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Supporting Scaled Up Private Investments in Clean Energy Infrastructure. Washington, D.C., October 6&7, 2014.

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Presentation on theme: "Supporting Scaled Up Private Investments in Clean Energy Infrastructure. Washington, D.C., October 6&7, 2014."— Presentation transcript:

1 Supporting Scaled Up Private Investments in Clean Energy Infrastructure. Washington, D.C., October 6&7, 2014

2 TYPE OF PROJECTSSELECTION CRITERIA Technical Feasibility - Proven technologies - Environmental friendly Commercial Feasibility - Off- Taker Quality - PPA & Business model Financial Feasibility - Profitability - Leverage - DSCR Sustainable Projects. 2 Strategic Lines. Encourage and support the development of RE and Low Carbon projects in Mexico. Design and implement long-term financing schemes. An effective use of domestic, private and public financial sources, scale up Climate Funds and International Financial Agencies funding for Mexican projects. Projects with big impact on CO 2 Emission Reductions.

3 Renewable Energy Program. Nafin has set a credit offer for Sustainable Projects, including: Long-Term Debt for EPC, BOS & Project development; Short-Term Debt for construction VAT payments. Contingent Credit Lines for renewable projects (Tariffs / Market Risk, Reserves) Partial credit guarantee for small size sustainable projects (through financial intermediaries in Mexico). Potential MXP funding for foreign banks to fund their participation in Mexican projects. “Tailor Made” Financing. The financial scheme can be: Project Finance. Corporate. MXP or USD denominated. Fix or Floating interest rate. 3 Focused on large projects (more than 30 million dollars) Structuring case by case In Partnership with commercial banks and international agencies (Club Deal, Syndications).

4 Social Impact considerations. 4 For Nafin is very important the acceptance of the project by the community. Such projects generate huge social and economic benefits for the people. It has been possible to make a productive use of lands that had no source of income before. All of this is verified by a specialized social impact due diligence in the project sites, as well as an environmental due diligence.

5 Leverage International Resources. RE TypeMW USD Million Leverage / Scale up Total investment Nafin Wind 1,605.1 4,070.6 579.37.03x Solar PV 55.4 153.3 84.41.82x Mini-Hydro 28.8 81.7 48.81.67x Co-gen 300.0 700.0 74.89.36x TOTAL 1,989.3 5,005.6 787.36.36x  CTF 70.071.5x  IDB/CTF 320.015.6x 5 Renewable Energy Program. CTF US$ 70 million IDB US$ 250 million Total Funding US$ 320 million Nafin US$ 787 million Nafin's Portfolio. US$ 5 billion. Total investment; 2 GW installed capacity. 4.5 million CO 2 tons emissions avoided.

6 6 Taxi-Cabs replacement. Loans to replace old taxi-cabs. Incentives from Gov. for scrapping old units are included (Bonus). Modernization of Transport Sector Loans to modernize the transport units of cargo and passengers in Mexico. Incentives from Gov. for scrapping old units are included (Bonus). Natural Disasters. Loan Program Designed to help business to recover after a natural disaster or an economic or social event that interrupts their business activities. Green Financing "Eco-Credit" for SME's Substitution of non-efficient equipment. Individualized energy efficiency diagnosis. Financing the purchase of Certified energy-efficient equipment. Financing an energy efficient diagnosis considering equipment and production processes. 7,012 credits Portfolio of USD$20MM NAFIN's Green Sectorial Programs.

7 Financing Geothermal Exploration Risk. 7 Nafin, CTF, IDB and SENER are working in the design and implementation of an insured financing instrument for early exploration in Geothermal Projects. This will contribute to solve financial barriers for the development of geothermal energy projects. The early exploratory phase is where the highest risk in this technology is allocated

8 Investment Opportunities on the Energy Sector (National Energy Strategy 2013- 2027) 8 SOURCE: SENER / National Energy Strategy 2013-2027. Mexico's growth in energy consumption will need large investments in production, transportation and distribution of electricity infrastructure in the short-mid term. The next 15 years Mexico will require at least 55 GW of new capacity, including the replacement of 12 GW in substitution or modernization for obsolescence. Potential.

9 Nafin has had the opportunity to participate with the main Financial International and National Institutions, in the support of Renewable large scale Energy Projects in Mexico. With a current portfolio of 2 GW worth 5 billion, NAFIN has proven to be a suitable vehicle to scale Climate Funds for Renewable Energy projects. Nafin has designed long term schemes and structures, creating solutions for Mexican projects, taking the Projects Risk. All of this without neglecting the support that Nafin represents for the Small and Medium Size enterprises with massive financial programs and guarantees to support their growth. Conclusions. 9


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