EBRD investments in renewable energy in Central Asia

Marat Yelibayev

EBRD at a glance

▪ EBRD is an AAA/Aaa rated bank by all major three

rating agencies (S&P, Moody’s and Fitch)

▪ Capital base accounts to €30 billion.

▪ Operating in 38 economies from central Europe to

central Asia, EBRD promotes:

✓ Transition to market economies;

✓ Mobilisation of significant FDIs;

✓ Improvement of people’s lives through municipal

services enhancement;

✓ Environmentally sound and sustainable

development.

▪ EBRD has invested over €130 billion in more than

5,270 projects since 1991.

▪ EBRD is owned by 68 countries and two inter-

governmental institutions.

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Annual business volume - Investments and

Operations, 2011-2018

EBRD shareholder structure

EU 28 countries,

63%

USA, 10%

Japan, 9%

EBRD region

excluding EU, 8%

Canada, 3%

Other, 7%

9,051 8,920 8,498 8,8539,378 9,390 9,670 9,547

380 393 392 377 381 378412 395

0

100

200

300

400

500

600

700

0

2,000

4,000

6,000

8,000

10,000

12,000

2011 2012 2013 2014 2015 2016 2017 2018EURm Number of Operations

Sustainable Energy in Central Asia • Brussels, 12 April 2019 • CHARLEMAGNE BUILDING

EBRD Countries of Operation – the Bank is

increasing its footprint

4Sustainable Energy in Central Asia • Brussels, 12 April 2019 • CHARLEMAGNE BUILDING

Investments by sectors, 1992-2018

EBRD investments in energy in Central Asia

Generation

30%

Transmission

28%Distribution

3%

Renewable

Power

20%

Gas

Transportation

13%

Large Hydro

6%

KAZAKHSTAN

68%

UZBEKISTAN

15%

KYRGYZ

REPUBLIC

3%

TAJIKISTAN

9%

MONGOLIA

5%

Investments by countries, 1992-2018

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▪ Up to date, EBRD’s energy investment in Central

Asia is EUR 1,999 million and includes 46

Power & Energy projects.

▪ More than 66% of the portfolio consists of

Private sector projects.

▪ In 2018 the team invested in projects worth over

€263 million.

▪ Through investments, the Bank aims to support

sector reforms that increase competition and

liberalization of the market, strengthen

frameworks for regionalization and energy

security, prioritize energy efficiency and use of

renewable energy.

Sustainable Energy in Central Asia • Brussels, 12 April 2019 • CHARLEMAGNE BUILDING

Energy Sector Strategy: Promoting low-carbon

energy systems is the objective

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EBRD investments in energy in Central AsiaOperational Approach

Investment

Technical cooperation

Policy dialogue

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• Promoting sustainable energy

• Honest broker role

• Sharing experience and best practice

• Development equity

• Mezzanine

• Project finance

• Corporate loan

• Equity

• RE Frameworks

• Small Financing

Facilities

• PPA drafting

• Grid absorption studies

• Regulatory frameworks

Sustainable Energy in Central Asia • Brussels, 12 April 2019 • CHARLEMAGNE BUILDING

EBRD investments in energy in Central AsiaOpportunities and Challenges

▪ Exceptional resource potential (especially wind, solar, hydro) for developing renewables

▪ Strong but pragmatic political will

▪ Existing/developing legal framework, support mechanisms

Starting point

▪ Intermittent and unpredictable nature of wind and solar power, seasonality of hydro

▪ Growing competitiveness of technologies

▪ Impact of large power volumes interfering with system stability because of priority of dispatch (no balancing market)

Challenges

Opportunities

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▪ Attracting reputable foreign and local investors

▪ Attracting “know-how” and the best available technology on the market

▪ Diversification of the economy relevant for the energy sector dominated by aged power stations

▪ Carbon footprint and emission reduction

▪ Supply of carbon credits

Sustainable Energy in Central Asia • Brussels, 12 April 2019 • CHARLEMAGNE BUILDING

EBRD investments in renewable energy in Central Asia2014-2019

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✓ 15 projects

✓ 901 MW of renewable capacity

✓ USD 673 million of EBRD investment

✓ USD 1440 million total project value

Zadarya SPP

14 MW solar

EBRD: USD 9m

TPV: USD 19m

Burnoye 1 & 2 SPP

100 MW solar

EBRD: USD 124m

TPV: USD 204m

Risen SPP

40 MW solar

EBRD: USD 22m

TPV: USD 45m

Nomad SPP

28 MW solar

EBRD: USD 26m

TPV: USD 35m

Salkhit Wind Park

50 MW wind

EBRD: USD 43m

TPV: USD 115m

Sainshad Wind

55 MW wind

EBRD: USD 30m

TPV: USD 120m

Tseitsii Windfarm

50 MW wind

EBRD: USD 25m

TPV: USD 127m

Desert SPP

30 MW solar

EBRD: USD 10m

TPV: USD 48m

Qairokkum Hydro Power

126 MW hydro

EBRD: USD 88m

Shardara Hydro Power

100 MW hydro

EBRD: USD 121m

TPV: USD 147m

*TPV – Total Project Value

Chulakkurgan SPP

63 MW solar

EBRD: USD 45m

TPV: USD 77m

Saran SPP

100 MW solar

EBRD: USD 54m

TPV: USD 105m

M-KAT Green SPP

100 MW solar

EBRD: USD 58m

TPV: USD 122m

Baikonur SPP

50 MW solar

EBRD: USD 30m

TPV: USD 72m

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LEGISLATION POLICY DIALOGUE ACTIVITIES

▪ Assisting for drafting of secondary legislation

implementing the renewable energy law (2009)

▪ Advice to the Government of Kazakhstan on

Developing FiTs for Renewable Energy Sources

(2010)

▪ Advising on improvement renewable energy

primary legislation (2011)

▪ Advising on a renewable energy sources

allocation (2013)

▪ Modelling the social impact of renewable

energy feed-in tariffs (2013)

▪ Assisting in the final stage of developing

renewable energy legislation (2014)

▪ Assisting Ministry of Energy on establishing a

bankable regulatory and legal framework

(2015-2016)

▪ Strategic Environmental Review (SER) of RES

development in Kazakhstan (2015-2016)

▪ Assisting in the review of the PPA bankability

(2018)

PROJECTS

2009

• Introduction of feed-in tariff system with uniform structure

2011-2013

•Launch of operational legal framework with a set of rules and norms on renewable energy

• Introduction of (i) fixed feed-in tariffs, (ii) development of the Financial Settlement Centreoff-taking energy via (iii) development of Power Purchase Agreements agreement

2013

• Introduction Law on supporting the use of Renewable Energy

2014

• Introduction of full indexation of feed-in tariffs against inflation

2015-2016

• Introduction of the Green Economy Law which provides further supports to the development and operation of renewable energy projects

2018

• Introduction of auction scheme for RES development.

•858MW of solar, wind, hydro and biomass capacity was auctioned.

Burnoye SPP

Extension 50MW

Zadarya SPP

14MW

Risen SPP

40MW

Nomad SPP

37MW

Baikonur SPP

50MW

Saran SPP

100MW

Burnoye SPP

50MW

Shardara HPP

100MW

2012

2015

2018

2017

Sustainable Energy in Central Asia • Brussels, 12 April 2019 • CHARLEMAGNE BUILDING

EBRD investments in energy in Kazakhstan Promoting Green Economy Transition

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EBRD investments in Uzbekistan Power Sector

▪ Cumulative EBRD investment to date into

Uzbekistan totals EUR 1,517 million through 71

projects. Energy investments represent 41% of

the current portfolio.

▪ In 2018-2019 the Bank signed USD 323 million

financing for the construction of priority

transmission and generation infrastructure –

Uzbekenergo Muruntau Substation and

Talimarjan Power Project.

▪ In June 2018, the Memorandum of

Understanding on strategic cooperation in the

power sector was signed between the Bank,

State Committee for Investments and

Uzbekenergo, the national power utility.

Close cooperation with the other MDBs

▪ The Bank's initiatives in close cooperation with the

other MDBs are set to help on-going sector reform

and are thus particularly timely.

▪ In line with our Green Economy Transition mandate

we also support development of renewables and

provide assistance addressing climate change

threats and carbon intensity issues to make power

sector more sustainable.

Policy Dialogue Activities

Three expected policy dialogue activities with the

Government of Uzbekistan:

▪ a roadmap for attracting investment in the power

sector through corporate and structural reform;

▪ engagements regarding tariff affordability; and

▪ engagements on the climate and carbon side of

the power sector and renewables.

Sustainable Energy in Central Asia • Brussels, 12 April 2019 • CHARLEMAGNE BUILDING

EBRD investments in energy in UzbekistanUnfolded energy engagement in Uzbekistan

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Priority Rehabilitation program

▪ The Bank has financed the priority rehabilitation

program of Vostokelectro (VE) and Oshelectro (OE)

distribution companies.

▪ The two project includes modernisation of the low

and medium voltage power infrastructure aimed

at improved reliability, better integration of

renewable sources and reduction of technical and

commercial losses leading to the carbon emission

reduction of 4,780 tonnes of CO2 a year, or

equivalent to emissions produced by 9,800 cars

in Europe.

▪ Loan and Grant: Financing of investments in the

infrastructure upgrade to ensure that best

available technologies are deployed.

▪ TC component: EBRD provided comprehensive TC

package intended to support project

implementation, procurement process and

corporate development of both VE and OE.

Hydro Potential

▪ The Bank is keen to supporting Kyrgyzstan in

developing the hydro potential of the country by

financing the construction and operation of mini-

hydro power plants and the rehabilitation of the

existing hydro power plants.

Sustainable Energy in Central Asia • Brussels, 12 April 2019 • CHARLEMAGNE BUILDING

EBRD investments in energy in KyrgyzstanInvestments in the Power Distribution

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Client And Project

▪ Support to the Tajik state-owned power utility by

financing the rehabilitation and upgrade of dam

structure and turbine and hydro-electric equipment.

This will increase capacity of the plant from 126MW

to 170MW and strengthen the plant’s resilience

against the projected impacts of climate change.

Financial Structure

EBRD loans US$88 million

GCF Funds US$50 million

CIF funds US$21 million

Key Climate Resilience Measures

▪ Design of the upgrade to include climate resilience

considerations by modelling future hydrology under a

range of climate change scenarios and hydrological

models.

▪ Capacity building on climate and hydrological data

collection and usage, reservoir management and dam

safety, including twinning programme with staff of

world-leading HP operator Hydro Quebec.

Co-financing from the GCF

In 2017 GCF Board approved co-finance for the

Scaling-Up of Hydropower Sector Climate

Resilience in Tajikistan (Qairokkum HPP) project

Sustainable Energy in Central Asia • Brussels, 12 April 2019 • CHARLEMAGNE BUILDING

EBRD investments in energy in TajikistanScaling Up Hydropower Sector Climate Resilience

Thank You!

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Marat YelibayevPrincipal Banker

Energy Eurasia

Sustainable Infrastructure Group

Tel: +7 7172 55 42 46

Email: YelibayM@ebrd.com

EBRD HQ

One Exchange Square

London, EC2A 2JN

United Kingdom

www.ebrd.com