benefits of low cost financing on csp projects

8/6/2019 Benefits of Low Cost Financing on CSP Projects

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Benefits of Low Cost Financing onCSP Projects ADBs Analysis

.Asian Development Bank

Beijing, 9 June2010


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The views expressed in this presentation are theviews of the Asian Development Bank (ADB) staff

policies of the ADB, its Board of Director or the

Governments they represent.


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Good resources mainl inwestern provinces - Gansu,Qinghai, Xinjiang, IMAR,Tibet

Cost of CO2 abatementabout 1/3rd of the solar PV

Diversification of energy mix

Reliable power supply andinherent stora e i.e. whenneeded - any time of theday and night. 12th FYP targets 5 GW solar power

in the CSP value chain.&

job creation potential

CSP projects. (renewable energyshare in the energy mix [11.4%])


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Combination of Storage andHybridization in a Solar Plant

Source: IEA


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Good resources mainl inwestern provinces - Gansu,Qinghai, Xinjiang, IMAR,Tibet

Cost of CO2 abatementabout 1/3rd of the solar PV

Diversification of energy mix

Reliable power supply andinherent stora e i.e. when

needed - any time of theday and night. 12th FYP targets 5 GW solar power

in the CSP value chain.&

job creation potential

CSP projects. (renewable energy

share in the energy mix [11.4%])


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Source: A.T. Kearney

o a renewable technologies throughdemonstration projects


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Considerable Tariff reduction can be materialized after 2012


Cost of financing would play a catalytic role in reducing

generation cost


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Fossil fuel plants: the risk of significant fuel pricevariation during the concession period (25 30yrs)

Solar power plants:

No fuel costs during the lifespan (less uncertainty) Fuel cost through capital investment at the

beginning of the project

The cost of power from solar power projects isparticularly sensitive to financing conditions (interest


.


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Debt Equity

Liquidity is reduced within all banks

-

Reluctant to invest

Cost of lending rose substantially

Reduced volumes of financing

financing, with lower Leverage &higher rates.

Reduced tenors: from 15yrs to 7-10yrs

New players & technologies found

Public source of financing has had a very important


renewe ro e n renewa e energy nanc ng


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y n n n

ADB Domestic

Interest rate 3.26% 6.60%

RepaymentPeriod

20 15

GracePeriod

3 0

Deb/ Equity 80 / 20

of financing. It can lower the required tariff by 22%for the same return (ROE: 10%)


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High leverage" and low risks with lower rate

performance but also providing valuable insight into

challenges, and risks thereby assisting provincial andnational governments in formulating practical policiesand programs.

ADB even provides up-front financing of CDMtransaction costs


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Asian Solar Energy Initiative: targeting to assist theidentification, development and implementation of, o so ar power n t e s a ac c reg on

over the next 3 years

ADB has gained insight into challenges and risksthrough an ongoing TA ($1 M) and 1 MW pilot project

Financing to 50MW Jinta CSP project: up to $120 M


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CSP will become new alternative drivers forsustainable development along with other renewableenergy resources.

CSP project is highly sensitive to low-cost andfavorable financing conditions

Early demonstration through low-cost ADB loan can


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n y u y u n n n

Further Information:

.

Young Professional (Energy)

Asian Development BankTel (632) 683 1803

Fax (632) 636 2302

benefits of low cost financing on csp projects

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