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Promoting Renewable Energy and Energy Efficiency Asian Development Bank Initiatives

Promoting Renewable Energy and Energy Efficiency Asian Development Bank Initiatives. Presentation Outline. ADB Overview ADB Introduction ADB’s Strategy 2020 Energy Policy Promoting Energy Efficiency and Renewable Energy ADB’s Support for Clean Energy Programs and Initiatives

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Promoting Renewable Energy and Energy Efficiency Asian Development Bank Initiatives

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  1. Promoting Renewable Energy and Energy Efficiency Asian Development Bank Initiatives

  2. Presentation Outline • ADB Overview • ADB Introduction • ADB’s Strategy 2020 • Energy Policy • Promoting Energy Efficiency and Renewable Energy • ADB’s Support for Clean Energy • Programs and Initiatives • Financing Facilities • Modes of ADB Assistance for Renewables • Operational Overview • Public & Sector Assistance • Private Sector Assistance • Projects

  3. ADB Overview

  4. ADB Introduction The Asian Development Bank (ADB) is a multilateral development finance institution owned by 67 member countries, including 48 from the Asia and Pacific region. ADB’s headquarters is in Manila, Philippines. Vision: An Asia and Pacific region free of poverty. Mission: To help its developing member countries reduce poverty and improve the quality of life of their people. Its main instruments for helping its developing member countries are policy dialogue, loans, equity investments, guarantees, grants, and technical assistance.

  5. Strategy 2020 The Long-Term Strategic Framework of ADB (2008 – 2020) Five Core Operational Areas (identified as core strengths of ADB. Will cover 80% of lending) Infrastructure (including transport and communications, energy, water supply and sanitation and urban development) Environment Regional Cooperation and Integration Finance Sector Development Education Other Areas of Operations Health Agriculture Disaster and Emergency Assistance

  6. Energy Policy (updated 2009) To provide reliable, adequate, and affordable energy for inclusive growth in a socially, economically, and environmentally sustainable way Three Pillars : Promoting energy efficiency and renewable energy Maximizing access to energy for all Promoting energy sector reform, capacity-building & governance

  7. Progress towards ADB's $2 Billion Clean Energy Investment Target Target Achieved • Clean Energy Investment Target: • Increased CE investment target to $2 billion a year by 2013 from $1 billion a year from 2008-2012. Achieved ahead of schedule in 2011.

  8. ADB’s Clean Energy Investments Source: ADB database

  9. ADB Support For Clean Energy

  10. Programs and Initiatives • Carbon Market Program • Supports development of greenhouse gas mitigation projects that are eligible under the Clean Development Mechanism (CDM) of the Kyoto Protocol. • 3 Elements: • Upfront Carbon financing • Technical CDM support through the Technical Support Facility • Marketing support for carbon credits through the Credit Marketing Facility • http://www.adb.org/Documents/brochures/cmp/brochure-cmp.pdf

  11. Programs and Initiatives … • Asia Solar Energy Initiative • Identify and develop large capacity solar projects; and design incentive mechanisms and innovative financing mechanisms for rapid diffusion of solar photovoltaic (PV) technology for distributed power generation. • Targets the development of an additional 3,000 MW of solar power generation by 2013 • http://www.adb.org/documents/reports/solar-energy-initiative/default.asp

  12. Programs and Initiatives … • Quantum Leap in Wind/Small Wind • These programs are intended to aggregate the market for wind to lower the cost of technology and catalyze deployment in the region. • Priority countries are Sri Lanka, Mongolia, • Viet Nam, and the Philippines • http://pid.adb.org/pid/TaView.htm?projNo=44489&seqNo=01&typeCd=2

  13. Programs and Initiatives … • Asia Climate Change and Clean Energy Venture Initiative To provide early equity to start-up Asian companies with readily deployable clean energy technologies to: (i) kick-start the development of nascent eligible technologies; and (ii) helping minimize perceived risk of investing in target technologies among potential co-investors. • ADB invested 20 million/ea in 3 VC funds supporting climatech in PRC and India

  14. Programs and Initiatives … Carbon Capture and Storage (CCS) ADB, in partnership with the Global CCS Institute of Australia is developing demonstration projects. Produce a comprehensive road map for CCS demonstration projects, as well as policies, legal and regulatory frameworks to overcome barriers to broad commercial scale deployment of CCS in the region

  15. Programs and Initiatives … • Additional Information • Web link: • http://beta.adb.org/themes/climate-change/programs-and-initiatives

  16. Financing Facilities • Clean Energy Financing Partnership Facility • ADB managed facility pooling donor funds. • Finances the deployment of new, more efficient and less polluting supply and end-use technologies. • Also finances policy, regulatory, and institutional reforms that encourage clean energy development. • http://beta.adb.org/site/funds/financing-partnership-facilities/clean-energy-financing-partnership-facility • Climate Change Fund • Multi-donor trust fund to promote scaled-up financing for demonstration, deployment and transfer of low-carbon technologies in targeted countries. • Channeled through multilateral development banks. • http://www.climateinvestmentfunds.org/cif/ • Clean Technology Fund • Multi-donor trust fund. • The CTF finances programs in 12 countries.  • http://www.climateinvestmentfunds.org/cif/node/2

  17. Financing Facilities … • Asia Pacific Carbon Fund ($151.8 m)– 2007 onwards • ADB managed fund purchasing pre-2013 certified emissions reductions (CERs) • Almost fully allocated. 62 projects across 6 countries; India (34), PRC (21), Thailand (4), Indonesia (1), Fiji (1), Vietnam (1). • http://adb-apcf.org/ • Future Carbon Fund ($115 m) – 2009 onwards • ADB managed follow-on fund to the APCF (above) purchasing post-2012 CERs. • 25 projects to-date. • http://beta.adb.org/site/funds/multi-partner-trust-funds/future-carbon-fund-fcf

  18. Financing Facilities … Future Carbon Fund Key Features • Future Carbon Fund (FCF) established to pre-purchase post-2012 carbon credits from projects supported by ADB financing and the Carbon Market Program (CMP) • FCF is an integrated component of the CMP along with the Asia Pacific Carbon Fund (APCF), Technical Support Facility (TSF) and Credit Marketing Facility (CMF) • FCF was approved by ADB’s Board of Directors in July 2008 and commenced operations on 30 January 2009 • FCF’s provides upfront payment for post-2012 credits to be generated by projects proposed today to help developing countries reduce the upfront capital constraint of installing clean energy systems. • It is also proposed to project developers in conjunction with ADB financial support as well as technical support from TSF.

  19. Financing Facilities … Future Carbon Fund Provides Upfront Finance

  20. Financing Facilities … Future Carbon Fund Benefits for Projects • Certain funds today, for commodity with uncertain value in the future • Reduced budget commitments to close the financing plan of projects • Comprehensive technical and implementation support • Extra credits from successful project implementation can be marketed with ADB support for further financial upside For inquiries please contact: Future Carbon Fund Regional and Sustainable Development Department Asian Development Bank Tel: (+632) 632-4444 local 70204 E-mail: futurecarbonfund@adb.org

  21. Financing Facilities … FCF Priority Target Projects Renewable Energy • Biomass/Biogas energy • Wind power • Solar power • Geothermal power • Run-of-river hydropower • Waste to energy Energy Efficiency • Industrial technology • Buildings and equipment Transport • Public transport • Vehicle efficiency

  22. Financing Facilities … Country Distribution of FCF Projects(as of 10 February 2012) The current portfolio and pipeline consists of 79 projects across Asia Pacific, 29 of which are on the priority list. The portfolio includes 14 signed CERPAs as of 10 February 2012.

  23. Financing Facilities … Project Type Distribution of FCF Projects(as of 10 February 2012)

  24. Modes of ADB Assistance for Renewables

  25. Public sector assistance • 2011: $12.8 b loans, $1.1 b grants, $267 mtechnical assistance • $2.133 b for clean energy • (Met target of $2 b (public & private) annual investment in clean energy by 2013. Achieved $1.26 b in 2009, $1.56 b in 2010 Modes of Assistance • Private sector finance • 2011: $1.125 b loans, $100 m B-loans, $89 m equity, $417 m guarantees • 7 out of 16 transactions (44%) were for renewable energy and/or energy efficiency • Clean Energy Financing Partnership Facility ($102 m) • Asia Pacific Carbon Fund ($151 m), Future Carbon Fund ($115 m) • Technical Support Facility • Other initiatives: Clean Energy Program, Energy for All, Asia Solar Energy Initiative, Quantum Leap in Wind • Catalytic tools for clean energy • Policy and knowledge management • Policy dialogues with governments • Research, training, conferences, publications, capacity building financed through technical assistance

  26. ADB Operations Overview • Public Sector Assistance: • Central and West Asia Department • East Asia Department • Pacific Department • South Asia Department • Southeast Asia Department • Private Sector Assistance: • Private Sector Operations Department

  27. ADB Operations Overview … Process for Public Sector Assistance: ADB strategy closely coordinated with host country government Each country strategy unique to that particular country’s needs and priorities Govt. Sector Strategies & Priorities ADB Strengths, Strategies & Priorities Rolling Loan & Technical Assistance Pipeline Project / Technical Assistance Approval & Implementation Country Programming

  28. ADB Operations Overview … Process for Private Sector Assistance: Web links: http://beta.adb.org/site/private-sector-financing/applying-assistance http://beta.adb.org/site/private-sector-financing/contacts Required Information: • Project Operations • The Market • Environmental and Social Aspects • Cost Estimates & Financing Plan • Financial Model • Risk Analysis • Permits and Licenses • Executing Summary • Project Description • Feasibility Study • Technical, Financial, Economic, etc. • Background on Sponsor(s) • Project Ownership Structure • Project Implementation Arrangements

  29. Example Projects: Public Sector

  30. Support for EE and RE in India • Energy Efficiency in delivery • Transmission and distribution strengthening • Technical loss reduction • Feeder separation (agriculture & other) • Metering, auditing and monitoring • Covers projects in Madhya Pradesh, Assam, Bihar

  31. Support for EE and RE in India… • Large scale RE indirect support (transmission) • Gujarat Solar Power Transmission Project (2011) • $100 million loan funding backbone transmission system for 500 MW solar park development in Gujarat • http://pid.adb.org/pid/LoanView.htm?projNo=44431&seqNo=01&typeCd=3 • Proposed Rajasthan Renewable Energy Transmission Program (2012-2013) • Transmission system build-out to support anticipated solar generating capacity expansion

  32. Support for EE and RE in India… Proposed Maharashtra Solar Park and Green Grid Development Investment Program (2012-2013) • Backbone transmission system for solar parks • Partial funding for solar PV • Additional PPP arrangement for solar PV Proposed Utility Scale Concentrated Solar Power Demonstration Project (2012-2013) • Up to 50 MW project

  33. Support for EE and RE in India … • Run-of-River Hydropower in Himachal Pradesh totaling 856 MW (2008 – 2016) http://pid.adb.org/pid/LoanView.htm?projNo=41627&seqNo=02&typeCd=3 • Transmission system capacity build-out program to accommodate increased hydropower development in Himachal Pradesh (2011-2014) http://pid.adb.org/pid/TaView.htm?projNo=43464&seqNo=01&typeCd=2

  34. Support for EE & RE in Nepal Energy Access and Efficiency Improvement Project (2009) • Transmission strengthening for hydropower evacuation • Distribution loss reduction (model networks) - $ 13 million • Solar PV roof-tops – $ 3.0 million • Hospitals, Government buildings, NEA, Airport • Energy Efficient lighting - $ 1.5 million • 1 million CFLs • Rehabilitation of small hydropower plants - $ 3.5 million

  35. Support for EE and RE in Nepal… In addition to T&D investment, funded renewable energy for street lighting – $1.5 million • Additional funding for rehabilitation of 2 small hydropower projects (69 MW and 15 MW respectively) • http://pid.adb.org/pid/LoanView.htm?projNo=40553&seqNo=01&typeCd=3 • 1,000 solar and solar wind municipal street lights • Particularly useful in Nepal due to an overburdened power grid

  36. Support for EE & RE in Nepal … Proposed 2012 project Scaling-up of renewable energy programs - $ 20 million • $20 million from the Climate Investment Funds (SREP) , plus co-financing and private sector contributions to a total project cost range of $80-100 million. • Will include: • grid-connected small hydropower, • off-grid mini/micro hydropower, and • solar PV.

  37. Support for EE and RE in Bangladesh … Power System Efficiency Improvement Project (2011) • Increased household access to natural gas • $ 40 million • Replacement of aging plants at Ashuganj with 450MW CCPP - $ 411 million • 5MW Grid connected Solar PV demonstration – $ 30 million • Solar PV-Wind hybrid - $ 16 million • Solar PV-LED Street-lighting - $ 38 million http://pid.adb.org/pid/LoanView.htm?projNo=37113&seqNo=01&typeCd=3

  38. Support for EE and RE in Sri Lanka Clean Energy Access Improvement Project (2009) • Strengthening grid for RE evacuation • Credit line for estate micro-hydro rehabilitation - $ 1.3 million • Medium scale hydropower – 30MW • Detailed engineering design - $ 6 million • Reactive power management • Strengthening regional lighting laboratory and appliance labeling - $ 0.6 million (via Technical Assistance) http://pid.adb.org/pid/LoanView.htm?projNo=39419&seqNo=01&typeCd=3

  39. Support for EE and RE in Sri Lanka… Proposed Clean Energy & Network Efficiency Improvement Project (2012) • Infrastructure facilities for • wind power evacuation (wind park) • Solar power evacuation (solar park) • Solar PV rooftop pilot Capacity building (via Technical Assistance) • Regulation for EE and RE • RE resource assessment

  40. Country Partnership Strategy (2011–2015)Energy Sector Priorities Support for EE and RE in China Scaled up energy efficiency Demonstrate new and immature renewables Urban environment improvement Cleaner coal and gas Intensify sector reforms • Contribute to energy intensity reduction in selected industries and provinces • Support early demonstration and deployment of new but relevant renewable technologies • Low carbon and low emission heat and power supplies to urban areas • CCS pilot and demonstration and natural gas-based CCS ready plant development • Develop technology road maps, trial market-based instruments, policy advice

  41. Support for EE and RE in China Tianjin Integrated Gasification Combined Cycle Power Plan Project (2010) • A 250 MW IGCC demonstration plant constructed at Tianjin. • ADB loan funds civil works for some auxiliary facilities such as cooling water intakes etc. • ADB also intends to demonstrate the capture and storage of CO2 • http://pid.adb.org/pid/LoanView.htm?projNo=42117&seqNo=01&typeCd=3

  42. Support for EE and RE in China Integrated Renewable Biomass Energy Development Sector Project (2010) (i) support 118 livestock farms and agro-enterprises in constructing medium- and large-scale biogas plants (ii) Support the above owners and about 41,000 households in using the biogas for electricity, heating, and cooking; (iii) Support up to 25 biogas plants to connect to local power grids to maximize the benefits of biogas electricity. http://www.adb.org/projects/project.asp?id=40682

  43. Support for EE and RE in China • Technical Assistance • Gansu Rural Clean Energy Development Project • Outcome: Enhanced capacity in planning and management of clean energy development • Outputs: • mapping of clean energy sources and a renewable energy development plan • identification and prefeasibility studies for priority clean energy investments (biomass and wind) • identification, preparation and implementation of pilot biomass project • capacity assessment and strengthening of provincial and local agencies in clean energy planning and management • Awareness promotion of clean energy and energy conservation in rural areas. • http://www.adb.org/projects/project.asp?id=40635

  44. Support for EE and RE in China… • Technical Assistance • Concentrated Solar Thermal Power Development • Outcome: Enhanced capacity in planning and management of clean energy development • Outputs: • development of a road map for CST power demonstration and deployment in Gansu • implementation of a pilot CST plant • identification of a priority demonstration project and prefeasibility assessment • capacity assessment and strengthening of CST power demonstration • Knowledge dissemination on CST power development. • http://www.adb.org/projects/project.asp?id=43356

  45. Support for EE and RE in China… • Technical Assistance • Renewable Energy Development in Qinghai • Outcome: Enhanced capacity in planning, design, construction and O&M of grid-connected PV development in Qinghai province • Outputs: • (i) Seminars to introduce grid-connected solar PV systems • (ii) Strengthen capacity in planning, design, construction and operation of solar PV systems • (iii) improving the design of a pilot 10 MW system including technical and financial feasibility studies. • (iv) Knowledge dissemination on large-scale grid-connected solar PV development. • Smart-Grid for Renewable Energy • http://www.adb.org/Projects/project.asp?id=44016

  46. On Going ADB Energy Sector Loan Projects Support for EE and RE in China… • Loan 2260 - PRC & Loan 2658 – PRC : Inner Mongolia Urban Environment Improvement Project ( Phase I & II) • Loan 2616-PRC: Tianjin Integrated Gasification Combined Cycle Power Plant Project • Loan 2658-PRC: Inner Mongolia Autonomous Region Environment Improvement Project (Phase II) • Loan 2771-PRC: Shandong Energy Efficiency and Emission Reduction Project • Loan 2611-PRC & Loan 2773 - PRC : Guangdong Energy Efficiency and Environment Improvement Project ( Tranch 2 &3) • Loan 2835-PRC: Hebei Energy Efficiency Improvement and Emission Reduction

  47. Example Projects: Private Sector

  48. THAILAND: NED Solar • IPP thin-film PV solar project in Thailand: 73MW • Thailand’s first utility-scale solar power plant • Power sales under 5-year automatically renewable PPA with utility EGAT (with tariff adder) • Project cost: $250 million • ADB’s role: • $63 million project loan (in local currency) • $2 million grant to cover technology risks • Potential marketing of carbon credits • Key features: • Well-developed PPA regime underpins private sector participation in power sector • Renewables incentives encouraged investment in new technology space • Long-term (18 yr) financing (beyond 10-year tariff subsidy period) improved • financial viability

  49. INDIA: Solar Power Generation Guarantee Facility • Provide partial credit guarantees to local and foreign commercial banks that finance private sector solar power plants in India • ADB’s assistance will help solar projects close affordable long-term financing necessary for solar power project’s viability, and demonstrate the utility-scale, grid-connected solar photovoltaic technology’s commercial viability in India • Project cost: $150 million • ADB’s role: • $150 million guarantee facility (15yr tenor) • Key features: • Support multiple “small” solar power projects (up to a maximum size of 25 MW) • ADB will provide technical engineering support to partner banks to complete technical due diligence on the projects to be covered by guarantees (TA of $1.3 million) (Under construction) • http://beta.adb.org/site/private-sector-financing/india-solar-generation-guarantee-facility

  50. INDIA: Dahanu Solar Power Project • 40 MW solar photovoltaic (PV) power plant being developed by Reliance Power • Thin film solar modules supplied by First Solar • Tapping India’s vast solar resource potential • Optimal utilization of barren ,vacant land in Jaisalmer district, Rajasthan (India) • 25yr PPA with R-Infra • Project cost: $147.5 million • Co-financing with USExim • ADB’s role: • $48 million project loan (17.5yr tenor) • Key features: • India’s first utility-scale solar PV power plant • Unique off-take arrangements (private -to-private)

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