Renewable Energy Project Financing North American Development Bank (NADB) Esaúl Ramírez Analysis and Structuring Officer October 19, 2012
Background NADB Structure 1. The NADB was established in 1994 NADB is capitalized and governed equally under the auspices of the North by the governments of both the United American Free Trade Agreement States and Mexico. (NAFTA) between the United States and Mexico. USA MEXICO 2. One of NADB’s objectives is to 50% 50% facilitate financing for environmental projects along the North American Development Bank US-MEX border region. NADB has a Aaa/ AA+ credit rating 3. NADB also promotes sustainable development among the communities throughout the region.
NADB Board of Directors • Secretary of the Treasury • Secretary of State • Administrator, Environmental Protection Agency • U.S. Border State Representative • U.S. Border Public Representative U.S.A. • Secretary of Finance and Public Credit • Secretary of Foreign Affairs • Secretary of the Environment and Natural Resources • Mexican Border State Representative • Mexican Border Public Representative Mexico
Programs & Eligible Sectors NADB PROGRAMS Loan Technical Assistance• Competitive fixed or floating rates • Support project development with regards to Support project development with regards the closing of financing, project design, related to the closing of financing, project design,• Focuses on the financial viability of projects development studies, and project bidding related development studies, and project (credit risk analysis, source of repayment, collateral and guarantee structure) bidding Eligible Sectors Residential, industrial and Renewable Energy Efficiency Water and Sewage Air Quality hazardous waste Energy Potable water Landfills Street paving Wind Public lighting treatment plants Recycling Pavement Solar Equipment Sewage and Equipment rehabilitation Hydroelectric replacement wastewater Toxic waste Road bypasses Geothermal Water treatment disposal Urban mass transit efficiency Bio-fuels Water conservation systems programs Biomass Storm drainage Border crossings Methane capture
Renewable Energy Potential in the US-Mexico Border Region● A region with world class renewable energy resources Source: National Renewable Energy Laboratory
Renewable Energy FinancingNADB’s advantages for financing renewable energy projects include:●Loan terms of up to 25 years: Usually 2 - 3 years shorter than the term of the PPA●Competitive financing: Attractive fees/commissions and competitive rates●Fixed and variable rates; both in USD and MXN●NADB’s extensive experience in the RE sector allows the Bank to provide guidancethroughout the project in subjects related to legal, financial, technical, etc.●NADB works together with some of the most experienced companies in the sector,including: Garrad Hassan BEW Engineering Chadbourne and Parke Navigant Black & Veatch Large and small sponsors (i.e. utilities)
Renewable Energy Financing (cont’d)● NADB’s maximum loan amount is the lesser of the following: 85% of the total project cost $110M for private sector projects and USD$180M for public sector projects.● NADB sizes and amortizes debt based on the project’s expected cash flows. Solar: DSCR of 1.30x at the P50 production level or 1.0x at the P99 Wind: DSCR of 1.40x at the P50 production level or 1.0x at the P99● Key drivers of bankable renewable energy projects include: Strong sponsor/developer Long-term PPA with a strong off-taker Secured interconnection/transmission Proven technology Secured land rights (leased or owned) Independently validated renewable energy resource
Recent Renewable Energy Financings● NADB has financed nearly 400 MW of renewable energy projects since 2011. 4 solar projects, 2 wind projects 5 projects in the U.S., one in Mexico Solar Project Solar Project Wind Project Wind Project 23MW 5 MW 265 MW 54 MW CETSA Loan: USD 77.4 M Loan: USD 13.1 M Loan: USD 110 M Loan: USD 51 M Niland, California • 2011 Tucson, Arizona • 2012 Ocotillo, California • 2012 Reynosa, Tamps. • 2012● NADB is currently working on a pipeline of over 500 MW, expected to close within the next year.● NADB has experience in project financing both as the sole lender or as part of a club with other Banks.
Recent Renewable Energy Financings (cont’d) SunPeak 23 MW Project Summary: •Commercial operation date • Off-taker: Imperial Irrigation District Aug 1st, 2012 • 30 year PPA •60 km North from the Mexican border • Over 20 thousand metric tons of •USD$77M loan CO2/ year will be displaced •+99 thousand polycrystalline panels Niland, California
Recent Renewable Energy Financings (cont’d) Astronergy 5 MW Project Summary: •Loan USD$13M •40 acres •PPA 20 years •Off-taker: Tucson Electric Power •Amorphous silicon (thin film) solar panels •Over 7 thousand metric tons of CO2/ year will be displaced •Commenced operations May 11th, 2012 Tucson, Arizona
Recent Renewable Energy Financings (cont’d) Ocotillo 265 MW Project Summary: •Loan USD$110M •PPA 20 years •Off-taker: San Diego Gas and Electric •Siemens Turbines •End of construction December 2012. •Over 175 thousand metric tons of CO2/ year will be displaced on its first operational year. Ocotillo, California
Recent Renewable Energy Financings (cont’d) El Porvenir 54 MW Project Summary: •Loan USD$51M •PPA 15 years •Off-taker: Soriana •Vestas Turbines •Over 90 thousand metric tons of CO2/ year will be displaced on its first operational year. •Construction to begin December 2012.Reynosa, Tamaulipas
Contact Esaúl Ramírez Analysis and Structuring Officer ERamirez@nadb.org North American Development Bank 203 South Saint Mary’s Street San Antonio, Texas 78209 Tel: (+1) 210-231-8000 Fax: (+1)210-231-6232 www.nadb.org