Thorsten Schneider Project Manager Energy & Climate Protection KfW Office Jakarta

1. National and International Opportunities in Financing of Renewable Energy Investments - The Perspective of a Development Finance Institution - Thorsten Schneider Project Manager Energy & Climate Protection KfW Office Jakarta Bali, 17 October 2011

2. Agenda KfW at a Glance RE-Financing – Perspective of a Development Bank

3. 60 Years of KfWFinancing with a Public Mission • Promotional bank of the Federal Republic of Germany • Founded in 1948 • Shareholders: 80% Federal Republic,20% federal states • Headquarters: Frankfurt am Main • Representative offices: about 70 offices worldwide • Balance sheet total at end-2010: EUR 441,8 billion • 4,530 employees (2010) • Rating: AAA/Aaa/AAA 3 3

4. Our ReputationA Strong Environmental and Climate Protection Bank In 2010 commitments forenvironment and climate protection: • EUR 25,3 billion • energy efficiency: EUR 11.5 bn • renewable energies: EUR 11.3 bn • KfW is the Number One Environmental Bank in Germany and one of the world’s leading financing institutions for EE and RE.

5. Environmental and Climate Portfolio New Commitments of KfW Entwicklungsbank 2010 …Sectors million € Mitigation 2,000 58 % 220 Adaptation …Regions 380 Environment 1,850 Others

6. Energy Forests/Agriculture Others Environmental Protection and Climate Change Mitigation Expected CO2 savings from new commitments 2010 …Sectors t/year 10.3 million …Regions

7. Commitments in the Energy Sector 2010

8. KfW Entwicklungsbank in IndonesiaPrioritiy Area: Climate Protection 3 PRIORITIES Forests and Climate Change Emission Reduction in Cities Promotion of Geothermal Energy and Other Renewables CDM – Financing KfW Carbon Fund + REDD+ Demonstration Activities Solid Waste Management Seulawah Agam Geothermal Power Plant Environment and climate friendly mobility projects Debt Swap IIIb Emission Reduction Investment Kotamobagu Geothermal Power Plant Debt Swap VI Sustainable Hydropower Debt Swap IIIa International Climate Initiative 1000 Islands Renewable Energy for Electrification Emission Reduction, Forest Protection, SME Credit Support, Improved Living Conditions, Improved Capacity

9. Climate ProtectionGeothermal Energy • Activity: Exploration and exploitation of geothermal resources • Financing Volume: over € 210 m • Impact: • Exploration of Geothermal Resources at Seulawah Agam Geothermal Site: • Promotion of private sector involvement • Geological risk mitigation • Implementation of Seulawah Agam (40MW) and Kotamobagu (80MW) Geothermal Power Plants • Emission reduction 19m tCO2 • Energy supply to 480,000 households and 150,000 other consumers Partner: PT. PLN PT. Pertamina Geothermal Government of Aceh

10. Agenda KfW at a Glance RE-Financing – Perspective of a Development Bank

11. Facing Global Challenges in the Energy SectorMassive Investments are required Stakeholders Investments Challenges • State • Private and public investors • Banking / financial Sector • Development Finance Institutions • Carbon market • Worldwide massive • investments • required in: • EE supply side • EE demand side • Renewable • Energies Access to Energy Energy Security Global Climate Protection

12. Renewable Energy InvestmentsDynamic Developments in recent years Source: UNEP

13. Barriers for Investment in Renewable EnergiesMany Challenges needs to tackled Scale effects Imperfect financial markets New and unproven technologies Barriers for RE-Investments Regulatory risks Investment conditions in developing / transition countries

14. Regulation or Promotion ? Market failure ? YES YES Regulation (correcting market failure) Regulation possible/efficient Instruments NO Development Finance Institutions financing new RE-technologies • Emission taxes • Tradeable ermits • Standards • … Development Finance Institutions Development Finance Institutions: • National Promotional Banks • Bilateral Development Banks • Multilateral- / Regional Development Banks

15. Instruments of Development Finance Institutions A Comprehensive Menu for RE Financing Grants • Project development • R&D support • Investment grants Loans • Concessional loans • Credit lines • Guarantees Instruments of Development Finance Institutions Mezzanine • Risk sharing… • Structured Products Equity • Public & private equity • Venture capital Carbon Markets • Carbon finance • Innovative products Funds • Structured funds with public & private investors

16. Key factors for Renewable Energy • What is important to Renewable Energy Investments? • Create a level-playing field for RE. • Use of the Best-Available-Technology. • Reduce the energy intensity. • Promote private sector involvement.

17. Questions? Thorsten Schneider Menara BCA, 46th floor Fon +62-21-2358 7431 Project Manager Jalan M. H. Thamrin No. 1 Fax +62-21-2358 7440 KfW Office Jakarta Jakarta 10310 Thorsten.Schneider@kfw.de

18. RE New Capacities in 2009Strong focus on proven RE Technologies Source: UNEP

19. Concentrated Solar Power (CSP) in India A long way to the first CSP investment in India • Increasing demand for energy due to economic development and population growth • Barriers to the exploitation of solar energy • Higher investment costs • Lack of financial resources and know-how • Installation of the first CSP plant in Asia • Additional revenue via CDM certification • Transfer of knowledge from implementation of CSP technology in Spain and USA (IPEX) • Supply of clean energy for 50,000 people • CO2 savings of more than 25,000 tons p.a. • First experiences with this innovative technology Problem Approach Effects