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- 1. B E R K A N A Private Equity Fund Creating innovative financing for clean energy solutions in LAC
- 2. What is Berkana? • Pla0orm for inves5ng in LAC clean energy sector • We are La5n American professionals with deep commercial rela5ons in the local markets and interna5onal inves5ng experience • Investment focus: Distributed genera5on (DG) solu5ons, small and medium- sized projects (< 10 MW), invest in growth of local energy companies • Raising a $100 M blended fund (65% debt:35% Equity) for clean energy projects and companies (solar,wind,co-genera5on); average investment $10 M • In parallel, structuring a $10 M facility for Colombian solar solu5ons BERKANAPE.COM
- 3. Global Drivers for Clean Energy • Global warming, the ensuing efforts by the interna5onal community, and the UN Paris and Marrakesh mee5ngs are driving the world’s ini5al pledges to reduce CO2 emissions • Significant decrease in clean energy technology costs (e.g. -67% in solar;-30% in wind over 5 years)1 • DG disrupts tradi5onal model of u5lity-scale genera5on; residen5al, industrial and commercial en55es are now able to generate their own electricity © OECD/IEA 2015 Climate pledges decouple power sector emissions from electricity demand World electricity generation The share of low-carbon power generation grows to almost 45% in 2030 so that power emissions remain flat, while electricity demand grows by more than 40% 10 20 30 40 Generation(thousandTWh) and related CO2 emissions 1990 2000 2010 2020 2030 Emissions(Gt) 5 10 15 20 CO2 emissions Electricity generation Electricity generation CO2 emissions Source: Interna-onal Energy Agency, 2016 1. Interna-onal Energy Agency (iea), 2016 BERKANAPE.COM
- 4. New York, June 23rd, 2016, Francesco Starace, ENEL CEO and General Manager at the Opening Session of UN Global Compact Leaders Summit 2016 “ … The world is rapidly changing and facing a number of immense challenges: there are enormous disparities of opportunity and wealth among people, while the planet is threatened by environmental degradation and climate change. The energy sector, which is at the heart of the UN agenda, is also undergoing a significant shift to a new paradigm dominated by renewables and distributed generation (DG), and this change will continue regardless of what individual companies choose to do. This is why we have decided to swim with the tide instead of against it: we have changed to embrace the future, because it is only by being open to the change that this will turn into many exciting opportunities…” BERKANAPE.COM
- 5. World’s Non-Hydroelectric Renewables Genera5on Source: adapted from US Energy Informa-on Administra-on (EIA), November 2016 Note: (CAGR) es-mated from 2010 -l 2014 Africa (16.9%) Asia & Oceania (17.3%) Central & South America (11.3%) Eurasia (12.5%) Europe (11.2%) Middle East (39.8%) North America (11.1%) 0 100 200 300 400 500 600 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Billion KWh • Africa, Eurasia and Middle East have the smallest amount of RE; however, high growth rates • LAC is growing at average rates BERKANAPE.COM
- 7. Renewables Inves5ng by LAC Country WABLE ENERGY MARKET ANALYSIS: LATIN AMERICA 04 USD 0.5 billion for the second consecutive year two-thirds of total renewable energy investment USD billion BrazilMexicoPeru Uruguay ChileHonduras 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 4.6 6.8 12.7 15.0 10.4 13.1 13.1 12.4 10.4 15.0 16.4 100% 80% 60% 40% 20% 0% Others Figure 4.1 Investment in renewable energy by country in Latin America, 2005-2015 Source: BNEF, 2016 Source: IRENA, 2016 Brazil is by far the largest investor in RE Mexico, Chile and Uruguay have also made some RE investments The rest of LAC countries have done very little investments in RE BERKANAPE.COM
- 8. Challenges for Clean Energy in LAC • Lack of know how about clean energy technologies (by banks, regulators, suppliers and clients) • Lack of financial products tailored to clean energy projects - Project finance, specially for small projects - Energy contracts - Some public funding available, but need to apract private financing • Fragmented supply chain - Liple support for early development stage of projects - Local engineering companies small and undercapitalized BERKANAPE.COM
- 10. What is Berkana’s Strategy? • Berkana’s flexible solu5ons can address financing gaps, specially for: - Small projects (< 10 MW) by aggrega5ng investments in por0olios that apract ins5tu5onal funding - Inves5ng in the growth of local engineering firms to become leaders - Create customized solu5ons (e.g. solar for off-grid remote areas) • Op5mize funding by blending debt + equity - Generate current income to offset financing cost - Clients make a down payment in the projects - Where available, channel concessional funding to local projects • Diversifying investors’ base - Educa5ng first 5me local pension funds to invest in clean energy - Working with global funds, IFIs, bilaterals and other capital sources BERKANAPE.COM
- 11. Conclusions of Renewables in LAC • Huge poten5al, but remains untapped • Clean energy and DG offer solu5ons for SME and commerce • Clean energy requires: 1) affordable financing, 2) capable developers, 3) smart regulators, 4) technology transfer, 5) governments’ commitment • Berkana is: - Aggrega5ng small projects into por0olios that are aprac5ve to ins5tu5onal investors - Professionalizing local engineering firms and developers - Mobilizing local and interna5onal ins5tu5onal investors • Global Funds and IFI’s should consider increasing its support to local FI’s, venture and private equity funds • The LAC opportunity in clean energy and DG is now! BERKANAPE.COM