Renewable Energy at Norfund - Energi Norge
Renewable Energy at Norfund - Energi Norge
Renewable Energy at Norfund - Energi Norge
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<strong>Renewable</strong> <strong>Energy</strong> <strong>at</strong> <strong>Norfund</strong><br />
Næringslivets Bistandskonferanse<br />
2 February 2011
Investment areas<br />
<strong>Norfund</strong> invests in key sectors aimed <strong>at</strong> promoting economic growth in developing countries<br />
Financial<br />
Institutions<br />
• Cre<strong>at</strong>es financial services to unbanked and small entrepreneurs by investing in<br />
SME banks, funds, and microfinance<br />
• Partnership with Norwegian investors through the Norwegian Microfinance<br />
Initi<strong>at</strong>ive (NMI)<br />
SME Funds<br />
• Invest in SMEs through local ownership to build formal economy and strengthen<br />
local capital markets<br />
• Invest through priv<strong>at</strong>e equity funds or set up new where gaps are detected<br />
Industrial<br />
Partnerships<br />
• Provide risk capital to greenfield and high- risk projects with high development<br />
effect<br />
• Attract expertise and technology to Sub Saharan Africa<br />
• Identify high quality industrial partners and mobilise Norwegian business partners<br />
<strong>Renewable</strong><br />
<strong>Energy</strong><br />
• Building energy infrastructure because access to electricity is a precondition for<br />
economic growth<br />
• Set up companies with capabilities to build and oper<strong>at</strong>e<br />
• Mobilize Norwegian capital and expertise
Investment regions<br />
<strong>Norfund</strong> focuses on Southern and Eastern Africa, Central America and South East Asia<br />
India<br />
Philippines<br />
Sri Lanka<br />
Peru<br />
Brazil<br />
Bangkok, Thailand*<br />
Chile<br />
SN Power investment countries<br />
* Opening in 2011
Investment portfolio<br />
Almost 45% of <strong>Norfund</strong>’s portfolio is in renewable energy, which has earned 14% return*<br />
IRR<br />
in investment currency 2002 2003 2004 2005 2006 2007 2008 2009<br />
Average<br />
annual return<br />
<strong>Renewable</strong> <strong>Energy</strong> 0 % 17 % 1 % -3 % 44 % 14 % 25 % 3 % 14 %<br />
SME Funds -5 % -15 % -4 % 17 % 1 % 32 % 4 % 5 % 6 %<br />
Financial Institutions 19 % 4 % 18 % 10 % 9 % 27 % 9 % 6 % 10 %<br />
Industrial Partnerships -9 % -22 % -28 % 2 % -19 % 16 % 10 % 12 % -2 %<br />
Total -4 % 7 % -1 % 4 % 24 % 17 % 21 % 4 % 11 %<br />
* IRR over period 2002-2009.
<strong>Renewable</strong> <strong>Energy</strong> investment str<strong>at</strong>egy<br />
<strong>Norfund</strong>’s investment str<strong>at</strong>egy emphasizes strong partners and proven technologies<br />
• Technology<br />
– Commercially proven renewable energy technologies<br />
– Focus on power production, especially hydropower and wind<br />
– Will also consider solar and bio-energy investments<br />
• Instruments<br />
– Focus on equity / quasi-equity<br />
– In new countries & technologies, will consider debt<br />
– Will primarily use intermediaries to reach SMEs r<strong>at</strong>her than renewable investments<br />
• Geography<br />
– SN Power & SNPA: Within scope agreed in the respective companies’ business plans<br />
– Focus on East & Southern Africa, Central America, Nepal & Mekong<br />
– Co-financing with GIEK on a broader geographical basis<br />
• Partners<br />
– For large scale wind and hydropower invest with industrial partners*<br />
– Will seek suitable partners for small scale hydro, building on current partnerships<br />
– For bio-energy, select in accordance with general approaches to direct investments<br />
* Subject to non-compete in shareholders agreements
Investments in <strong>Renewable</strong> <strong>Energy</strong><br />
2100 MNOK 120 MNOK 42 MNOK 42 MNOK<br />
33 MNOK<br />
A f r i C A<br />
CHILE<br />
La Higuera<br />
La Confluencia<br />
Colmito<br />
Totoral<br />
Trayenko<br />
Africa<br />
Wind & hydro<br />
Central America<br />
Wind & hydro<br />
UGANDA<br />
Bugoye<br />
Other small hydro<br />
Central<br />
America/ Africa<br />
SMEs in clean<br />
energy services<br />
East Africa<br />
Small scale solar<br />
energy devices<br />
PERU<br />
Cahua<br />
Electroandes<br />
Cheves<br />
FUND INVESTMENTS<br />
INDIA<br />
Malana<br />
Allain Duhangan<br />
Bara Bhangal<br />
NEPAL<br />
Khimti<br />
Kirne<br />
Tamakoshi<br />
40 MNOK<br />
Global<br />
Syndic<strong>at</strong>ion tool for<br />
clim<strong>at</strong>e change<br />
mitig<strong>at</strong>ion<br />
investments<br />
35 MNOK<br />
Southern Africa<br />
SMEs in clean<br />
technology, incl<br />
renewables &<br />
energy efficiency<br />
13.4 MNOK<br />
Investment fund Country Technology<br />
CASEIF II Nicaragua Solar<br />
European Financing Partners SA Kenya Geothermal and other<br />
China Environment Fund 2004 China Solar and other<br />
APIDC Biotech Fund India Biodiesel<br />
Other fund investments -- --<br />
PHILIPPINES<br />
Mag<strong>at</strong><br />
Binga<br />
Ambuklao<br />
Figures shown are approved amounts as of year-end 2009<br />
09.02.2011 5
New investment – Tough Stuff<br />
<strong>Norfund</strong> recently approved a USD 5.5 million investment in ToughStuff<br />
• “Triple bottom line” social enterprise which provides affordable<br />
solar-powered products for low income people, replacing<br />
expensive and environmentally damaging kerosene lamps,<br />
candles and b<strong>at</strong>teries<br />
• Offers range of high performance, durable and affordable solar<br />
energy solutions to three main power needs of poor consumers<br />
in developing countries: lighting, mobile phones and radios<br />
• Goals by 2015:<br />
– Reach 35 mn people, mainly in Eastern and Southern Africa<br />
– Save poor people in developing countries USD 2.2 bn in<br />
avoided energy costs<br />
– Cre<strong>at</strong>e over 10,000 jobs <strong>at</strong> above n<strong>at</strong>ional average wage<br />
through microentrepreneur program<br />
– Save 1.7 mn tonnes of CO2
New investment – Interact Clim<strong>at</strong>e Change Fund<br />
<strong>Norfund</strong> recently committed EUR 5 million to the Interact Clim<strong>at</strong>e Change Fund<br />
• ICCF is a new initi<strong>at</strong>ive to establish a facility<br />
involving the European Development Finance<br />
Institutions (DFIs), French Development Agency<br />
(AfD) and European Investment Bank (EIB)<br />
– Syndic<strong>at</strong>ion tool among DFIs<br />
– Will target clim<strong>at</strong>e change mitig<strong>at</strong>ion projects,<br />
such as renewable energy production<br />
• Co-investors will be most of the EDFI members in<br />
addition to AfD and EIB<br />
• Size is €300 million <strong>at</strong> closing<br />
– To be invested in clim<strong>at</strong>e rel<strong>at</strong>ed projects<br />
developed by the priv<strong>at</strong>e sector in developing<br />
countries<br />
• Expected to be oper<strong>at</strong>ional by mid-2010
Norwegian <strong>Renewable</strong> <strong>Energy</strong> Partnership<br />
New initi<strong>at</strong>ive led by <strong>Norfund</strong> to promote clean energy investment in developing countries<br />
• the Norwegian Government has double its budget for clean energy to NOK 1.6<br />
billion, including NOK 425 million to <strong>Norfund</strong> in 2011<br />
• Investment r<strong>at</strong>ionale:<br />
– Economic growth will continue to drive energy demand in emerging<br />
economies which often face widespread shortages of electricity*<br />
– Many emerging economies have underutilized resources such as hydropower<br />
th<strong>at</strong> can be harnessed to meet growing energy requirements<br />
– Norwegian partners are well positioned to help meet these energy needs by<br />
offering expertise in renewable energy<br />
• <strong>Norfund</strong>’s activities includes:<br />
– Project Development Facility to promote project development and prepar<strong>at</strong>ion<br />
– GIEK cooper<strong>at</strong>ion on debt financing and may include new investment regions<br />
– Co-investment with industrial investors<br />
– Co-financing with financial investors
Project Development Facility<br />
<strong>Norfund</strong> has established a new Facility to promote development of new projects<br />
• New facility allows <strong>Norfund</strong> to invest in renewable energy projects earlier in the<br />
process and increase the number of investments available<br />
• <strong>Norfund</strong> and Norad will collabor<strong>at</strong>e in decision-making for Facility investments
Debt financing<br />
<strong>Norfund</strong> is able to support debt financing across a broader geography<br />
• <strong>Norfund</strong> is able to co-finance with GIEK to structure debt package for renewable<br />
energy projects<br />
• Norwegian and other Nordic banks have already made a substantial<br />
commitment to SN Power’s portfolio<br />
Debt in SNPI portfolio<br />
MNOK
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