Axel Ceglie-Swoboda introducing solar energy finance options for Egypt - presentation held at Heliopolis University for Sustainable Development

1. financing of agriculture pumps
Energy Solutions
1) Introduction
2) financing of agriculture pumps
3) General
4) “Cloud financing”
5) summary
Sekem energy Solar thermal workshop Cairo 130611
Financing of solar projects

2. eg.eurem.net
Solar Thermal Systems: Heating (I)
Solar Energy in History
2000 B.C. Drying of Food in Ancient Egypt
Depicted for the First Time

3. financing options
sekem energy workshop
General options for financing:
1) EPC
2) BOT
3) Loans
4) Mezzanine
5) Incentives, national / internat.
6) Egypsol incentive
7) Private shares .

4. importance of interest rate
Equity 20 %
Loan 80 %
Interest rate 10 %
ROI 10 years
Equity 20 %
Loan 80 %
Interest rate 5%
ROI 5 years
Equity
100 %
ROI 2 y.
clients need ROI in 3-5 years !
High interest rate is obstacle for solar projects

5. pump BOT model with bank
1) Agriculture pumps from SAER (Italy)
1) 50 to 500 KW
2) Electric grid connected or via diesel generator.
3) 18 hours operation, mainly during night.
4) Maintenance contract.
5) Solar driven pumps in preparation.
2) Financing “engineering”
1) 15 % equity from the farmer or “in kind” (return the old pump)
2) 85 % loan from Egypt agriculture bank
3) 5 years repayment from the farmer to bank or even with crops.
Remark: condition is that the supplier has bankable history
Experience: If the farmer cant pay 15 % equity, he cant pay the rates too !!

6. structure of the pump financing
supplier
Agriculture
bank
Farmer
Repayment
maintenance
contr. Payback
with crops

7. international financing
suitable for groop of projects or clients with same technology
Classical
investor
Gov.
Securities
for
technology
export
Commerce
bank e.g.
Austria
National
bank
Mezzanine
capital
Project
equity

8. BOT model
Client pays energy not the investment for certain time
supplier
Energy
solution,
Container
etc…
National
bank
Client,
Pays for energy
not for the
investment
energy

9. “cloud” financing
Success story from Europe:
- Private people buy shares in terms of pieces of wind farms,
solar plants (Vienna energy utility).
- 1 share can be 1 collector or solar panel in PV !
- U.S.A.: Founder of Pay pal and investor of Tesla (electric cars)
1 bil. USD from stock market for 65.000 PV plants 2012.
- Limited companies, stock companies, bonds.
Transfer to Egypt:
Hotels, industries could cooperate to get advantage in
economies of scale.
Very big problem: Mentality of sharing isn’t developed yet

10. other examples
Battery storage system Germany:
Since May 2013, 30 % governmental incentive, KfW Loan
FIT… feed in tarif,
grid parity (ships on Nile pay up to 1,5 LE/KWh! Diesel 5,3 LE/l)
U.S.A.: TER system (2010: 0,35 USD/KWh over 500 KWh/m,
and reduction of tax).
Carbon credits from certain size of projects.

11. Summary
1) Good timing for Egypt (energy crisis)
2) Technology is ready and getting cheaper
3) Financial tools are available
4) There are bottlenecks in projects
5) Market will develop fast. Having
dynamic partners is success factor
6) New thinking is needed
7) Maintenance and services are important
And don’t forget about quality of technology !

12. Stone age didn’t end because of
a lack of stones
Fossil energy age will not end
because of a lack of resources
Always better technologies are
the driving force for change and
new opportunities