11 16/04/2018 NIGERIA ENERGY FORUM
CASE: Nordic power partners, DAC CASE KEY FACTS Project type Financing renewable energy Country DAC Status In operation Fund participation USD 4m Expected total investment USD 7.8m Nordic Power Partners European Energy A/S • 51/49 JV between European Energy and DCIF • Established in 2004 • Developer of wind and solar projects as there is a strong need for qualified • 58 employees of 8 nationalities developers in emerging markets and very good commercial opportunities • Privately owned • European Energy and IFU provide staff resources in addition to NPP’s own • staff to find and develop projects in addition to the capital invested 365 MW of wind and solar parks (92% wind and 8% solar) • NPP invests in green field project development and brown field projects • within Equity growth from EUR 4m to EUR ▪ Wind 55m ▪ PV solar PAGE 12 16/04/2018 NIGERIA ENERGY FORUM
CASE: Esco asia, malaysia KEY FACTS Project type Energy saving solutions Country Malaysia Status In operation Fund participation USD 1.8m Expected total investment USD 3.2m Seri Negeri, the main office of the Melaka State Government • Pilot project in Malaysia, with expansion potential in South-East Asia, providing energy efficiency solutions for buildings. • The project is a JV with Danish Energy Management & Esbensen A/S (DEM). • DEM and DCIF were contracted by Melaka State Government to provide EPC services for the first 3 pilot phase buildings in June 2015. • The plan is to improve energy efficiency in all State owned buildings (a total of 95 buildings). • The project company provides the full services for implementing energy efficiency measures in buildings incl. • Consultancy (design, procurement, monitoring) • Finance (off balance sheet financing) PAGE 13 16/04/2018 THE FIRST YEAR OF THE DANISH CLIMATE INVESTMENT FUND
CASE: Pampa Elvira Solar SPA, Chile KEY FACTS Project type Thermal solar Country Chile Status In operation Fund participation USD 4.2m Expected total investment USD 25 m • 32 MW solar thermal energy. • Plant of 2,920 flat plate solar collectors each consisting of 10 panels. The collectors are equivalent to 44,000 m2 of panels. • Danish solar company Sunmark A/S and Energia Llaima formed a consortium to establish a thermal-solar plant for the supply of thermal energy (hot water) to the copper mine Gabriela Mistral. • The project is promoted as being at the forefront of enabling the Chilean mining sector to use clean and renewable energy sources. PAGE 14 16/04/2018 NIGERIA ENERGY FORUM
CASE: SolarSouth Investment P/S KEY FACTS Project type Thermal Solar Country Chile, Mexico, and Peru Status Signed Fund participation USD15.4 Expected total investment DKK 0.2bn • SolarSouth will invest in thermal solar plants with private PPA’s in Latin America together with the local partner Energia Llaima, selling heat to especially mines in Chile, Mexico, and Peru. • Energia Llaima is an owner and developer of energy assets, owned by three industrial families in Chile. • The Danish partner is VKR Holding, the owner of Arcon-Sunmark A/S. • Arcon-Sunmark is the supplier of the solar thermal plants. • The present pipeline supports the assumption that the committed equity will enable a portfolio of 8-9 projects within the next 48 months. PAGE 15 16/04/2018 NIGERIA ENERGY FORUM
THANK YOU!! QUESTIONS? PAGE 16 16/04/2018 NIGERIA ENERGY FORUM
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