Working with the European Bank for Reconstruction and ... · Yereymentau Wind Farm Project, Kazakhstan Samruk Green Energy LLP intends using the loan proceeds from the European Bank

Lisbon, 25th November 2014

© European Bank for Reconstruction and Development 2014 | www.ebrd.com

Working with the European Bank for

Reconstruction and Development

Power and Energy Utilities

AGENDA

I. Overview of EBRD financing

II. Power & Energy Utilities: Focus and Experience

III. Opportunities to work with EBRD


AGENDA





Benefits of working with the EBRD

• Flexible deal structure

• Debt finance to both public and private sector

• Syndication under preferred creditor status

• Catalyst to access additional debt

• Support of strategic investors

• Perception of quality investment

• Sector expertise through Board of Directors

• Good corporate governance

• Catalyst to access additional equity

• Positioning as neutral party

• Strong, internationally recognized partner with long term perspective

• Mitigation of political and regulatory risks

• Policy dialogue with government and regulators

• Grant-funded technical assistance

• Finance and operations monitoring

Shareholder ’ s Value

EBRD value - added

Equity Financing

LT Debt Financing

Shareholder

Value

-

EBRD

Value-added

Equity Debt


EBRD - Leveraging commercial finance

• Catalyst for commercial investment: Every €1 invested or

lent by the EBRD mobilises €3.1 from other sources

• Equity: by investing as a minority shareholder we reduce the

equity burden and add value through partnership

• Debt syndication: The EBRD can syndicate all or part of the

senior debt under A/B structures

• Debt co-financing: The EBRD will work with or alongside

other commercial banks to provide the appropriate debt

package


EBRD Facilities

• Project finance loans

• Corporate loans with specified use of

proceeds

• Tenor of 10-15 years

• Margin benchmarked to market

• Fixed rate and/or local currency

possible

• EBRD can directly finance up to 35% of

an enterprise's long term capital (or

project costs for greenfield projects);

additional funds mobilised through

syndication

• EBRD equity stake typically below 20-

25% (meaningful, but minority)

• Investment through capital increase

• Invest in Funds to address smaller

projects or larger stakes

• Exit through IPO, trade sale or put/call

agreement

• Political and regulatory risk mitigation

LOANS EQUITY


AGENDA





Power sector financing primary objectives

• Support sector reforms that enable energy sectors to function according to market principles (e.g. increased competition, market liberalization and private ownership)

• Strengthen frameworks for regionalisation (trans-border transmission lines, energy trading)

• Prioritise environmental, energy efficiency and renewable energy investments


PEU Financing by Region

• Cumulative EBRD financing to power &

energy projects since 1992 is €9.6bn

across 202 projects with €34.6bn total

value.

• PEU has invested over €1bn each of the

last four years.

• New focus on Southern and Eastern

Mediterranean (SEMed): first investments

in Morocco (2013) and Jordan (2014).

• Our involvement in Early Transition

Countries has increased, including recent

investments in Moldova, Armenia and

Mongolia.

Financing by Region

(1992– August 2014)

Unaudited as at 26 August 2014 Turkey became a country of operation in 2008, Southern and Eastern Mediterranean in 2012. Source: EBRD data


PEU Financing by Sector

• Privatisations: Made key investments in

power and gas privatisations in Bulgaria,

Moldova, Poland, Romania and Turkey .

• IPPs are a key focus: Al-Manakher

(Jordan), Kirikkale (Turkey) and Paravani

(Georgia).

• Conventional power generation projects

financed are mainly natural gas fired.

• Significant involvement in transmission

investments in Georgia, Ukraine,

Kazakhstan, Russia, and the Balkans.

• Since 2011, at least a fifth of annual

financing has been for renewable energy

generation. Unaudited as at 26 August 2014

Source: EBRD data

Financing by Sector

(2011 – August 2014)


Focus on Renewables (Region)

• The share of renewable energy financing

in the team's annual activity has grown

dramatically – from EUR 46 million in 2007

to more than EUR 200 million signed in

2013 (c. 20% of the annual investment)

• Excluding large hydro, the EBRD has been

most active in financing renewables

projects in Poland, Romania, Turkey and

Ukraine.

• Award winning transactions include Salkhit

wind farm (Mongolia), Rotor wind farm

(Turkey) and Graanul Invest biomass

(Latvia and Estonia).

• Renewable energy technologies financed

since 2011 include primarily onshore wind

(72%), with small hydro (10%), biomass

(9%) and solar (4%).

Unaudited as at 26 August 2014

Note: Renewable power excluding new build large hydro

Source: EBRD data

Renewables Financing by Region

(2011 – August 2014)



Selected PEU Transactions

Russia / Turkey Central Asia Central & SE

Europe EE & Caucasus SEMED

Thermal Generation

- LUKOIL/TGK-8 Energy Efficiency Loan (2009)

- RusHydro Bond Issue (2010)

- CAEPCO (2009)

- Aktobe CHP rehabilitation (2010)

- AES Sogrinsk (2011)

- Lietuvos Elektrine (2010)

- Latvenergo Riga CHP-2 (2010)

- Petrom Power Plant (2009)

IPP4 Al-Manakher (2012)

Renewable Energy

- Rotor Wind Farm (2009)

- Bares Wind Farm (2012)

- Salkhit Wind Farm Development (2012)

- Saturn Biomass (2009)

- Suvorovo (2010)

- Magyar and Polska (2010)

- Margonin (2010)

- Porogi Solar (2012)

- Eco-optima wind farm (2012)

- Graanul Invest (2011)

Transmission

- Federal Grid Company Bond Issue (2011)

- KEGOC Modernisation II Loan (2008)

- KEGOC Osakarovka (2011)

- Black Sea Energy Transmission System Energy (2010)

- South Ukraine Transmission Project (2010)

Electricity & Gas

Distribution

- Federal Grid Company (2010)

- SEDAS (2010)

- IZGAZ (2009)

- Sugd - Energy Loss Reduction project (2011)

- ENEA Privatisation (2008)

- Energa SA (2010)

- Gas Rimini (2010)

- OSSH efficiency improvement (2011)

- Electric Networks of Armenia (2009)

- Moldova Electricity Distribution Upgrade (2009)

- ONE-Rural Electrification and Smart Metering (2013)

- Wind farm portfolio - Iberdrola Renovables - EUR 50 mln

Bulgaria

Turkey

Poland

Project

Hungary

EBRD Investment Sponsor Debt Equity

- St. Nikola 156 MW

- Suvorovo 60 MW

- AES

- Grupo Enhol

- EUR 70 mln

- EUR 60 mln

- Tychowo 50 MW

- Wind farm portfolio

- Margonin 120 MW

- Golice 38 MW

- Kukinia 53 MW

- Global RPI

- Iberdrola Renovables

- EDP Renovaveis

- Acciona Energy

- RP Global

- EUR 30 mln (in PLN)





Regional - Enercap RE Fund

- FreEnergy

- Various

- Nelja Energia

- EUR 25 mln

- EUR 19 mln

Mongolia

EBRD: Selected wind farms financed

Romania

- Salkhit 50 MW - Newcom

- EUR 36 mln

- Cernavoda 138 MW

- Pestera 90 MW

- Vutcani & Sariochi 57 MW

- Chirogeni 80MW

- EDPR

- EDPR

- EDPR

- Various

- EUR 57 mln

- EUR 37 mln

- EUR 20 mln

- EUR 31 mln

- Rotor 135 MW

- Bares 142.5 MW

- Zorlu Enerji

- Enerjisa

- EUR 45 mln

- EUR 100 mln


Bulgaria

Albania

Russia

- Vez Svoghe 26 MW - Petrovilla - EUR 47 mln

- Hydro OGK 10 GW

- RusHydro Bond Issue

- RusHydro

- RusHydro

- EUR 53 mln (in RUB)

- EUR 110 mln (in RUB)

-Komani Dam Safety

- Power Sector

Reconstruction 800 MW

- Govt of Albania

- KESH

- EUR 13 mln

- EUR 30 mln

Georgia

- Enguri HPP Rehab

- Paravani 85 MW

- Instsoba SHP Rehabilitation

- Govt of Georgia

- Anadolu

- Prime Energy

- EUR 56 mln (in USD)


- EUR 0.4 mln (in USD)

Armenia - 20 Various HPPs 56 MW

- IEC Rehabilitation 50 MW

- Various

- RusHydro



FYR

Macedonia - Boskov Most 70 MW - ELEM - EUR 65 mln

Project EBRD Investment Sponsor Debt Equity

EBRD: Selected hydropower plants financed

West Balkans

Facility - 11 Various SHPs across 4

countries 55 MW - Various - EUR 48 mln

Croatia - Ombla 68 MW - HEP - EUR 80 mln

Serbia - EPS Hydropower 55 MW - EPS - EUR 45 mln


AGENDA





Notification of EBRD Business Opportunities

All Procurement Opportunities are published on the Bank’s website:

http://www.ebrd.com/saf/search.html?type=procurement_notice

The Bank will also arrange for publishing on:

•United Nations Development Business

•Official Journal of European Union


http://www.ebrd.com/saf/search.html?type=procurement_notice

Sample of Opportunities to work with EBRD

• Investment Related Assignments

- Due Diligence: Technical, Commercial, Legal, Economic and Environmental

• Lender’s Engineering

- On behalf of the Bank provide Engineering and/or Procurement assistance

• Donor-Funded Technical Cooperation (TC)

- Assignments related to Project Preparation (F/S, ESIA etc.)

• Project Implementation

- PIU assistance


Power & Energy Case Study (1)

Qairokkum Hydro Power Rehabilitation Project, Tajikistan

The Project includes rehabilitation of the hydro-mechanical and electro-mechanical equipment, increase of existing installed capacity from 126 MW to 174 MW by installing turbines with greater rated capacity. The Project will be implemented in two phases with the total investment amount of about EUR 157 Million. The EBRD loan in the first phase is USD 50 Million.

The project will require the procurement of the following goods, works and services:

• Power House and Concrete Dam Rehabilitation

• Supply and Installation of Hydraulic Steel Components, Turbines and Electromechanical Equipment

• Consulting Services

(shortlisting in process)



Kosovo Transmission Development Project

KOSTT the electricity transmission system operator in Kosovo intends using the proceeds of a loan from the European Bank for Reconstruction to enable KOSTT to achieve full compliance with the N-1 electricity transmission grid security criteria. Specifically, the loan will (i) improve the stability and reliability of Kosovo’s power system; (ii) reduce technical losses; (iii) and improve the TSO’s ability to manage a liberalised market system.

The proposed project has a total estimated cost up to Euro 36 million, and will require the procurement of the following goods, works and services for:

• Construction of a new 110 kV substation at Mitrovica and associated 110 kV overhead lines

• Construction of Malisheva and new 110 kV transmission line

• Construction of Fushe Kosova (SS & transmission lines) and Pristina 6

• Consultancy Services for a Project Preparation and Capacity Building

• Consultancy Services for a Project Implementation Consultant

• (shortlisting in process for both consultancy assignments)



Yereymentau Wind Farm Project, Kazakhstan

Samruk Green Energy LLP intends using the loan proceeds from the European Bank for Reconstruction and Development and Clean Technology Fund for the financing of construction, commissioning and operation of 50 MW wind power plant in the region of Yereimentau. Being a large-scale wind energy project in Kazakhstan, the project has the potential of becoming an example of successful implementation of a project-financed renewable energy project in the country.

The proposed project has a total estimated cost up to Euro 94 million, and will require the procurement of the following goods, works and services for:

• Consulting Services to support the Client’ Project Implementation Unit (PIU) (shortlisting in process)

• Supply and Installation (turnkey type) of an up to 50 MW Wind Power Plant (including Operation & Maintenance)



Small Hydro Power Project Serbia

Elektroprivreda Srbije (EPS) intends using the proceeds of a loan from the European Bank for Reconstruction and Development for a project to rehabilitate fifteen (15) Small Hydro Power Plants (SHPPs), and the construction of two (2) New SHPP on existing water management dams in Serbia, leading to improved efficiency and carbon savings.

The proposed project has a total estimated cost of about Euro 50 million, and will require the procurement of the following goods, works and services for:

• Supply and Installation of Equipment (turbines and electromechanical equipment, gates, electrical protection and remote control systems) in three (3) Groups of tenders covering West, East and Central Serbia

• Civil Works tenders (three separate tenders)

• Consulting Services to include Environmental Expert and Independent Engineer (selection process not yet started, tentative invitation

Shortlisting 1st Qtr 2015)



Kyzylorda Electricity Distribution Project, Kazakhstan

The Joint Stock Company Kyzylorda Regional Electricity Company (KREC) intends using the proceeds of a loan from the European Bank for Reconstruction and Development for the financing of the rehabilitation and modernization of low and medium voltage distribution networks in Kyzylorda Oblast, including the installation of modern electricity meters and automatic control systems.

The proposed project has a total estimated cost of about USD 30 million, and will require the procurement of the following goods, works and services for:

• Rehabilitation of low and medium voltage distribution networks

• Supply and Installation of an automated system for protection of distribution network and substations

• Supply and Installation of modern electricity meters and auxiliaries including SCADA system

• Consulting services to support the Project Implementation Unit (PIU)

• Consulting services to support the Corporate Development Programme for KREC

• Lenders monitoring Consultant


EBRD Standard Tender Documents

What type of Standard Tender Documents do we use?

http://www.ebrd.com/pages/workingwithus/procurement/project/standard.shtml

•Procurement of Supply and Installation of Plant and Equipment

•Procurement of Works

•Procurement of Goods and Related Services


http://www.ebrd.com/pages/workingwithus/procurement/project/standard.shtml

How to work together/maximise possibilities

• Get to know the EBRD procurement rules (www.ebrd.com)

• Gain confidence of Operation Leaders by proactively contracting small assignments (e.g. due diligence assignments, usually below €75k)

• Focus on tied TC assignments

• Check EBRD website for business opportunities and “sell” your expertise to Clients and Operation Leaders in an early Stage

• Project Summary Documents (carefully read its Technical Cooperation and Business Opportunities Sections)

• Inform Operation Leaders (appear on PSD) a summary of your capability

• Form association with reputable firms to enhance overall success of the JV/consortium

• Cooperate with qualified local partners


http://www.ebrd.com/

Thank you

Rita Sá Couto Principal Banker/ Portfolio Manager +44 (0)207 338 6360 [email protected]
