ICAO “CAPACITY BUILDING SEMINAR ON LOW EMISSIONS A VIA TION MEASURES 24 -26 April 2018 NORMAN MANLEY INTERNA TIONAL AIRPORT (NMIA), KINGSTON, JAMAICA CABEF PRESENTATION
OBJECTIVE Promote energy security and environmental sustainability in the Caribbean Basin CABEF serves as a catalyst for investment and entrepreneurship in clean energy, renewables, and energy efficiency projects
INTENDED IMPACT ENVIRONMENTAL SOCIO-ECONOMIC IMPACT IMPACT Direct and Indirect beneficiaries of the project: 30 - 40 Reduction of greenhouse Energy efficiency and renewable energy projects & companies gas emissions 250 – 300 MW Of clean energy in the Caribbean Basin generating almost An increase in the number 800 GWh/year and offsetting 550k – 600k TCO 2 e of companies utilizing 420,000 clean energy practices Households that will receive power from clean energy generation
RATIONALE Caribbean Basin countries are experiencing high oil volatility and high electricity prices of up to US$0.37/kWh; clean energy only represents 6% of total energy in the Caribbean; energy efficiency projects could represent savings from 0.14 to 0.28 $/kWh In alignment with national In alignment with In alignment with MIF/IDB policies in the region financing gaps strategies Many Caribbean Basin • SME developers lack Consistent with IDB’s energy • • objectives for the region and its countries are changing project finance capital Updated Institutional Strategy their energy policies to • Equity and quasi-equity 2016-2019 regarding inclusive further promote infrastructure is needed to leverage renewable energy bank debt Complement IDB and MIF • interventions to support venture capital as well as renewable energy and energy efficiency
FUNDING AND INSTRUMENTS CABEF US$50 million H-REFF US$50 million INSTRUMENTS • Subordinated debt Co-investment: Co-investment: (convertibles), preferred and US$45 million US$46 million common share investments • Financial or Operating US$100 Leasing for Energy Efficiency million projects; performance-based payments Total Target Capitalization ($63m in commitments) • Revolving debt facilities for ESCO (could be partly converted to equity) • Limited Technical Cooperation funds available MIF: MIF: US$5 million US$4 million 5
INVESTMENT STRATEGY AND INSTRUMENTS Size Of Investments Investment Focus Instruments • Minimum: • Renewable and Clean • Equity and mezzanine energy projects and US$1,000,000 per financing for project companies either grid project implementation connected or off-grid • Maximum: Currently, • Financial and • Energy Efficiency and US$6.3 million per Operating Leasing for other energy savings project (10% of total Energy Efficiency applications (i.e. CCHP) capitalization) projects; performance- based payments • Strong initial pipeline of more than 50 prospective • No senior debt, renewable energy and CABEF intends to energy efficiency projects strengthen projects’ (immediate pipeline of 16 financial structures projects demanding $43.8m of investment)
ELIGIBLE TECHNOLOGIES Biomass Hydropower Biogas LPG/LNG Solar PV, Wind Energy Efficiency / Biogas Solar Thermal CCHP
AN APPROACH TO SMALLER PROJECTS ESCO AS AGGREGATOR ESCO AS CLIENT • • CABEF to sign investment ESCO to present pipeline of agreements with each client projects • • Similar technologies Technical, Managerial, Financial capacity • Same technical and implementation risk • CABEF to invest in ESCO • Similar terms for client • ESCO manages contracts • Streamlined approval and investment with clients
PROJECTS IN THE PIPELINE Dist. Gen. Solar PV Regional ESCO CCHP (hotels, etc.) • Tailored financial lease • Group of 12 rooftop • Revolving debt facility with 10% or less down projects 100-500kW for implementation of payment from client energy efficiency projects • Business/technical • Savings shall cover partnership lease payments • ESCO gets 10-year facility to allow it to roll • Fund comes with • Lease term is pre- it over equity to complete agreed as well as share first projects of savings • Based on solid track record and proven • Solid companies • Banks approached pipeline when projects are built • Turnkey project, • ESCO guarantees reputable EPC or • Fund stays 10-12 15% savings suppliers years
SUMMARY OF INVESTMENT TERMS AND CRITERIA • Clean Energy VC/PF Fund for Caribbean basin Projects must be bankable: • Grid-Connected R.E./Dist. Generation/E. Efficiency • Land rights, permits, • $1m – 6.3m (currently) contracts • Sub. Debt/Pref. Shares/Common Shares/leasing • Solid Fundamentals • Subordinated to Sr. Lenders • Experienced sponsors • Preference for No controlling interest • Social & Environmental • Up to 13 years, investment period Risk Mgt. System • Flexible repayment schedules • IFC Performance Standards • US $ denominated • IDB S&E Guidelines • No pre-investment/project development www.cabef.net
FINANCING RENEWABLE ENERGY PROJECTS AT AIRPORTS • CABEF IS KEEN TO BE A PARTNER IN THE FINANCING OF RENEWABLE ENERGY PROJECTS AT AIRPORTS IN THE REGION • WE HAVE LOOKED AT THE SIGNIFICANT SAVINGS IN ENERGY COSTS ACHIEVED FOLLOWING THE UPGRADING TO CLEAN ENERGY AT THE V.C. BIRD INTERNATIONAL AIRPORT IN ANTIGUA AND THE REGIONAL AIRPORT IN GEORGE, SOUTH AFRICA WHICH IS REGARDED AS THE FIRST “GREEN” AIRPORT ON THE AFRICAN CONTINENT. • WE LOOK FORWARD TO RECEIVING BANKABLE PROPOSALS FROM PROMOTERS TO REPLICATE RENEWABLE ENERGY PROJECTS AT AIRPORTS AS HAS BEEN ACHIEVED IN ANTIGUA AND GEORGE, SOUTH AFRICA. 11
CONTACT INFORMATION +506 2291-2244 +876 633-3921, 633-9315 San Jose, Costa Rica Kingston, Jamaica Fernando Alvarado Rosemarie Morgan fernando.alvarado@seca-ca.com rosemarie.morgan@seca-ca.com www.h-reff.com www.h-reff.com www.cabef.net www.cabef.net 12
THANK YOU! 13
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