Financing of Solar Projects (PV / CSP) KfW International Experience

Workshop for Solar Energy & Smart Grid Development Jodhpur 13-15 September 2011

Agenda

RE Policies in Germany KfW International Solar Reference projects RE Finance in India Solar Projects in India The Way ahead for India

KfW Bankengruppe at a glance

Promotion of housing, environmental and climate protection, education, infrastructure, social issues

Promotion of SMEs, business founders, start-ups

International project and export finance

Promotion of developing and transition countries

RE Development in Germany
Development of electricity generation from renewable energies in Germany from 1990 to 2008
100,000 90,000 80,000
Electricity generation [GWh]

EEG 2009 ex January 2009

Hydropower Biomass*

Wind energy Photovoltaics

EEG April 2000

New EEG August 2004

70,000 60,000 50,000 40,000 30,000 20,000 10,000 0 1990 StrEG January 1991 Amendment to BauGB November 1997

share of FEC 15.1 %

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

*Solid, liquid, gaseous biomass, biogenic share of w aste, landfill and sew age gas; StrEG: Act on the Sale of Electricity to the Grid; BauGB: Construction Code; EEG: Renew able Energy Sources Act; FEC: Final energy consumption Electricity from geothermal energy is not presented due to the negligible quantities of electricity produced; Source: BMU-Brochure "Erneuerbare Energien in Zahlen Internet-Update"; KI III 1; all figures provisional; Version: December 2009

Results as of today in Germany

From 1991 to 2009 the share of Renewables in
gross energy consumption rose from 3.4 to 15.5% EUR 15 billion investment in RE in 2009 (Approx 50% funded by KfW; Approx : 40,000 new jobs on account of KfW funding in 2009)
One of the most important growth industries in Germany

2020 target was revised from 20% to 30% share in renewables. Upward revision to 47% in 2020 is feasible Average production costs to come down to 6 cents /KWh until 2030 (now approx 10.6 cents /kWh) Saved around 120 Mio. tons CO2 in 2009 top of the league worldwide for installed capacity of Biogas, Wind energy and Photovoltaic systems RE industry employs around 300,000 people

Selected References - PV
51 MWp PV-Plant Strakirchen, Bavaria, Germany
The Challenge

EUR 115 million debt required financial close in a short period of time parallelism of debt structuring and share deal

The Solution
small banking club (IPEX-Bank and Commerzbank) involvement of attractive KfW supporting loans (Programme 086)

Source: Q-Cells International GmbH

51 MWp PV-Plant Strakirchen, Bavaria, Germany

Total investment volume: approx. EUR 150 million

Value added by KfW IPEX-Bank

Remarkable ticket size Experience with financing of PV-large scale projects IPEX roles: Lead Arranger, Facility Agent and Technical Bank

KfW Financing Photovoltaic Solar Projects 2010

Selected References - PV
53 MWp PV-Plant Turnow, Brandenburg, Germany

53 MWp: largest solar PV plant in Germany and third

largest in the world (as per February 2010)

Investment: approx. EUR 160 million almost 40,000 CO2 t savings p.a. KfW IPEX Bank in the roles of Lead Arranger, Facility
Source: Juwi Solar GmbH

Agent, Documentation Bank and Cash-Flow Modeling

Other MLAs: BremerLB, DZ Bank (Security Agent),

Helaba (Insurance Agent) and NordLB (Technical Agent)

EIB and KfW- EE Ergnzung 2009 refinancing Experienced partners / producers: Juwi, First Solar,

SMA, Schletter
comprehensive due diligence package
Source: Juwi Solar GmbH

comprehensive project warranty structure

KfW Financing Photovoltaic Solar Projects 2010

Selected References - CSP

Solnova 1, 3 & 4
Own source: Site Visit during construction phase

Alvarado CSP Plant (Acciona)

Nevada Solar One (Acciona)

Start of operation scheduled for first semester of 2010 Installed capacity: 3x50MW (plus 2x50 planned) Total long term debt amount: 682 million Participation of KfW IPEXBank (club deal): 55 million

Start of operation: 2009 Installed capacity: 50 MW Total long term debt amount: 198 million Participation of KfW IPEXBank: 30 million

Parabolic Trough/ No storage Installed capacity: 64 MW In operation since July 2007 Total long term debt amount: $133 million Participation of KfW IPEX-Bank (club deal): $20 million

Selected References
ManchaSol-1: 50 MW CSP Plant
The Challenge:

Financing a CSP-Plant with salt storage w/o any long term operational data on large storage systems Credit crunch

The Solution:
Source: ACS/Cobra

ManchaSol-1

Comprehensive sponsors, EPC, O&M-contractor and suppliers guarantee package Large banking club EIB Refinancing

Total investment volume : EUR 372 million KfW IPEX-Bank ticker: EUR 45 million Completed January 2011 Molten Salt storage: 2-tank indirect 7.5 hour(s)
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Value Added by KfW IPEX-Bank

Engineering know-how on CPS-technology Provision of financing in difficult times

KfW brings in over 30 years of experience with Indian power sector

German Financial Cooperation has been Indias partner in the Energy Sector

for nearly 30 years: Supported energy sector with nearly EUR 1.3 billion budget funds and more than EUR 1 billion of KfWs own funds
Facilitated technology transfer in

key areas
Some of our cooperation partners (completed projects)
NTPCs Dadri, Farakka, Korba, Ramagundam, and Singrauli. MSEB Uran Gas Project; Koyana HE Project OHPC Hirakud HE Project IREDA-I Credit Line for RE Projects NLCs Neyveli Lignite Corporation (for Mine and Power Plant)

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KfW Energy Sector Projects in India (Ongoing Projects) - I

No 1 2 3 4 Project Name Krishnapatnam Super-Critical Thermal Pl R&M Thermal Power Plants REC-I (HVDS Project) Distribution REC-II (HVDS Project) Distribution
Borrower

PEA APGenco Sub-Borrowers APSPDCL UHBVNL

Loan in Million
EURO

Grant 0.50 0.50 0.50

GOI GOI REC REC

281.06 90.00 70.00 70.00

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KfW Energy Sector Projects in India (Ongoing Projects) - II

No 5 6 7 8 9 10 11 12 13 14 Project Name EE in Medium & Small Enterprises EE in Buildings PFC-II (Hydro) GEF Biomass IIFCL (Renewables) Pare Hydroelectric Project IREDA-II (Renewables) IREDA IV (Renewables) Anta Solar Field 125 MW Sakri Solar Power
Borrower

PEA Sub-Borrowers Sub-Borrowers UJVNL Sub-Borrowers Sub-Borrowers NEEPCO Sub-Borrowers Sub-Borrowers NTPC MAHAGENCO

Loan in Million
EURO

Grant 0.50 1.50 3.33 0.50 0.50 0.5 10 1.0

SIDBI NHB PFC IREDA IIFCL NEEPC O IREDA IREDA NTPC GoI

50.00 50.00 100.57 19.97 180.00 80.00 50.00 200.00 100.00 250

Total

1591.6

19.33

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15 MW Anta Solar Thermal by NTPC

DPR approved by NTPC.

Execution likely to start in 2011 (1st half)

Location: Anta, Rajasthan

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15 MW Anta Solar Thermal by NTPC

Technology Capacity Solar Collectors Turbine & Generator Annual DNI Average PLF

Parabolic trough 15 MWe (stand alone) 180 nos 1 x 15 MW 2, 090 kW/m2 24.5 %

Annual Net Generation

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32.163 MUs

125 MW Solar PV Plant Mahagenco

Technology Capacity Project Costs Commissioning

Crystalline & Thin Film 125 (+25) 370 million EURO April 2012

Part of Maharashtra Solar Valley Clusters Initiative

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CSP Technologies for India Parabolic Trough technology

Economical Plant Size 50-100 MW Most mature technology (lowest investment risk) 1000 MW capacity built until 2010 (plus >3000 MW until 2013) Capacity Factor 25-28% (without storage) Andasol I plant: 7.5 hours thermal storage: capacity factor to increase to 39%
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Levelized Electricity Costs: 18.6 US cent/kWh grid parity within 10 years can be expected

CSP Technologies for India Central Receiver technology (Solar Tower/ Molten Salt Storage)
Economical Plant Size 50-100 MW Relatively young technology (demonstration projects, first commercial projects under construction) 10 MW capacity built until 2010 (plus >200-400 MW until 2013) Capacity Factor 70% with 15 hours storage) Steam temperature 5400 (Par. Troughs 3800 ) Molten Salt: excellent heat transfer/high temperature energy storage fluid Levelized Electricity Costs: 18.5 US cent/kWh CAPEX 4,000-5,000 $/kW

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In the pipeline
Prefeasibility Studies with NTPC building on experience of Anta CSP in different states

Prefeasibility Studies with Mahagenco in framework of Solar Valley Clusters Initiative Feasibility studies for most promising projects Loan agreements expected for 2012/2013

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KfW Loan Structures in India

KfW GoI Guarantee PEA

(NTPC / NEEPCO)

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KfW Loan Structures in India

KfW GoI Guarantee Indian FI

(IREDA / REC / PFC / SIDBI / NABARD

Pvt / Public Sector Project Developers 20

KfW Loan Structures in India

KfW GoI (Borrower) State Govt State Utility / State FI

1 2 3 4 5 n

Pvt / Public Sector Project Developers 21

The Vision

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Thank you for your attention!

Busso von Alvensleben Coordinator Indo-German Cooperation in the Energy Sector KfW Development Bank India Office New Delhi Busso.Alvensleben@kfw.de www.kfw.de

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