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Phu Lac Wind Farm. Experience from Binh Thuan Province. Tim-Patrick Meyer, Senior Project Manager Ho Chi Minh City, October 30, 2012. KfW Entwicklungsbank - Overview. Germany’s development bank We finance, advise and accompany development projects and programmes around the world
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Phu Lac Wind Farm Experience from Binh Thuan Province Tim-Patrick Meyer, Senior Project Manager Ho Chi Minh City, October 30, 2012
KfW Entwicklungsbank - Overview • Germany’s development bank • We finance, advise and accompany development projects and programmes around the world • Our aim: reduce poverty, protect the climate, secure peace and shape globalisation in a manner that benefits people in poorer regions of the world • 650 employees, 190 in local offices in partner countries • We carry out 1.900 programmes and projects in 100 countries • Clients: Federal Ministry of Economic Cooperation and Development Other German ministries European Commission Governments of other countries 2
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FC Commitments: Energy & Total KfW 1794 1312 999 533 528 4
Commitments Wind Energy Projects since 2000(without credit lines)
Financing Wind Energy • Professional project preparation required: wind measurements, land acquisition and compensation, feasibility studies, social and environmental studies, licenses … • Analysis of risks: during construction phase, cost-increases, timing-risks, risks during operation, debt-service and interest coverage • Policy matters: clear market rules and regulations needed (strong institutions, PPAs, support mechanisms, etc.) including licensing and approval mechanisms • With larger volumes, financing consortiums become common more complex financing engineering (EU, EIB, EBRD, Regional Development Banks, World Bank, CTF, …)
Wind Farm Phu Lac Wind Farm Phu Lac • First phase: 16 x 1,5 MW = 24 MW (financing through KfW) • Second phase: 17 x 1,5 MW = 25,5 MW • Total investment for phase 1: USD 52 million • KfW loan: approx. USD 43 million equity only about 16 % • 110 kV-line goes right by the wind farm area • Project will sell electricity to EVN at a rate of 7,8 US-c/kWh • It is planned to generate additional income through sale of CER in the scope of the CDM
Wind Data and Energy Yield • Wind data is available for one year from a 60 m tower located about 1 km south of the project site • No documentation of wind measurement (setup, maintenance) available • Wind speed of 6,9 m/s at hub-height (85 m), but high uncertainty of wind data KfW contracted a Wind Resource and Energy Yield Study Net annual energy yield: P50 = 58.652 MWh (CF = 27,9 %) uncertainty 26 % P70 = 50.682 MWh (CF = 24,1 %) P90 = 39.176 MWh (CF = 18,6 %) We did our own financial analyses based on P70
Environmental and Social Impact • An Environmental Impact Assessment Study had been carried out by the Ho Chi Minh City University • Study was missing some important aspects and did not meet international financing standards • Compensation of land-owners? • Potential social impacts? • Documentation of public consultation? • Baseline analysis of birdlife? • Noise analysis? • Etc. KfW contracted a new ESIA Study including public consultation procedure no significant impacts identified
Next Steps • Sign loan agreement with Ministry of Finance who will pass on the loan to the investor • Hire an implementation consultant who will help the investor in carrying out a tender for the wind farm and supervising construction EPC-contract shall include extended guarantee-period of up to five years during which O&M is done by the supplier and O&M-training is carried out • Sign PPA with EVN • Construction in 2014