Alternativas de Financiamento para as Escos
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Transcript of Alternativas de Financiamento para as Escos
Patrick DoyleMGM Innova Capital
Sao Paulo, Brazil
30 2016
August
CONGRESSO BRASILEIRO DE
EFICIÊNCIA ENERGÉTICA COBEE
INTRODUCTIONMGM SUSTAINABLE ENERGY FUND (MSEF) focuses on financing energy efficiency and renewable energy projects in Colombia,
Mexico, Central America and the Caribbean, and is now expanding to Brazil
ENERGY EFFICIENCY RENEWABLE ENERGY
Efficiency in buildings
Hotels, hospitals, shopping centers, fast food chains.
Efficiency in municipal infrastructure
Water pumping systems.
Street lighting.
Industrial efficiency
Waste heat recovery, biogas and waste biomass.
Cogeneration.
Technologies
Solar for sale to the grid.
Hydro generation (small scale) and rehabilitation of hydro electric plants.
Landfill Gas
Early stage Enter projects at early stage to add value to local developers
Distributed generation
Opportunities in countries with high electricity retail prices.
INVESTMENT TYPES AND STRATEGY
Up to 100 % of the investment by MSEFIncludes investments required for analysis, main equipment, auxiliary systems and civil and electric works needed by the projectLong-term contractsCompany not required to provide collateralContract conditions to ensure company’s balance sheets and debt capacity are not affected Early exit contract clause if so required by companyAutomatic transfer of assets to company on contract expiry
INVESTMENT FEATURES
• Based on walk-through inspection and available information• Analysis of technical and production risks• Submission of report and non-binding conditions for project
development under ESCO model
Conceptual analysis of the opportunity(A1)
• Basic engineering and adjustment of investment budget• Environmental assessment• Legal and financial due diligence• Submission of binding terms and conditions
Analysis of basic engineering and due diligence (A2 and due diligence)
• Development of detailed engineering• Procurement and project implementation• Project tests and commissioning• Close financing
Detailed engineering, financing and project implementation
• Project operations• Preventive and corrective maintenance• Monitoring of achieved savings or energy supply
Project operation, maintenance and monitoring
• Transfer of the installation in operating conditions for continued use by the companyTransfer of installation
TYPICAL ANALYSIS STEPS
Offshore
Onshore
Energy sale contract/leasing/shared savings
Equity (100%)
Dividends
Fixed monthly payments indexed to CPI
Special Purpose Vehicle (SPV)Service contract
Design, construction, installation, commissioning and monitoring
(optional: operation and maintenance)
MGM Innova Capital manages MSEF
Pre-Construction steps- Signature of term sheet- Submission to Investment Committee
1. Contract signature between SPV and Client.
2. Capitalization of SPV.
3. SPV purchases equipment and coordinates installation through service contract.
4. Suppliers provide equipment and associated guarantees.
5. Payment of investment through savings/energy generated by the project.
6. SPV returns dividends to MSEF.1
2
3
4 5
6
Client
local/international contractors
MSEFTYPICAL INVESTMENT STRUCTURE
ENERGY EFFICIENCY AND CLIMATE CHANGE MITIGATION PROJECT SUNSET HOTEL CHAIN – CANCUN, MEXICO
CASE STUDY
Scope
Replacement of chillers and air conditioners
Installation of heat recovery chiller
Installation of high efficiency lighting
Installation of temperature control systems
Replacement of air handlers
Solar water heaters
Development of Greenhouse Gas Inventory and Climate Neutrality Strategy
Equity IRR:
Contract:
Tenor/Duration:
Energy Savings Payment:
High teens unlevered
Operating lease
6 years
93% of recorded savings (Baseline) + fixed payment component (fan & coils and solar water heaters)
Before
Standard water heater Solar heaters
High efficiency cold water generatorStandard cold water generatorAfter
Savings
Electric energy: 38.40% (MX$ 6,573,243/yr)GLP gas: 32.50% (MX$ 1,369,727/yr)GHG emission reductions: 26,096 tCO2e over project lifetime (12 years)
CASE STUDY
Scope
Rooftop solar panels (98 kWp, 136 kWp and 122 kWp)
Hybrid controller to switch between solar and diesel generation
Remote monitoring system
Equity IRR:
Contract:
Tenor/Duration:
Payment Structure:
High teens levered
Operating lease
20 years (expected exit prior)
Fixed payment equivalent to $0.30/kWh in first year and $0.21/kWh in subsequent years
Savings
Renewable energy generated: 234,510 kWh/yr Fuel savings: 20.019 Gal/year (118,000 US$/yr)GHG emission reductions: 3,804 tCO2e over 20 years
DISTRIBUTED GENERATION PROJECTRED FROG BEACH RESORT - PANAMA
CASE STUDY
Scope
Replacement of AC units for VRV technology with a centralized monitoring system
Installation of high efficiency lighting
Installation of a 75 kWp solar generation system divided in three 25 kWp systems
Equity IRR:
Contract:
Tenor/Duration:
Energy Savings Payment:
Mid-teens levered
Operating lease in US$
10 years, to be negotiated
95% of the savings
Savings
Electric energy: 51.18% (237,000 US$/yr) GHG emission reductions: 7,894.8 tCO2e over project lifetime (10 years)
COMMERCIAL ENERGY EFFICIENCY AND SOLAR DISTRIBUTED GENERATION PROJECT BANCO DE AMERICA CENTRAL (BAC) – EL SALVADOR
P1 –P2
Variable flow system
Control by floor Control by air management unitOnly operates in
required area
CASE STUDY
Scope
Replacement of Municipality of Ensenada’s 25,000 street lights with high efficiency LED lighting
MSEF investment of up to US$ 2.5 million mezzanine financing for Optima’s Ensenada street lighting project
Remaining 85% of project capital structure provided by senior loans from InterAmerican Development Bank (IDB) and Canadian Climate Fund for the Private Sector in the Americas (C2F)
Equity IRR:
Contract:
Tenor/Duration:
Payment Structure:
Exit Strategy:
High teens
Sub Debt Contract (mezzanine debt)
9 years
Monthly payment with variable interest rate in MX$ adjusted to US$-MX$ exchange rate
Total sub debt repayment, or pre-payment premium
Savings
Electric energy: 59% (approx.)GHG emission reductions: 150,000 tCO2e over 20 year life of luminaires
OPTIMA STREET LIGHTING IN MEXICO
• Contractual complexity:– Lease (operating/financial?), PPA or rental?– Take or pay – on weekends/holidays?– Risks of tax and net-metering legislation changes– High legal costs for small projects– Insurance coverage
• Debt issues– Off-taker/customer credit ratings may not be available– What if customer wants a buy-out early?– Delays in bill paying possible– Finance pre-construction? EPC wrap possible? – What tenor and % leverage is likely?
• What is the expected exit/sale price for the projects?
Challenges in financing off-balance sheet distributed generation vs. utility-scale solar
Shades of : Renewable Energy (27%)
Shades of : Energy Efficiency (73%)
MSEF PORTFOLIO MSEF INVESTMENT AMOUNT PER TYPE OF INVESTMENT
Commercial EE30%
Industrial EE17%
Solar Utility5%
Hydroelectric Generation
10%
Landfill Biogas12%
Solar Distributed Generation
16%
Street Lighting10%
PIPELINEINVESTMENT AMOUNT BY COUNTRY
Costa Rica6%
Mexico18%
Colombia23%
Dominican Repub-lic5%
Panama4%
Peru2%
Honduras7%
Haiti2%
Brazil32%
Regional1%
THANK YOU !!!
Patrick DoyleManaging Director, MGM Innova Capital