Transcript Document 7310730

Table ronde n°4
Mécanismes de financement
innovants au service de la
transition écologique :
exemples étrangers
TABLE RONDE N°4
Mécanismes de financement innovants au service de la
transition écologique : exemples étrangers
> Rudolf Hennes
vice-président, kfW Privatkundenbank-Programme
Development Housing
> Sylvie Lemmet
directrice de la division Technologie, industrie et
économie, PNUE
> Virginie Marchal
analyste politique, direction de l’environnement de
l’OCDE
> James Ranaivoson
conseiller de direction actions opération climat,
Banque européenne d’investissement
Rudolf Hennes
vice-président, kfW Privatkundenbank-Programme
Development Housing
Promoting Energy Efficiency in Germany
●
Dr.-Ing. Rudolf Hennes
Vice President
KfW Bankengruppe
Paris
12.07.2012
A bank with a wide array of functions
Domestic promotion
International business
We ensure
internationalisation
We promote Germany
Business Area
Mittelstandsbank
Business Area
Privatkundenbank
Business Area
Kommunalbank
Promotion SMEs,
business founders,
start-ups
Promotion
construction
of new housing
and modernisation
as well as education
Financing municipal
infrastructure
projects and
global loans
Germany/Europe
agency business for
Federal Government
We promote
development
Business Area
Export and Project
Finance
Business Area
Promotion of
Developing and
Transition Countries
International
project and
export finance
Promotion of
developing and
transition countries
Promotion of environmental and climate protection
26
How to Promote Energy Efficiency?
Tambourine
Carrot
(Communication,
Consulting, Technical
Capacities)
(Low Interest Loans,
Grants, Partial Debt
Relief)
Stick
(Laws, By-laws, Technical Standards, DIN-Standards, Building Codes,…)
7
KfW‘s Business Model
for commercial and private customers
Funding by KfW and on-lending through retail banks
Capital
market
State liability
Institution owned
by Federal Republic
and federal states
Funding
AAA Rating
Refinancing
loan
Loan to
customer
retail
bank
Customer
Interest rate
Interest
subsidy
German
Government
or KfW
Interest rate
Margin for credit
risk and handling
Promotional
mandate
defined by KfW Law
Advantages:
• no distortion of competition
• Concentration on core competences
• Diversification of risks
8
Energiewende – Programmes of KfW
KFW-ACTIONPLAN ENERGIEWENDE
RE
EE
Innovation for Energiewende
KfW-Programme
KfW-EE Programme
ERP-Innovationsprogramm
Offshore Wind Energy
Increase of max. loan amount to. 25 Mio. EUR
Increase of max. loan amount to 25. Mio EUR
EE Construction and Retrofit (Residential B.)
Increased Grant Element
New: Effizienzhaus Denkmal
EE Construction and Retrofit (Non-Residential B.)
New: Effizienzhaus 55, 70 und Denkmal
Inclusion of municipal enterprises
KfW-Programme RE
Increase of max. loan amount to 25 Mio. EUR
IKK-/IKU KfW-Investment Loan
Municipal enterprises; social welfare org.
Increase of loan amount tof 50 Mio. EUR
Energetic Urban Rehabilitation
Grants and loans to municipalities
Public Lighting
Loans to municipalities
Financing Initiative Energiewende
Direct loans for larger enterprises
Programmes of SME Bank
Progr. of Private Customers Bank
Programmes of Municipal Bank
9
Promotional effects
10
Sylvie Lemmet
directrice de la division Technologie, industrie
et économie, PNUE
Virginie Marchal
analyste politique, direction de l’environnement
de l’OCDE
Towards a green investment policy framework
The case of Low Carbon, Climate Resilient Infrastructure
Presented by Virginie MARCHAL
Le financement de la transition écologique
Jeudi, 12 juillet 2012
Ministère de l’économie et des finances
Why infrastructure matters?
GtCO2e
130
120
110
100
90
80
70
60
50
40
30
20
10
0
2010
Outlook Baseline
450 ppm Core
3-6°C by 2100
2°C by 2100
2020
2030
2040
2050
2060
2070
2080
2090
2100
Source: OECD Environment Outlook to 2050
Long infrastructure lifetimes means it has a strong lock-in effect for climate –
locking in both vulnerability and emissions for decades to centuries
14
Need to act now!
The infrastructure financing gap
Infrastructure needs (annual, in USDtn illustration, need to be adapted to country context)
3
2.5
?
2
1.5
1
0.5
Private sector participation
0
Actual spending in infrastructure
Infrastructure deficit
Mitigation and adaptation needs
Source: OECD illustration, based on estimates from WB, WEF, OECD and Kennedy and Corfee 2012,”Mobilizing
private sector investment in low carbon infrastructure”
•
CHALLENGES
Scale-up sources of capital, public and private
• Shift sources from brown to green
15
The barriers to private sector engagement
• Barriers linked to infrastructure
•
•
•
High capital upfront
Relatively low-return
Very long investment timelines
Balancing the risk-return profile to
attract private sector investment
RETURN
RISK
• Barriers linked to climate market
failure
•
•
•
Less profitable than LCR alternatives
Lack of familiarity
Higher policy risk
• Contextual barriers
•
•
New financial regulations restrain the
availability for long term capital
Project finance is drying up
Role of the public sector:
1. Reform policies to improve the risk-return value proposition of green
infrastructure
2. Leverage public sources of finance to mobilise the private sector
16
TOWARDS A GREEN INVESTMENT POLICY FRAMEWORK
The need to combine investment and climate policies
1. CLEAR GOALS
Strategic goal setting and
alignment
5. ENGAGEMENT
Promoting green
business and consumers
behaviours
2. ENABLING GREEN
INVESTMENT
Enabling policies for
competitive, open markets;
incentives for green
investment
4. RESOURCES
Harnessing public and
private resources and
capacity
3. MOBILISING GREEN FINANCE
Financial policies, tools and
instruments
Two objectives:
1. Social and economic provision of infrastructure at the lowest cost
2. Improve the risk-return value proposition of green infrastructure assets
The challenge of sustainable transport
Specific challenges
• Scale: Passenger
transport volumes x2.5 in
2050, freight x4,
urbanisation: +2.8 billion
people in cities by 2050
• Shift: natural bias towards
road infrastructure
• Public sector: low returns,
predominant role of the
public sector
Priorities
Integrate transport and land use
planning
CBA based on co-benefits
Market structure
Price externalities beyond carbon
Remove fossil fuels subsidies
Mainstream LCR in public
procurement
Integrate financing and planning
(scale up and earmark public
revenues, subsidies)
Land value capture tools for private
investors
Bonds
Harmonising GHG emission
accounting
18
Why pensions funds are not investing more?
Barriers to institutional investment in clean energy
Barriers to institutional investment in clean energy
Problems with
1 Infrastructure
Problems with
1 Investments
Infrastructure
Investments
▪ Lack of project pipeline
▪ Lack of project
investorpipeline
understanding
▪ Regulatory
barriers
Lack of investor
understanding
▪ Regulatory barriers
Problems with
2 clean
energy
Problems
with
2 investments
clean energy
investments
▪ Carbon pricing and fossil fuel subsidies
▪ Unpredictable
policy support
Carbon pricingand
andfragmented
fossil fuel subsidies
▪ Special
species
of risks
Unpredictable
and
fragmented policy support
▪ Special species of risks
Lack of suitable
investment
3 Lack of suitable
Vehicles
investment
3
(climate bonds)
Vehicles
(climate bonds)
▪ Nascent and illiquid climate bond markets
▪ Challenges
securitisation
Nascent andwith
illiquid
climate bond markets
▪ Credit
issues
Challenges
with securitisation
▪ Credit issues
Source: OECD (2012 Forthcoming) The Role of Institutional Investors in Financing Clean Energy
Thank you!
Contacts:
Jan Corfee-Morlot ([email protected]), Senior Policy Analyst
Virginie Marchal ([email protected]), Policy Analyst
Geraldine Ang ([email protected]), Junior Analyst Policy Analyst
Christopher Kennedy , visiting scolar
www.oecd.org/env/cc/financing
20
3. MOBILISING GREEN FINANCE
Financial policies, tools and instruments
Level of Financial Sector Development
Low
Medium
High
Low Income Countries
Middle Income Countries
Upper Middle Income and
High Income Countries
Banking Services
Basic Banks
Full Range Banks
Universal Banks
Non-Bank
Financial None
 Government Bonds
 Government and
Services
 Equity
Corporate Bonds
 Equity
 Alternatives (Private
equity, venture capital)
Interest Rate
Administrative Setting
Largely Market Based
Fully Market Based
Access to Finance for SMEs
Limited
Partial
Readily Available
Availability of Long-Term
Funding
Risk Management
Clean Energy Financing 
Instruments


Limited
(up to 1 year)
Weak
Lines of Credit

(liquidity support)
Concessional Financing 
Dedicated Debt Funds
Partial
(up to 7 years)
Adequate
Lines of Credit
(demonstration)
Partial Risk Guarantee




Full
(up to 15 years)
Robust
Lines of Credit
(demonstration)
Partial Risk Guarantee
Equity Funds
Consumer Financing
Source World Bank 21
4. APPLICATIONS AND NEXT STEPS
Infrastructure relationships in virtuous circles of low carbon growth
POWER
GENERATION
Low carbon
electricity enables
greening of
buildings & vehicles
Lower investment in
oil & nat. gas infra.
frees up capital for
green energy
generation
Policies to promote energy
efficiency and low carbon
technologies for buildings
& vehicles
BUILDINGS &
VEHICLES
Decreased demand for
oil & natural gas, and
their infrastructure
OIL & NAT. GAS
INFRASTRUCTURE
Sources: Kennedy C. and J. Corfee Morlot, 2012 forthcoming, Mobilising private
22
investment in low-carbon, climate resilient infrastructure, OECD.
4. APPLICATIONS AND NEXT STEPS
Infrastructure relationships in virtuous circles of low carbon growth
POWER
GENERATION
Low carbon
electricity enables
greening of
buildings & vehicles
Lower investment in
oil & nat. gas infra.
frees up capital for
green energy
generation
PORTS
AIRPORTS
Decreased
demand for
coal & oil frees
up rail and port
capacity
Policies to promote energy
efficiency and low carbon
technologies for buildings
& vehicles
BUILDINGS &
VEHICLES
Decreased demand for
oil & natural gas, and
their infrastructure
OIL & NAT. GAS
INFRASTRUCTURE
ROAD
RAIL
Sources: Kennedy C. and J. Corfee Morlot, 2012 forthcoming, Mobilising private
23
investment in low-carbon, climate resilient infrastructure, OECD.
4. APPLICATIONS AND NEXT STEPS
Infrastructure relationships in virtuous circles of low carbon growth
Growing use of port
capacity for global
trade in components of
green buildings,
vehicles and energy
supply systems
POWER
GENERATION
Low carbon
electricity enables
greening of
buildings & vehicles
Lower investment in
oil & nat. gas infra.
frees up capital for
green energy
generation
PORTS
AIRPORTS
Decreased
demand for
coal & oil frees
up rail and port
capacity
Policies to promote energy
efficiency and low carbon
technologies for buildings
& vehicles
BUILDINGS &
VEHICLES
Decreased demand for
oil & natural gas, and
their infrastructure
OIL & NAT. GAS
INFRASTRUCTURE
Policies to restrict
growth in air freight,
and maintain freight
transport by rail and
marine transport
Demand management &
switching of freight to
rail decreases demand
for road infra. freeing up
capital for low carbon
vehicles
ROAD
Switching of freight from
road to rail to replace
transport of coal
RAIL
Sources: Kennedy C. and J. Corfee Morlot, 2012 forthcoming, Mobilising private
24
investment in low-carbon, climate resilient infrastructure, OECD.
James Ranaivoson
conseiller de direction actions opération climat,
Banque européenne d’investissement
European Investment Bank
Financing the Ecological Transition
James RANAIVOSON
12 July 2012
Financing the Ecological Transition
Climate Action in EIB Corporate Operational Plan………….3
EIB Group (EIB/EIF) Financial Tools….………………………..4
Challenges : EIB Contribution………………………………..5-6
Infrastructure Layered Debt Funds.....………………………...7
Project Bonds……….……………………………………………..8
Generic Structured Bonds………………………………………9
European Investment Bank
Page 27
Climate Action in EIB’s Corporate Operational Plan
 EIB COP Target Context : 25% of total lending contributing to Climate Action
 Projects qualify from following sectors/project types: Energy Efficiency, Renewable Energy,
Sustainable Transport, Forestry and Land Use, RDI, Adaptation, GHG capture or
avoidance
25.0
Sum of AMOUNT
Millions
28%
25000
20.0
30%
21%
EIB signatures (bn EUR)
20000
15000
10000
5000
0
2009
Sustainable transport
2010
RE
RD& I
17%
10.0
5.0
2011
EE
15.0
Other
0.0
2008
2009
2010
2011
Year of date of signature
European Investment Bank
Page 28
EIB / EIF Financing Tools
Risk Capital
Growth Capital
 Purpose: IP and Technology
Transfer, Pre-seed & Seed &
Early Stage financing
 Purpose: Access to
additional capital to finance
growth
 Intermediaries / Partners: (i)
Research Centres,
Incubators, Business Angels,
Microfinance Financers,
Development & Promotional
Banks; (ii) Early Stage VC
Funds
 Intermediaries / Partners: (i)
Development & Promotional
banks, Commercial Banks,
Private Institutional
investors, Public Regional
Managing Authorities & local
banks; (ii) Growth Equity or
Hybrid Mezzanine VC Funds
 Products: EIF as Fund-of-VC
Funds manager on behalf of
EIB, EC and other public or
private mandators
Seed / Start-Up Phase
 Products: (i) EIF as Fund-of
VC Funds manager on
behalf of EIB, EC and other
public or private mandators;
(ii) EIF as Holding Fund
managers of EU structural
funds dedicated to finance
growth capital
Emerging Growth Phase
Mid-Market and
Risk Sharing Finance
 Purpose: Access to
capital for stage of
commercialisation ;
stimulate loans to subinvestment grade
companies
 Intermediaries / Partners:
Same as (i) for Growth
Capital ; (ii) Private MidMarket Equity Funds
 Products: Same as (i) for
Growth Capital; (ii) EIBEC joint RSFF; (iii) EIB
and/or EIF guarantees or
credit enhancement of
SME loan securitisation
Development Phase
European Investment Bank
Investment Loans
 Purpose: Direct Loans to
large companies and
projects; Intermediated
(Global or Framework)
Loans through eligible
banks to small companies
and projects
 Intermediaries/Partners:
(i) EU investment grade
companies, projects and
banks; (ii) EU 27 &
accessing sovereigns; (iii)
non-EU eligible countries,
companies/projects/banks
 Products: (i) EIB Loans or
Guarantees from own
funds; (ii) Loans or
Guarantees from EC and
MS Mandates
Later Stage
Counterparts
Page 29
Challenges: EIB contribution (1)
Emphasis:
INNOVATION
• Support to various stages of RDI in clean and green technology
SUSTAINABLE ENERGY
• Continue expansion of renewable energy (RE) production infrastructure
• Expand energy networks (grids) especially to integrate generation from RE
• Play Catalytic role in energy efficiency initiatives inc. “smart” technology
RESOURCE EFFICIENCY
• Scale up support to natural resource management (particularly water, forestry,
ecosystem services, sustainable agriculture & fisheries…) and waste
management
TRANSPORT
• Pursue strong support to sustainable and resource efficient transport
European Investment Bank
Page 30
Challenges: EIB contribution (2)
Lending, Blending, Advising:
In complement to higher lending volumes where applicable:
• Enlarge the scope - in terms of final beneficiary development stage - of
some existing financing tools, reinforce or wake up others: mezzanine,
RSFF, structural funds, bonds as loan substitutes, securitization, green
bonds...and strengthen/expand target sectors: trade finance, biomass, rural
development…
• Optimize the use of Infrastructure (PPP, RE, Environment, Forestry, Land
Use, Carbon reduction etc) Private (or Debt) Equity Funds
• Built upon existing experience of blending EC budget + EIB own funds and
leverage of structural funds to better use financial intermediaries and
catalyze private/institutional investors investments
• Prepare for scaling up pilot projects particularly Project Bonds and
Structured Debt Funds
• Expand provision of Technical and Financial Advice funded by EC budget,
structural funds and Member States
European Investment Bank
Page 31
Infrastructure Layered Debt Funds
•
Principle:
– Utilize EC and 3rd party (sovereign) capital
– 1st loss piece is issued by the EC and Sovereign Donors;
– EIB leverages off this by going into the 2nd loss piece beside other
IFIs/DFIs
•
Examples in Energy Efficiency: Green for Growth (8 target partners countries
in Southeast Europe ) , EEEF (pan-European)
•
Capital Structure:
Private investors
Private investors, EIB, other IFIs
EIB, other IFIs
EC, Sovereign Donors
Notes
Senior – A Shares
Mezzanine - B Shares
Junior - C Shares
European Investment Bank
Page 32
Project Bonds
•
Case of EIB funded subordinated debt
Bond issue and
underwriting
SPV
Project
Costs
Project Bond Investor
Project
Bonds
Target
rating
minimum A-
EIB Sub-debt
max 20% of the
bond issue
Equity &
Quasiequity
 EIB sub-debt participation can be combined with different types of funding sources
(bonds and other senior loans)
European Investment Bank
Page 33
Generic Structured Bonds
Private
Institutional
Investors
Investment Grade Bond
Project / Portfolio
Sponsor
Security
Governments?
Other IFIs, DFIs
Performance Guarantees
SPV
European
Commission
EC FLP
European
Investment
Bank
EIB, IFIs,
DFIs Loans
Senior
Debt
Possible
participations
FLP = First Loss Piece.
Infra PE or
Debt Fund
Equity
of Loan
Assets
Loan 1
Loan 2
Port.
SubDebt
Structural Funds
Receivables
Lending
Loan 3
…
Loan n
Possible
participations
Equity or Quasi-equity contribution
EIB could be investor in bond as loan substitute for a single project, senior or junior lender to an SPV of loan
securitization, credit enhancer or guarantor of such SPV (that could be covered bonds) etc.
European Investment Bank
Page 34
Contacts
European Investment Bank
100, bd. Konrad Adenauer
L-2950 Luxembourg
www.eib.org
James RANAIVOSON
Managerial Adviser
Structured Finance Climate & Environment
Email: [email protected]
Phone: +352 4379 87315
European Investment Bank
Page 35