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Mobilize commercial funding for sustainable energy investments by way of specialized banking instruments
Enhancement of entrepreneurs creditworthiness through an innovative programmatic carbon credit approach
Capacity building, market development and targeted technical assistance
Awareness raising and marketing activities
Scaling up business: development of financing structures that can be replicated
Working with Banks
Chronology 1997 Hungary Energy Efficiency Co - Financing Program (HEECP): partial credit guarantee plus advisory services 2001 HEECP2: IFC contributes $ 12 million from its own funds 2003 Commercializing Energy Efficiency Finance Program (CEEF): Czech Republic, Slovakia, Lithuania, Latvia, Estonia 2005 Russia Sustainable Energy Finance program (RSEFP) credit lines plus extensive advisory program 2006 China Utility based Energy Efficiency program (CHUEE): Risk sharing facility plus advisory program 2007 WB signs first Carbon Credit agreement with Thailand
Creation of a risk sharing facility (RSF) to cover a percentage of loss contingencies.
RSF supports $80m of local bank debt financing for renewable energy investment.
Assuming a prospective 1:1 debt/equity ratio, equates to support for new total project investment of $160m.
Integrated TA to banks to enhance sectoral skills in; credit risk assessment, risk pricing, project design, appropriate technology, selection of bankable projects, and carbon credit documentation.
Prospective generation of $3m/year (for 10 years) of carbon credits produced by renewable energy capacity or EE investments.
Risk Sharing Structure – Guarantee facility to support $80m line of credit 2 nd Loss for 90% of portfolio amount 1 st Loss for 10% of portfolio amount Local Bank 25% WB 75% WB 40% Local CommercialBank 60% In case of guarantee call, repayment from RSF
Outline Program Structure Guarantee Agreement Transaction or Portfolio Guarantees Loan $XXm SE Project Loans Lease Energy Services Agreements Technical Assistance Repayment GUARANTEE FUND (RSF) Held by local FI Interest bearing Carbon Credits Deposit $XXm Re-flows $Xm $Xm $ Thai Govt WB GEF/Donors LOCAL FINANCIAL INSTITUTION End-user ESCO End-user PPs Vendor LOCAL BANK(s)