Deva presents the IFC’s role in working with private enterprises in more than 100 countries, using capital, expertise, and influence to help eliminate extreme poverty and boost shared prosperity. In FY14, IFC provided more than $22 billion in financing in developing countries.

1. Deva De Silva
November 2015
PACIFIC RENEWABLE ENERGY FINANCING
Pacific Panel Session: Connect 2015

2. 1. Energy Access in the Pacific
2. IFC’s Approach to Renewable Energy and Energy Efficiency
Financing
3. IFC’s Renewable Energy and Energy Efficiency Financing
Regional Experience (Case Study)
Contents

3. • Heavily reliance on imported petroleum based fuels.
Around 50% of power generated in PICs is diesel
generated, leading to energy security concerns, very
high electricity tariffs and price fluctuation.
• Economies of scale. Most PICs are small and
disbursed, made up of many islands, sea locked and
geographically fragmented and/or remote. This makes
larger energy infrastructure projects less economically
compelling.
• Energy intensive industry and off-grid locations.
Tourism, mining and manufacturing are three of the
largest contributors to GDP in many PICs; all are
energy intensive. Many industries are located on the
city fringe or in remote areas and are off-grid.
• Limited access to capital. Small or early stage private
sector companies have seen opportunities to profit
from addressing these issues, but have struggled to
access viable financing options due to real or
perceived risks, particularly for renewable energy
investments. Market intelligence suggests banks have
limited experience in evaluating renewable energy
risk.
Challenges with the power sector in the Pacific…
37.78
141.34
67.03
14.44 15.46 16.59
0
50
100
150
200
250
300
350
Solomon
Islands
Papua New
Guinea
Fiji Tonga Vanuatu Samoa
Grid Capacity [MW] Diesel Generated [MW]
Pacific Energy Mix
Country Tariff
USD/kwh
Diesel
Generated
Power
Electricity
Access
Solomon Islands 0.87 100% 10%
PNG 0.43 33% 12%
Fiji 0.24 48% 81%
Tonga 0.53 49% 90%
Vanuatu 0.59 81% 28%
Samoa 0.45 31% 98%
Source of all data: IRENA, ‘Pacific Lighthouses-Renewable Energy
Road mapping for Islands’ 2013 ENA, ‘Pacific Lighthouses-Renewable
Energy Road mapping for Islands’, 2013.

4. …Result in some of the lowest rates of grid access in the
world
• The aggregated energy access rate
in the PICs is lower than some of
the poorest countries in the world;
and one of the lowest in East Asia
Pacific.
• This dramatically impacts their
economic and social development.
In Papua New Guinea, for example,
the lack of grid growth has led to a
widening of the gap in income per
capita between PNG and its
neighbors.
0
20
40
60
80
Laos Pacific Isand Countries Sub-Saharan Africa
Percentage of Households with Access to Electricity
0
1000
2000
3000
4000
5000
6000
7000
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
GNI per capita EAP relative to Pacific Island Countries
East Asia & Pacific (developing only)
Papua New Guinea (2014 unavailable)
Pacific island small states
Source: : IRENA, ‘Pacific Lighthouses-Renewable Energy Road mapping for Islands’, 2013
Source: World Bank Group

5. Current Committed Power Portfolio
(As of September 30, 2014)
IFC OWN-ACCOUNT PORTFOLIO – IFC IS ACTIVE IN
ALL REGIONS AND ALL POWER SUBSECTORS
4
Current Committed Power Portfolio
(As of September 30, 2014)
Power = US$ 6.3 billion
Total = US$ 51 billion

6. 5
IFC’S VALUE-ADD IN POWER TRANSACTIONS
From Patient Equity to
Long Term Debt
Sector Expertise
Country Risk
Mitigation
Environmental &
Social Risk
Management
Advisory
Services
EQUITY
 Up to 20% in project or
company
 On selective basis, start-
up equity/co-developer
under Joint Development
Agreement
SUB-DEBT
 Terms tailored to meet
project needs
DEBT
 Long Maturities Tailored
to Project Needs
 Fixed/Floating Rates,
Local Currencies
 Flexible Amortization
Profile
 Syndication/Mobilization
 Deep sector
knowledge gained
from experience
 In-house
Engineers: can
offer technical
advice and
consider new
technologies
 In-house Market
Expertise: Can
assess and
structure for
Merchant Risk
 In-house
Regulatory
Expertise: Can
assess and
structure for
Regulatory Risk
 Government
Relations
 Neutral broker
Role
 World Bank
Synergies
 PCG
 MIGA
 Coordinated
approach
across WBG
services
• MIGA PRI
• IDA PCG
 Advice on
Environmental and
Social Best
Practices
 Equator Principles
Modeled after IFC
Standards
 Governance
 Private sector
perspective to
governments
 Introductions +
matchmaking
 Cross-border
support + Sector
knowledge
 Access to Donor
Funding/Con-
cessionary
Support
Coordination/Car-
bon Finance
 Programs to
assist client,
including: Local
Supplier
Development,
Corporate
Governance,
Community
Development
Funding

7. Renewable Energy Market Opportunities
1. IPPs granted by PIC Governments
― Samoa: number of tenders to IPPs for RE, particularly in solar. Plans to completely
replace its diesel generation capacity (~30MW).
― Fiji: GoF/Fiji Electricity Authority has committed to reaching 80% renewable energy
target in generation mix by 2020 (60% today).
― PNG: GoPNG/PNG Power, has called for EoIs from firms to operate renewable energy
power plants.
2. Sunergise
- Roof top solar solution based on 10-20 year PPAs with off takers. IFC invested US$2m equity.
Installed upto 1.3MW of solar systems in Fiji and expanding across the Pacific with 5 projects
underway (estimated project cost of US$7m - 4MW).
3. Qaliwana Upper Wailoa Hydro Project Fiji (44MW) (IFC Infraventures with
Hawkins Infrastructure NZ development stage).
4. Tina River Hydro (15MW) Solomon Is: IFC transaction advisor (PPP advisory).
5. RE Portfolio Risk Share Facility with Commercial Banks (US$50m) with supporting
technical assistance to developers/banks.

8. PADGO Sri Lanka
• IFC Investment/Advisory project from 2009-2015
• Risk-sharing facility for 2 banks, up to US$55 million RE portfolio
• Activities:
― IFC signed RSF agreements with 2 commercial banks to support the expansion of their RE loan
portfolios.
― A 50% portfolio risk guarantee was provided to encourage these banks to lend to the sector
― In parallel, IFC worked with the partner banks to provide advisory services to strengthen their
lending capacity for RE projects in the areas of credit review, financial modelling, risk
management, technical appraisal, project supervision etc.
― In addition, the project extended direct project development assistance on a needs basis to
project sponsors/developers to prepare bankable projects
• As at Q4 FY14, 10 mini-hydro and 3 wind projects had been financed:
― Capacity of RE projects assisted: 75MW
― Amount of RE generated through these projects: 150,000Mwh
― Value of financing provided by FIs to develop these projects: US$60 million
― Amount of GHG emission avoided: ~100,000MT of CO2

9. 8
IFC investments in Renewables
22