Irman Boyle - PFAN Matchmaking and Bank Partnerships

8/6/2019 Irman Boyle - PFAN Matchmaking and Bank Partnerships

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PFAN Matchmaking and Bank Partnershipsfor Clean Energy Financing in Indonesia:

Irman Boyle

USAID ContractorCountry Manager for IndonesiaECO-Asia Clean Development and Climate Program

Asia Clean Energy Forum 2011

Manila, June 20-24, 2011


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Seeking financing Seeking projects/ businesses

The Missing Middle:Lack of Access to Financing

PUSH

Coaching andmentoring

businesses

Clean energy businessesand ro ects

InvestmentSources R

The Challenge

Training andAdvisory toFinancial

Institutions

PUSH

Policy Dialogue

PUSHGovernment (policies)

Required: Network, network, network Market knowledge Technical knowledge


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CTI PFAN: A Multilateral Initiative

CTI PFAN Funding Partners


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Asia Forum for Clean Energy Financing, Bangkok: March 2009,March 2010

Philippines Clean Energy Investor Forum: June 2009, June and Nov2010 Indonesia Clean Energy Investor Forum: June 2009 and July 2010 China Clean Energy Investor Forum: October 2009 and September

2010

PFAN Modus Operandi: Clean

Energy Financing Investor Forums

India Clean Energy Investor Forum: October 2010


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33 partnerships fostered during 2009-2011

80 + Projects in development pipeline, with investment value of USD 1.4 billion

21 projects secured financial closure with investment of USD 274.6 million

Asian Regional Highlight

USD 200 300 million: target leverage

Dedicated Country Networks

India China Philippines Indonesia


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21 projects -- 138 MW -- $274.6 million -- 12.2 m tons CO2

Summary of PFAN Results(Apr 2009 May 2011)


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PROJECTS PER COUNTRY

Cambodia 1China 7

India 2

Indonesia 4

Philippines 6

INVESTMENT BY CUNTRY

Cambodia 2.5

Breakdown of PFAN Projects

Thailand 1

TOTAL 21

TECHNOLOGY DISTRIBUTION

Biogas 6

Biomass 5Hydro 3

Energy Efficiency 5

Clean Transport 1

Solar PV 1

TOTAL 21

.

India 9.2

Indonesia 88.2

Philippines 123.13

Thailand 10

TOTAL 247.6


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PFAN in Indonesia

PFAN Investor Forum:Coaching, mentoring, matchmaking and

holding Investor Forum in business plancompetition format

PFAN Bank Mentoring Program:

Training and advisory services forpartner banks on clean energy projects

New strategy: two targets for PFAN assistance, i.e. working with project

partners and potential lenders in closing financing transaction


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Project Partners from Indonesia CE InvestorForum 2009 and 2010

Project Type Location Size (MW) Investment

(US$ million)

Banten Global Synergy Geothermal Banten 110 275

Tiara Energy (BSP) Biomass (rice husk) South Sulawesi 10 24

Wirajasa IPP Biomass East Java 7 21.7

Sarana Citra Persada (pilot project) Wind 6

Narpati Waste to fertilizer Central Java 250 tons/day 8

Gikoko Landfill West Java 4 10

connecting clean energy businesses with financing

e an a e r a gra n es ava .

Selo Kencana Energi (Lubuk Gadang) Hydro West Sumatera 7.5 12

Mitra Edssa Markati Geothermal East Java 10 20

Erasia Global (Pasui) Hydro South Sulawesi 2 3.7

Eco Power Indonesia (Sawangan) Hydro North Sulawesi 16 28

Indonesia Clean Energy (Dominanga) Hydro North Sulawesi 3.6 6.6

Restu Bumi Persada (Bintang Bano) Hydro West Nusa Tenggara 8.8 12

Kutilang Bangun Persada (Northsum) Hydro North Sumatera 6 15.6

Pasadena Biofuels Mandiri Wood pellets West Java 50 tons/day 1

Indonesia Clean Energy Biomass Jambi 8 15.5

Bakrie Power (Sokoria) Geothermal East Nusa Tenggara 30 127

Total 237.9 607.6


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Project Closures

Growth SumateraIndustries

Medan Biomass PowerPlant

(2 x 15 MW)

Kencana Agri Group

Pakkat Minihydro PowerPlant (10 MW)

IDR 192 010 000 000

Selo Kencana Energi

Lubuk Gadang MinihydroPower Plant (7.5 MW)

Growth Asia

Medan Biomass PowerPlant

(2 x 15 MW)

IDI


IDR 203,000,000,000

Equity and Loan Financing

Lender and Shareholder

October 2010



December 2010

IDR 159,000,000,000

Equity, Mezzanine, andLoan Financing


April 2011

IDR 219,000,000,000



May 2011

Three projects closings through our work with bank partners One project closing through our work with project partner Total 77.5 MW, Rp 773 billion (US$ 88.2 million), and

annual GHG savings of 281,700 ton/year


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Lessons Learned

Financing Barriers:

Lack of experience/trust among financiers and/or investors

Entrepreneur: Lack of banking relationships/experience

Entrepreneur: Lack of business track record


Investor/bank: Lack of investment experience

Mismatch between the available financing vehicle and projectfinancing requirement

Most debt financing is corporate finance loan

Lack of risk capital (equity/mezzanine/public fund) High cost of capital


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Lessons Learned

Project Entrepreneur:

Help entrepreneur do their homework: But to what extent? Assist withproject conception, pre-FS/FS, project structuring, PPA, for improving

project readiness

Help entrepreneur understand financing structure, for creating viable andbankable business proposal

Investor:


Seek investor with commitment, business track record, and own-money toinvest.

Create innovative financing vehicle that match project need

Bank:

Work with the regulator (Bank Indonesia) for the issuance of clean-energyfriendly banking policy, encouraging banks to finance

Provide banks with comprehensive assistance (at various stages of projectdevelopment)


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Lesson Learned: Match Financing

with Stage of Technology Maturity


Pilot

technologyproject

Biogas, POME,landfill, wind

Minihydro,direct burning

biiomass

Source: UNEP SEFI, 2008), and own analysis


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PFAN Matchmaking and Bank Partnershipsfor Clean Energy Financing in Indonesia:

Summary of Lessons Learned


Irman BoyleUSAID Contractor

Country Manager for Indonesia

ECO-Asia Clean Development and Climate [email protected]

Asia Clean Forum 2011Manila, June 20-24, 2011

Irman Boyle - PFAN Matchmaking and Bank Partnerships

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