1 / 9

Financing PV/Solar Energy Projects in Indonesia

Paul Heinemann – Director DEG Office Jakarta Thorsten Schneider – Senior Project Manager KfW Office Jakarta May 2014. Financing PV/Solar Energy Projects in Indonesia. KfW Group - A promotional bank with a wide array of functions. Domestic Promotion. International Financing.

wright
Download Presentation

Financing PV/Solar Energy Projects in Indonesia

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Paul Heinemann – Director DEG Office Jakarta Thorsten Schneider – Senior Project Manager KfW Office Jakarta May 2014 Financing PV/Solar Energy Projectsin Indonesia

  2. KfW Group - A promotional bank with a wide array of functions Domestic Promotion International Financing We promote Germany We ensure internationalisation We promote development Promotion SMEs, business founders, start-ups Promotion construction of new housing and modernisation as well as education Financing municipal infrastructure projects and global loans Germany agency business for Federal Government International project and export finance worldwide Public & Private Sector Developing and emerging-market countries Financial Cooperation (Gov. to Gov.) Public Sector Developing and emerging-market countries Private Sector Promotion Business area Privatkundenbank Business area Kommunalbank Business area Mittelstandsbank KfW IPEX-Bank KfW Entwicklungsbank DEG Promotion of environmental and climate protection 2

  3. DEG - Activities in Renewable Energy • 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 Renewable financing since to date: • USD 750 million in total • more than 40 projects globally 3

  4. DEG criteria for financing renewable energy/grid-connected solar/PV (private sector) Financing Equity ratio of appr. 30% with adequate cash-flow oriented structure Promoter/Sponsor Sector experienced, being at risk Corporate governance, transparency Construction Implementation complexity relatively low, but EPC contract with completion and performance guarantees preferred Arrangements to cover cost-overrun risks Operation 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 impacts Energy Resource Power generation estimation (solar radiation, planned losses etc.) to be confirmed by independent technical engineer same as adequacy of equipment Permits/Licenses All required permits, rights, licenses etc. in place including land 4

  5. 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 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)? 5

  6. KfW Development Bank - Financing Structures for the public sectorTailor-made implementation structures for different investment volumes Government Government Utility Financial Intermediary PLN (usually)big investments (usually)big investments (usually) many small investments

  7. 1,000 Islands RE for Electrification Program, IndonesiaIncrease 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.

  8. Search KfW Tenders on Germany Trade and Investhttp://www.gtai.de/GTAI/Navigation/EN/Trade/search-kfw-tenders.html

  9. Jochen SalethDirectorKfW Office Jakarta Jochen.Saleth@KfW.de Contact Address:Menara BCA, 46th floorJalan M. H. Thamrin No. 1Jakarta 10310IndonesiaPhone: +62 21 23 58 74 31/41 Fax: +62 21 23 58 74 40 Paul HeinemannDirectorDEG Office Jakarta Paul.Heinemann@deginvest.de Thorsten SchneiderSenior Project Manager KfW (Energy)Thorsten.Schneider@KfW.de

More Related