07/15/981 Winrock International FINANCING WORKSHOP John Kadyszewski Winrock International June 19,...
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Transcript of 07/15/981 Winrock International FINANCING WORKSHOP John Kadyszewski Winrock International June 19,...
07/15/98 1Winrock International
FINANCING WORKSHOPFINANCING WORKSHOP
John KadyszewskiWinrock International
June 19, 1998
ASES Solar 98
07/15/98 2Winrock International
OverviewOverview
• Winrock Perspectives
• Primary Challenges
• Winrock Actions
• What have we learned?
07/15/98 3Winrock International
Winrock PerspectivesWinrock Perspectives
• Private capital essential for renewable energy market development
• Global privatization of power sector bypassing rural areas
• New technology changing development options
• New role required for public institutions
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Goal—Attract
private capital
07/15/98 5Winrock International
New Role for Public InstitutionsNew Role for Public Institutions
• Set development priorities
• Create enabling environment
• Reduce credit risk
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Primary ChallengesPrimary Challenges
• Make markets visible
• Develop local operational infrastructure
• Lower investment transaction costs
• Improve access to credit
• Increase ability to pay
• Reduce the real cost of capital
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Cost of CapitalCost of Capital
GDP
Real Interest Rate
Time
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Winrock ActionsWinrock Actions
• Build local capacity
• Implement model projects
• Catalyze investment
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Build Local CapacityBuild Local Capacity
• YBUL• PEI• Fundacíon Solar• REGAE• EACA
• SELCO• MICROSUL• ABEER• ACOPE• APETINDO
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What have we learned in Asia?What have we learned in Asia?
• NGOs manage small wind systems in Indonesia
• Subsidy-free PV in India
• Lower transaction costs in China
• Financing renewables in the Philippines
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Indonesia Wind SystemsIndonesia Wind Systems
• Target markets where energy willincrease income
• Strengthen NGO capability tomaintain systems and collect fees
• Technical assistance to assureincome growth
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Marketing Mechanisms of Marketing Mechanisms of SELCO IndiaSELCO India
• Cash sales
• Sales through banks
• Leasing
• Sales via IREDA loans
• Sales through local institutions
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Preparing Projects in ChinaPreparing Projects in China
• Form local joint venture company
• Prepare projects for Swiss environment fund
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PEI Finances Renewable EnergyPEI Finances Renewable Energy
• Strengthen enabling environment
• Conduct local due diligence
• Reduce transaction costs
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What have we learned in Latin What have we learned in Latin America?America?
• Financing operational infrastructurein the DR
• Invest through communities in Brazil
• NGO investment in Guatemala
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REGAE--Financing Operational REGAE--Financing Operational Infrastructure in the DRInfrastructure in the DR
• Lease-to-own program
• Provide credit for service companies
• Co-invest with local banks
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Invest Through Communities Invest Through Communities in Brazilin Brazil
• World Bank loan for Ceara, Bahia, and Minas Gerais
• 1-3 million households over 10 years
• Follow community priorities
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NGO Investment in Guatemala--NGO Investment in Guatemala--Fundacíon SolarFundacíon Solar
• Educate donors on importance of credit versus gifts
• Link renewables with relevant applications
• Leverage new funds
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Fundacíon Solar NGO PartnersFundacíon Solar NGO Partners
• Plan International
• World Vision
• UN High Commissioner for Refugees
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New Technology New Technology Changing OptionsChanging Options
• Improved access to information
• New ways to increase rural productivity
• Enhanced quality of life
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Stages of Finance in ChinaStages of Finance in China
• Allocation of government resourceswithout recovery
• Allocation with recycling
• Recycling with market interest rates
• Commercial financing
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Renewable Energy IssuesRenewable Energy Issues in China in China
• Affordability
• Manage credit in concert with ability to pay
• Avoid damaging markets with subsidies
• Create new pathways for finance
• Move from allocation to market returns