Toward a Sustainable Energy Future: IFC’s Work in Renewable Energy October 10, 2013 Sean Whittaker

IFC at a Glance: Private Sector Arm of the World Bank Leader in Emerging Markets Finance World’s largest multilateral source of loan/equity financing for the private sector in emerging markets IFC can provide up to 35% of a project’s financing through debt and equity US$15.4 billion disbursed in 2012, with investments in infrastructure, manufacturing, extractives, power etc. In FY12, IFC invested $2.5 billion in climate related projects. Our goal is to get to $3 billion by FY15 2

IFC’s Renewable and Energy Efficiency Portfolio 3

IFC’s Renewable Energy Power Portfolio A growing part of our business:  In the power sector, IFC has a total portfolio of $4.1 billion, including $2.4 billion in renewable energy investments (including both debt and equity)  IFC’s renewable energy investments increased fivefold since 2008 and consistently represent two-thirds of our power business Since 2008, IFC has financed:  1,860 MW of wind projects in 29 projects ($US 764m; including debt & equity)  460 MW of solar projects in 26 investments including both solar PV and concentrating solar power ($US 430m; debt & equity)  Significant portfolio in biomass, geothermal and large/small hydro  … but relatively little in small-scale renewables 4

Key Trends in Renewable Energy RE costs have fallen dramatically:  Utility wind between $US 45 and $95 per MWh (Lazard, 2013)  Utility solar between $US 91 and $104 per MWh (Lazard, 2013) Utilities increasingly comfortable with renewables:  Able to integrate variable generation up to 20% or 30% on energy basis without significant impacts on system operation  Helps to have geographic diversity and advanced forecasting Supply chains under great pressure:  Overcapacity in wind and solar has caused duress for manufacturers  Local content requirements are also causing difficulty Uncertainty in support mechanisms:  Feed In Tariffs scaled back in some countries  Uncertainty in long-term power requirements 5

Going Forward Opportunities for utility-scale renewables:  In countries just starting to “get their feet wet” with wind, solar  Need to ensure that first projects serve as an example to follow Opportunities for large-scale off-grid RE power:  Wind-solar-diesel integrated systems provide 24/7 power  RE contribution can reach 60% penetration on a capacity basis  Diesel displacement for mines and other industrial users Opportunities for smaller, distributed generation:  Provide electricity for those who are underserved, through both household devices and mini-grids  Main challenge is business models: how to scale up projects to ensure sustainability and affordability? 6