SEYCHELLES LEASING
INVESTMENT FORUM “Unlocking access to finance, investment and economic
growth through leasing for MSMEs”
12-13 APRIL 2017
Savoy Resort - Mahé, Seychelles
Welcome back to…
Seychelles Leasing Investment Forum
12-13 April 2017 Mahé, Seychelles
Seychelles Leasing Investment Forum
12-13 April 2017 Mahé, Seychelles
Coming up… Session 4
09:15 – 11:00 Doing Business in Seychelles,
Opportunities and Challenges Overcoming challenges for investors and businesses: growing the leasing
market and partnerships for skills development
Alejandro Alvarez de la Campa, Manager, Finance and Markets,
Africa, IFC
Making leasing attractive in Seychelles: incentives for lessors, lessees,
suppliers and government in making businesses attractive for leasing
Kailash S. Ramnauth (Satyam), Country Manager for Comoros,
Madagascar, Mauritius and Seychelles, IFC
Opportunities and challenges for leasing
Dr. Steve Fanny, Principal Secretary, Department of Investment &
Industries
The Sri Lankan experience
Chandika Hettiarachchi, International Leasing Expert & Trainer (Sri
Lanka)
Moderator: Pamela Charlette, Principal Secretary, Entrepreneurship
Development & Business Innovation
PANEL DISCUSSION
Seychelles Leasing Investment Forum
12-13 April 2017 Mahé, Seychelles
Seychelles Leasing Investment Forum
12-13 April 2017 Mahé, Seychelles
Coming up… Session 5
11:15 – 13:00 Resources for the Way Forward
Adopting best practice models to make leasing work in the
Seychelles: Global leasing toolkit Jonathan Gigin, Program Manager, Africa Leasing Facility, IFC
Long term financing for leasing: the venture capital option Olivier Deiters, Investment Officer, Triple Jump B.V. (Kenya)
Agrileasing and microleasing Coy Buckley, CEO and Managing Director, EFTA (Tanzania)
Gilbert Port Louis, Principal Officer, Agricultural Extension Services
from Seychelles Agricultural Agency (SAA)
Financing renewable leasing equipment Tibor Kludovacz, Industry Specialist, Climate Business, IFC
Errol Renaud, Principal Officer, Tariffs and Economic Affairs Unit,
Seychelles Energy Commission
Moderator: Bertrand Belle, Economic Advisor the President of the
Republic of Seychelles
PANEL DISCUSSION
Seychelles Leasing Investment Forum
12-13 April 2017 Mahé, Seychelles
CONCLUDING REMARKS JENIFER SULLIVAN
SECOND DEPUTY GOVERNOR,
CENTRAL BANK OF SEYCHELLES
Seychelles Leasing Investment Forum
12-13 April 2017 Mahé, Seychelles
THANK YOU.
NB: A link for all slide presentations will be
shared with you after the Forum via email.
Kindly ensure you have noted your email
address during registration.
ALEJANDRO ALVAREZ DE LA CAMPA
IFC MANAGER, FINANCE AND MARKETS, AFRICA
OVERCOMING CHALLENGES FOR
INVESTORS AND BUSINESSES: GROWING THE LEASING MARKET AND PARTNERSHIPS
FOR SKILLS DEVELOPMENT
Seychelles Leasing Investment Forum 12-13 APRIL 2017 Mahé, Seychelles
Seychelles Leasing Investment Forum
12-13 April 2017 Mahé, Seychelles
Photo credit: Romano Laurence, Seychelles News Agency
TABLE OF CONTENTS
Challenges to investing in
the leasing sector:
Lack of awareness
and assessing
demand
Determining best
market approach
Dependency on easy
access to cash
Challenges for local
businesses interested in
leasing
Increasing
awareness
Incentives for growing the
leasing sector
Partnerships for skills
development
Seychelles Leasing Investment Forum
12-13 April 2017 Mahé, Seychelles
CHALLENGES TO INVESTING IN THE LEASING SECTOR
Lack of awareness and assessing demand
Although leasing is normally the favoured option (especially within the
SME sector) for asset acquisition, if the potential customer base is
unaware of the features and benefits of leasing, then there will be no
demand
Potential lessors must invest in creating awareness of the leasing
product by creating a marketing campaign that is focused on the
business sectors in which the lessors would like to operate
Seychelles Leasing Investment Forum
12-13 April 2017 Mahé, Seychelles
CHALLENGES TO INVESTING IN THE LEASING SECTOR
Determining the best market approach
Emphasizing the simplicity of financial leasing
Determining if it should be sold as a banking product or as a stand-alone
leasing company
Both approaches work but it is good to note that the largest non-
vendor leasing companies in the world are all subsidiaries of banks.
Seychelles Leasing Investment Forum
12-13 April 2017 Mahé, Seychelles
CHALLENGES TO INVESTING IN THE LEASING SECTOR
The leasing business is dependant upon easy access to cash to acquire
assets.
Common refinancing challenges and questions:
Can a bank provide all of its leasing subsidiaries’ needs?
Can leasing be offered in hard currency?
Are there local sources of local currency funding?
Are there any thin capitalisation issues?
Is there a minimum capital requirement?
Is it sensible?
Tax challenges and questions to consider:
Is there corporation tax?
Is there fiscal depreciation?
Is there special VAT treatment?
Can it be offset?
Can it be reclaimed?
Seychelles Leasing Investment Forum
12-13 April 2017 Mahé, Seychelles
CHALLENGES FOR LOCAL BUSINESSES INTERESTED IN LEASING
Understanding the leasing product
Raising awareness for potential lessees
Building capacity of lessors
Increasing the knowledge base for accountants and fiscal authorities
Common questions surrounding:
VAT treatment
Required credit information potential lessee must supply to lessor
Policy with respect to down payments to lessor
Types of assets most suitable for leasing
Seychelles Leasing Investment Forum
12-13 April 2017 Mahé, Seychelles
GROWING THE LEASING SECTOR
Incentives
Leasing provides access to finance for businesses that have little collateral
to pledge.
The leased asset provides the security required by the lessor as (s)he is the
legal owner of the asset.
A vibrant leasing sector helps grow the economy.
Seychelles Leasing Investment Forum
12-13 April 2017 Mahé, Seychelles
PARTNERSHIPS FOR SKILLS DEVELOPMENT
Partnership is key to understanding industry best practices and building capacity
necessary to create a flourishing local leasing market.
Lessors benefit from gaining exposure to established leasing companies in
other parts of the world.
Experienced “local” leasing consultants provide assistance using local
knowledge.
International consultants provide assistance using knowledge gained and
used worldwide.
IFC shares global best practices.
External investors bring their knowledge and experiences.
Equipment and vehicle vendors know that every purchasing decision is a
financing decision, so they also have experience to share.
Seychelles Leasing Investment Forum
12-13 April 2017 Mahé, Seychelles
Photo credit: Joe Laurence, Seychelles News Agency
CONTACT INFORMATION
Alejandro Alvarez de la
Campa
IFC Manager, Finance and
Markets, Africa
KAILASH SHARMA RAMNAUTH
IFC COUNTRY MANAGER FOR COMOROS,
MADAGASCAR, MAURITIUS AND SEYCHELLES
MAKING LEASING ATTRACTIVE
IN SEYCHELLES: INCENTIVES FOR LESSORS, LESSEES, SUPPLIERS AND
GOVERNMENT
Seychelles Leasing Investment Forum 12-13 APRIL 2017 Mahé, Seychelles
Seychelles Leasing Investment Forum
12-13 April 2017 Mahé, Seychelles
Photo credit: Romano Laurence, Seychelles News Agency
TABLE OF CONTENTS
Making leasing attractive in
Seychelles
Incentives for lessors
Incentives for lessees
Incentives/key
requirements for
suppliers
Incentives/benefits for
government
Seychelles Leasing Investment Forum
12-13 April 2017 Mahé, Seychelles
MAKING LEASING ATTRACTIVE IN SEYCHELLES: A HOLISTIC APPROACH
A holistic approach which considers all involved parties:
Lessor
Lessee
Supplier
Government
Seychelles Leasing Investment Forum
12-13 April 2017 Mahé, Seychelles
INCENTIVES FOR LESSORS
Given the underlying goal is the ability to make a profit, or incremental profit,
lessors benefit from:
Fair tax treatment
Sensible, if any, thin capitalisation rules
Full recovery (i.e. not offset) of net input VAT
A safe environment in which to operate, including:
Access to reliable credit information
Understandable tax environment
Sensible (IAS) accounting requirements
Access to trained staff
Enabling legal environment
Sound leasing law, including recognition of legal ownership of
asset
Quick court procedures (in event of repossession)
Sensible regulatory environment
Minimal supervision (recognising that lessors are non deposit
takers)
Sensible reporting requirements
Sensible licence requirements
Sensible (if any) MCR
Trained supervisors
Seychelles Leasing Investment Forum
12-13 April 2017 Mahé, Seychelles
INCENTIVES FOR LESSEES
Lessees benefit most from:
Simplified tax rules
Corporation tax treatment
VAT treatment
Recognition of user and possession rights
Sound leasing law
Quick service from lessors
Quick credit decisions
Quick payout of supplier invoices
Easy documentation
Competitive pricing
No additional collateral requirements
Sensible down payment policies
Fast, simple, low-cost court system in the event of dispute with lessor
Seychelles Leasing Investment Forum
12-13 April 2017 Mahé, Seychelles
INCENTIVES/KEY REQUIREMENTS FOR SUPPLIERS
Suppliers benefit most from:
Availability of point-of-sale (POS) finance
Finance facilities that may be offered at point-of-sale either by supplier’s
staff or dedicated personnel from the lessor
Easy leasing documentation
Availability of wholesale finance
Financing provided by lessor to supplier (similar to an overdraft facility)
that is used by the supplier to buy stock from the distributor
Finance training for all sales staff provided free of charge by lessor
Simple tax treatment of leases for lessee, which makes product easier to sell
Good POS marketing materials
Seychelles Leasing Investment Forum
12-13 April 2017 Mahé, Seychelles
INCENTIVES/BENEFITS FOR GOVERNMENT
Government benefits most from:
Increased tax revenue from an improved economy benefiting from a vibrant
leasing sector
Reduced unemployment
Developed MSME sector with access to finance, which is not dependant upon
collateral
Seychelles Leasing Investment Forum
12-13 April 2017 Mahé, Seychelles
Photo credit: Joe Laurence, Seychelles News Agency
CONTACT INFORMATION
Kailash Sharma Ramnauth,
IFC Country Manager for
Madagascar, Mauritius and
Seychelles
© CHANDIKA HETTIARACHCHI
Seychelles Leasing Investment Forum 12-13 APRIL 2017 Mahé, Seychelles
Seychelles Leasing Investment Forum
12-13 April 2017 Mahé, Seychelles
Seychelles Leasing Investment Forum
12-13 April 2017 Mahé, Seychelles
SRI LANKA AND THE LEASING MARKET
• Leasing was 1st introduced to Sri Lanka in the early 80s
• Partnership between IFC, Orix Leasing Japan and Lanka Orix Leasing
Company.
• Before the 80’s Hire-purchase was the only mode of financing assets.
• Population - 20 Million
- 25,500 SQR Miles
• Leasing Volumes - $ 1.6 Billion (2016)
• Leasing Providers - 64 - 47
• Micro Leasing - 50% (No of Cont.)
• 70% of the leases are granted to the rural areas.
Seychelles Leasing Investment Forum
12-13 April 2017 Mahé, Seychelles
SRI LANKA AND THE LEASING MARKET
• The IFC initially approached banks, and they were very slow to react
• Formed a leasing company
• Few NBFIs, followed
• Banks were still reluctant to offer leasing
• The NBFIs were thriving on leasing business
• Since banks were not offering leasing, they started loosing their clients to the
NBFIs
• Banks started to offer leasing purely to retain their clientele
• Banks realized the opportunity in leasing and started offering leasing to the
bankable (A grade) clientele aggressively.
Seychelles Leasing Investment Forum
12-13 April 2017 Mahé, Seychelles
SRI LANKA AND THE LEASING MARKET
• Increased competition and the NBFIs were compelled to target the 2nd tier (B
Grade Clientele)
• Increased competition among the B grade clientele as banks decided to get
in to the this segment
• NBFIs were compelled to target the MSME sector (Increased access to
finance)
• There was no leasing act from the inception in early 80s to 2000, until the
leasing act was enacted in the year 2000
• Before the introduction of leasing, asset financing was done through hire
purchase, hence repossession was practiced
• Unfortunately Leasing of equipment has been minimum throughout the last
30 years
Seychelles Leasing Investment Forum
12-13 April 2017 Mahé, Seychelles
• Main reason being the non availability of an movable asset registry, financial
interest of motor vehicles were registered at the registrar of motor vehicles.
• 95% of the assets financed were motor vehicles
• The major driving factor for financial institutions was that the capital allowance
benefit was given to the lessor instead of the lessee. This motivated the financial
institutions to grow the leasing portfolio.
• As per IAS 17, the general accepted principle is that the capital allowance is
given to the lessee.
• The capital allowance factor incentivized the financial institutions to take
additional risk by going in to new client segments to grow the lease portfolio.
• This fueled the growth of the leasing industry and increase access to finance at
MSME levels.
Footer
SRI LANKA AND THE LEASING MARKET
Seychelles Leasing Investment Forum
12-13 April 2017 Mahé, Seychelles Footer
ACCOUNTING AND TAX (LESSEE CLAIMS CA)
Lessor – Finance Lease
Interest is recognized as income
Cost is shown as an asset (lease stock)
Capital repayments are deducted from lease stock
Net interest income is recognized as income for taxation
Lessor – Operating Lease
Rental is
treated as income. Annual depreciation is charged.
Capitalized and depreciated
Rental is
treated as
income.
Depreciation is
an allowable
charge.
P & L Balance Sheet Tax
ACCOUNTING AND TAX (LESSOR CLAIMS CA)
Lessor – Finance Lease
Interest is recognized as income
Cost is shown as an asset (lease stock)
Capital repayments are deducted from lease stock
Rental income is assessed as income for taxation.
Depreciation is
an allowable
charge
Lessor – Operating Lease
Rental is
treated as income. Annual depreciation is charged.
Capitalized and depreciated
Rental is
treated as
income.
Depreciation is
an allowable
charge.
P & L Balance Sheet Tax
TAX LESSEE CLAIMS CA
Period Year 1 Year 2 Year 3 Year 4
Interest Income
146,189
112,787
73,630
27,728
Interest Cost
90,369
67,962
43,209
15,864
Net Interest
Income
55,820
44,825
30,421
11,864
Total Taxable Income
(4 Years)
142,929
TAX – LESSOR CLAIMS CA
Period Year 1 Year 2 Year 3 Year 4
Rental Income
340,083
340,083
340,083
340,083
Capital
Allowance (25%)
(250,000)
(250,000)
(250,000)
(250,000)
Interest Cost
(90,369)
(67,962)
(43,209)
(15,864)
Taxable Income
(285)
22,121
46,874
74,219
Total Taxable Income
(4 Years)
142,929
MICRO LEASING - SUCCESS
• Move away from traditional way of evaluating credit • Acceptable products (Equipment) • Good 2nd hand market • Affordable and economical • Competition • Taking leasing to the door step • MIS and recoveries
• Non performing leases – Big ticket leases 5.1% Micro leases 1.9%
Seychelles Leasing Investment Forum
12-13 April 2017 Mahé, Seychelles
Photo credit: Joe Laurence, Seychelles News Agency
CONTACT INFORMATION
Chandika Hettiarachchi
General Manager – Marketing & Product Development
Central Finance Co. PLC
Colombo 2
Sri Lanka
International Leasing Expert and Trainer
Email – [email protected]
Phone - +94777698664
+94775783313
JONATHAN GIGIN
SENIOR FINANCIAL SECTOR SPECIALIST
FINANCE & MARKETS – WORLD BANK GROUP
ADAPTING BEST PRACTICES MODEL
TO MAKE LEASING WORK IN
SEYCHELLES
GLOBAL LEASING TOOLKIT:
A STRATEGIC TOOL FOR LESSORS
Seychelles Leasing Investment Forum 12-13 APRIL 2017 Mahé, Seychelles
Seychelles Leasing Investment Forum
12-13 April 2017 Mahé, Seychelles
A 40 Year Commitment to Leasing
A Core Component of WBG’s Financial Markets Strategy
Increase access to financing to small & medium businesses
Broaden the range of financial services available in EMs
A Historic Focus Area
Financed 239 leasing projects in 60 countries for $1.62 billion
over 40 years
IFC has participated in the set-up of the first leasing company in
30 countries
Set-up or improved leasing regulations in 96 countries
IFC has operated 60 leasing advisory projects across the globe
with $30 million of its own funding leveraged with donor funding.
Legal & regulatory support, market research, institution building,
public awareness, promotion of local and foreign investment
Seychelles Leasing Investment Forum
12-13 April 2017 Mahé, Seychelles
Strategic Focus
Support WBG/Global Strategic Priorities
IDA Focus, frontier/post conflict Markets
Climate change agenda through sustainable energy financing
Global food crisis agenda through agri-business financing, etc.
Develop Sustainable Financing Products
Micro, Small and Medium Enterprise financing
Energy efficiency, clean production and renewable energy lines of
credit
Agriculture equipment financing,
Islamic Finance, gender, etc.
Seychelles Leasing Investment Forum
12-13 April 2017 Mahé, Seychelles
Global Leasing Toolkit
A comprehensive working manual to
provide a practical guide to manage
and operate a leasing entity targeting
the SME market
Universally accepted principles and best
practices
Targeted at bank and non-bank financial
institutions
MFIs, equipment vendors, private equity inst.
Draws on IFC’s 35 years of experience
supporting equipment leasing entities
in emerging markets
Team of experienced IFC staff, diverse
backgrounds and regions
Practical experience of external leasing
professionals
A practical guide to entities engaging
in the SME equipment leasing business
Seychelles Leasing Investment Forum
12-13 April 2017 Mahé, Seychelles
Why the Global Leasing Toolkit?
Core Component of IFCs FM Strategy Increase SMEs access to finance
Broaden range of financial services in emerging markets
SME business development, build profitable SME leasing portfolio
Term financing, unique structure to help SMEs invest in income
generating assets
Flexible unsecured financing, does not require additional collateral nor
lien arrangements
Cash-flow financing, credit methodology focused on cash-flow
generation capability of asset
Support real sectors, strategic priority areas such as the food security
and climate change agendas
Seychelles Leasing Investment Forum
12-13 April 2017 Mahé, Seychelles
Why the Global Leasing Toolkit II?
Four Emerging Market Needs 1. Improved financing availability
Availability, term structure, price
2. Information about the benefits of leasing
SMEs unaware/do not understand benefits
Limited ability of FIs to explain benefits of leasing to SMEs
3. Industry constantly evolving in response to new market opportunities in
emerging markets
Agricultural equipment leasing
Sustainable energy equipment leasing
Islamic finance
4. Need to adapt to local conditions
How principles and best practices are applied in different regulatory and
supervisory regimes in use around the world
Seychelles Leasing Investment Forum
12-13 April 2017 Mahé, Seychelles
The “Life Cycle” Concept
Life Cycle of a Leasing Entity Life Cycle of a Leasing Transaction
Inception
Capital
/Funding
Initial
Organization
Start-Up
Operations
Origination
Credit Evaluation
Processing Closing
Servicing
Seychelles Leasing Investment Forum
12-13 April 2017 Mahé, Seychelles
Practical Tools and Case Studies
Over 80 practical case
studies and examples
applicable to emerging
markets
Funding
Marketing and Sales
Lease Mathematics
Risk Management and Credit
Insurance
Lease and Leasing Entity
Accounting
Information Technology (IT)
Lease Pricing Tools
Sample Lease Documents
Policies & Procedures Manual
Available on interactive CD Rom
Case Study: Rift Valley Manufacturing—Kenya
Rift Valley Manufacturing in Kenya wants to lease production equipment,
including lathes, drill presses, and other machine tools. The equipment cost is
$100,000. The lessor determines that the auction value of this equipment at
the end of the first year of the lease will be 60 percent of the original price; at
the end of the second year it will be 40 percent, and at the end of the third
year it will be 20 percent.
Lesson Learned. For the lessor, the first 12 months of the lease term presents
the highest level of risk. The net lease balance is high, and the equipment
depreciates rapidly. To be conservative, the lessor will consider the equipment
to be worth 60 percent of original cost at the beginning of the lease, thus
reducing the lessors exposure to $40,000. The lessor may feel the lessee has
enough resources to protect the lessor against the loss of $40,000, but if the
lessee’s credit is poor the lessor will ask for additional collateral in the form of
a security deposit, a security interest in some other equipment owned by the
lessee, or even a cash down payment.
If the lessor is owned by the manufacturer of the equipment, it may consider
its exposure to be based on the wholesale cost, not the retail price. If that is
the case, the only risk is the manufacturing profit, and the lessor may be
willing to provide the lease to a company that has a poor credit rating without
additional collateral. Some collateral lessors make it a policy to require
additional support with every transaction, most commonly two times the cost of
the new equipment.
Seychelles Leasing Investment Forum
12-13 April 2017 Mahé, Seychelles
BASE TOOLKIT
Creating & Operating a Leasing Entity
Funding a Leasing Entity & Funding a Lease Transaction
Lease Production
Marketing & sales
Leasing mathematics
Lease Processing
Credit & risk management
Documentation, insurance & monitoring
Lease Entity Operations
Accounting & information technology
Seychelles Leasing Investment Forum
12-13 April 2017 Mahé, Seychelles
The Focused Toolkits (FTKs)
Four Focused Toolkits
Practical information on three specialty
markets expected to account for major
leasing industry growth in EMs
Agricultural equipment leasing
Sustainable energy equipment
leasing
Islamic finance
The 4th Focused Toolkit
Leasing under various legal systems
and regulatory & supervisory regimes
FTKs not designed to be used as stand
alone toolkits
Principles and best practices discussed in
base toolkit applied to each FTK
Base toolkit sets out fundamental
techniques and methods
Seychelles Leasing Investment Forum
12-13 April 2017 Mahé, Seychelles
Agricultural Leasing Focused Toolkit (FTK)
Farmers obtain equipment to improve productivity, reduce waste, and
adopt sustainable methods
Variety of specialized approaches applicable to Agri-leasing
Draws on general principles governing leasing
Equipment Used by Farmers and entire Value Chain
Agricultural Leasing and Conventional leasing
Lease Types & Structures Common to Agri Equipment
Pricing Calculations for Agri Leases
Agricultural Credit and Underwriting Considerations in EMs
Documentation of Agricultural leases
Role of Insurance in Agri Leasing
Leasing Irrigation Equipment
Seychelles Leasing Investment Forum
12-13 April 2017 Mahé, Seychelles
Beneficiaries - Global Leasing Toolkit
Cover All Aspects of Leasing Operations
Potential Beneficiaries include All Stakeholders: Leasing Professionals
Financial Institutions considering entering the leasing industry
Equipment Supplies interested in offering leasing to facilitate equipment
acquisition
Regulators and Supervisors
Development Banks
Seychelles Leasing Investment Forum
12-13 April 2017 Mahé, Seychelles
Conclusion
Toolkit is best if used to complement range of investment and
advisory services provided by IFC.
Leasing is an effective tool to support investments in productive
real sectors e.g. agribusiness equipment across the value chain,
infrastructure, sustainable energy finance, etc.
Play a key role in increasing access to finance for SMEs/ rural areas
Leasing will continue to play an integral role in IFCs strategy given
the significant potential in financial and economic development,
private sector growth.
Seychelles Leasing Investment Forum
12-13 April 2017 Mahé, Seychelles
Photo credit: Joe Laurence, Seychelles News Agency
Jonathan Gigin
Africa Leasing Facility II,
Dakar – Senegal
Email: [email protected]
OLIVIER DEITERS
TRIPLE JUMP
(LONG TERM) FINANCING FOR LEASING
Seychelles Leasing Investment Forum 12-13 APRIL 2017 Mahé, Seychelles
Founded by ASN Bank, the largest Dutch
ethical bank and Oxfam Novib and
Company management
Our vision: “Triple Jump envisions that a
responsible and inclusive financial
sector will enable people to unlock their
potential and improve quality of life”
Current shareholders: 23% ASN Bank,
23% Oxfam Novib, 23% NOTS Impact
Enterprises, 31% owned by TJ Staff
Strong regional presence: 70+ staff based
in Europe, Latin America, Africa and Asia
Triple Jump at a glance
Total AuM of EUR 675 million, 152 investee
companies in more than 60 countries
Several mandates and Investment Funds
under management (Open ended, LCY
possible)
Robust investment track-record (10 yr)
Expertise in investing in FI’s, Leasing
companies and SME’s
Technical Assistance program
Mandates, Funds, Track record
2
Triple Jump at a Glance
3
Development Triple Jump portfolio in AuM
2012 2013 2014 2015 2016
AUM EUR
322M
EUR
339M
EUR
475M
EUR
515M
EUR
675
Number of investees 177 163 168 149 152
Average exposure per investee EUR
1.6M
EUR
1.6M
EUR
1.6M
EUR
2M
EUR
3M
284 307 322 339 475 515
675
0
100
200
300
400
500
600
700
800
2010 2011 2012 2013 2014 2015 2016
AuM, in EUR million
Seychelles Leasing Investment Forum
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Our Regional Presence
Seychelles Leasing Investment Forum
12-13 April 2017 Mahé, Seychelles
Our Investment Solutions
– ASN-Novib Fund Supports Finance institutions (FIs) in developing countries by providing equity/loans to
FIs that focus on underserved Micro/SME markets
– Dutch Good Growth Fund (DGGF) Financing local small and medium-sized enterprises(SMEs) in up to 68 countries
through investing in Intermediary Funds or directly in FI’s
– Oxfam-Novib mandate Supports high potential and high impact financial service providers (FSPs) in
developing countries that focus on underserved markets and target specific groups
(for example: rural communities and women borrowers)
– MicroBuild Fund Supplies debt capital to financial service providers that specifically offer housing
solutions to low-income end-clients
– Triple Jump Innovation Fund Provides loans to FSPs that offer rural and agricultural finance, operate in difficult
countries and/or offer innovative products & services to those at the Base of the
Pyramid
Investments Triple Jump – Take Aways
• Investment: Banks and Non-Bank FIs
• Structured: debt, subdebt, equity or guarantee
• Flexibility: Local currency, different tranches & term (Equity: ~5-7 yrs, Debt: along lease term)
• Range: from typically from 1M-10M EUR (Equity 3-7 M)
• Debt Exposure: ~20% of total lease book portfolio
• Equity Stake: 15%-30%
• With the different funds’ mandate: invest different stages of FIs - from early stage (with a view to
becoming profitable) to (more) mature FIs
• Aligned vision to sustainably serve underserved markets (eg Micro/SME)
Investments Triple Jump – Take Aways (2)
What are our investments in Africa and Leasing Companies?
Currently 39 investee companies in Africa, spread over +20 countries
Currently 4 investee Leasing companies: Georgia, Sri Lanka and Costa Rica (2)
Discussions (at different stages) are ongoing with Leasing Companies in Africa
What are the challenges Leasing Co’s face in raising funding?
In need of local currency financing facilities
Pricing not comparable to FIs (not leasing), often higher for leasing companies.
Leasing Companies do not have a local deposit base
Lenders to traditional MFIs/FIs are developing experience in lending to leasing
companies
Pool of available capital is small, but growing
Funding Challenges - Leasing Companies
Do Impact Investors have appetite to invest in Leasing COs? YES
Funds under management are growing
Many are looking to diversify their investment portfolio (traditionnaly more
geared towards Micro/SME Banks)
Impact in investing in a (equipment) leasing company focused on MSME, is
undeniable
… there might also be some challenges though:
Impact Investors Appetite
Leasing industry - nascent: leasing in many countries in Africa is characterized by
absence of favorable operating environment since the taxation, regulation and legal
regimes might not yet be adapted to the sector’s requirements
Leasing Companies, sometimes:
- are still underdeveloped organizations;
- mainly target only one sector;
- have not reached a certain scale to be investable.
• New segment: leasing segment is still a relatively new segment for many Impact
Investors – small track record built
Main challenges Impact Investors See
Demand and supply is there! But some steps need to be taken.
Leasing industry and Impact Investment Industry need to better connect and further
get to know each other
Platforms: Annual Leasing & Investor conferences would be a great platform
Impact Investors need to better understand Leasing and Leasing COs, so that they
(together with the other stakeholders) can actually support Leasing COs and
enhance the Leasing Industry
Conclusion
Triple Jump’s Role
Triple Jump wants and can play a role in supporting the Leasing Industry in Africa, by
partnering with Leasing Companies:
Regional presence
Experience in investing in Leasing Companies
Flexibility
Finance with different funds through the full graduation process
DGGF Fund: the catalyzer for (early stage) Leasing Companies (operating in a
nascent Leasing industry)!
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Photo credit: Joe Laurence, Seychelles News Agency
Olivier Deiters
Triple Jump
Thank you!
COY BUCKLEY – CEO, EFTA
LEASING FOR AGRICULTURE AND
SMES
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EFTA is a financial leasing company focused on small
businesses and farmers
• Loan sizes range from $10k-50k
• Received USD 1.4M Capacity
Development Grant from G-20
(managed by IFC) in 2012 to invest in
infrastructure and software
• First-mover in financial leasing
market for SMEs in Tanzania
• Partnered with over 50 equipment
suppliers
• Nation-wide branch network in
Tanzania
Moshi Arusha
Mwanza
Mbeya
Morogoro
Iringa
Dodoma
DSM
Tanga
Bukoba
With the opening of EFTA’s Dar es Salaam branch in 2016, EFTA created a nation-wide branch network for the provision of SME leasing to all major economic areas of Tanzania
EFTA offers its leasing product in all major economic areas of
Tanzania
Active locations
Potential 2018 - 2019
Mtwara
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EFTA’s leasing product addresses a wide range of sectors,
enabling value creation with productive assets
• Unique product: no
collateral, three-year term,
10% down-payment (20% for
tractors)
• Accessible to semi-formal
enterprises
• Broad-ranging: can include
all durable equipment where
EFTA can find a reputable
supplier
Irrigation
Laundry
Agriculture
Animal feed
Carpentry
Bricks
Oil expelling
Printing
Poultry
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Financial leasing provides a collateral substitute, which
unlocks the traditionally under-financed…
Private
Equity
(>$5m)
SME Funds
($50k-5m)
Microfinance
($0-2k)
EFTA
($2k-50k)
Scalable solution:
• Scalable, low cost cookie-cutter
approach like MFIs
• Financial leasing of equipment
provides effective collateral
substitute
• Relationship-based to
understand their situation
• Patient capital to accommodate
volatility: flexible 36 month
payback period
Small business challenges:
• Low transaction sizes: need
standardisation to lower cost
• Low collateral levels: need to
mitigate risk
• Lack of sophistication: requires
more engagement and
specialist team
• Lumpy business environment:
requires flexibility
• Need for fixed assets:
requires long loan terms
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Broad supplier network allows EFTA to target a variety of
sectors
Portfolio by sector, Tanzania, % of investments
11%
37%
26%
26%
Agri-
business
Agriculture Services
Manufacturing
• Seed oils: expellers and filters
• Animal feed: processors
• Flour (rice, maize, millet): millers
• Grains (rice, maize): hullers
• Rice farming: rice harvesters
• Direct Agriculture: tractors
• Horticulture: greenhouse / drip irrigation
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Significant evolution in leasing market in Tanzania since
roll out of IFC sponsored leasing regulations…
2009 2010 2011 2012 2013 2014 2015 2016
Ministry of Finance
issues Financial
Leasing Act (2008)
along with IFC
support
Bank of Tanzania
issues Leasing
Regulations (2011)
EFTA receives $1.4M
CD grant to develop
existing leasing model
Maturation of Tanzanian Leasing Industry with IFC support
EFTA secured outside
equity investor;
underpinning
expansion across TZ
Governor of Bank of
Tanzania makes
financial leasing key
pillar in agricultural
finance strategy
IFC and FSDT host
round table with TRA
to discuss tax
considerations
Central Bank of Tanzania supports leasing as one of the
three pillars for creating access to finance in agriculture
• Bank of Tanzania’s Agribusiness and Agri-finance forum
in Arusha
• As part of his closing remarks, Governor Ndulu made
equipment leasing one of the BoT’s three pillars for
creating access to finance in Tanzania’s agricultural
sector
• Specifically stated that Tanzania’s banks “need to be
doing what EFTA is doing” to reach this target market
with lease finance to create growth and prosperity in
Tanzania
www.equityfortanzania.org
In 2016, EFTA’s work featured in the Economist
• In June 2016, the Economist’s article “Caught in
the Middle” noted the significant SME credit gap
in Africa, and highlighted EFTA as an innovative
provider of credit for small businesses in
developing countries
• The Economist noted that “Around two-thirds of
SMEs in poor countries cannot borrow as much
as they would like, compared with a sixth in the
rich world, says the International Finance
Corporation, the corporate-lending arm of the
World Bank. It put the “credit gap” for small but
formal businesses in developing countries at
around $1 trillion in 2011. Throw in informal
firms, and the shortfall is even greater.”
• The Economist mention was a significant
highlight for 2016, and a reflection of the team’s
hard work over the past four years
With over 50 suppliers in our network, EFTA creates new market for
equipment dealers and customer access to high quality equipment
Selected supplier logos
Co-branded events strengthen supplier relationships and
relational marketing to customers
Case Study: Pendo Laizer – Brick Making Machine
Customer Name: Pendo Laizer
Equipment: Brick Making Machine
Jobs Created: 4 casual employees
Sector: Manufacturing
Investment Amount: USD 10k
In 2014, Mrs. Laizer saw an opportunity to start her own
business and EFTA financed a high-quality brick making
machine from our supplier, Nile Machinery, in Dar es
Salaam. As EFTA provided a loan without collateral and
provided a relatively straightforward, and quick process
compared to the banks, Mrs. Laizer was excited to apply
for a loan from EFTA.
Mrs. Laizer sees opportunities to increase the size of her
business by adding a paving machine, as well as obtaining
financing for a tipper truck to enable her to sell larger
volumes.
In the words of Mrs. Laizer, “As a young entrepreneur and
as a woman, EFTA has changed my life in ways I cannot
explain…EFTA has given me an opportunity to be a strong,
financially independent young lady”
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Photo credit: Joe Laurence, Seychelles News Agency
Coy Buckley
CEO
Equity for Tanzania,
Limited (EFTA)
+255 76 897 3338
CLIMATE FINANCE THROUGH LEASING
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Tibor Kludovácz Industry Specialist - Climate Business IFC Financial Institutions Group - Sub-Saharan Africa
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Photo credit: Romano Laurence, Seychelles News Agency
TABLE OF CONTENTS
1) What is Sustainable Energy Finance?
2) Opportunities in Sustainable Energy Finance
3) Leasing for Sustainable Energy Finance
4) Leasing Project Examples
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What is Sustainable Energy Finance?
SECTION 1.
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ENERGY: Energy efficiency, renewable energy, storage, smart grids, energy access
TRANSPORTATION: Energy efficient components, fuels
and logistics
WATER: Capture, treatment, conservation, wastewater
treatment, access
AIR & ENVIRONMENT: Carbon credits, trading and offsets
BUILDINGS: Low carbon strategy, energy efficiency,
sustainable materials, green buildings
MANUFACTURING: Green chemicals, RE/EE supply
chain, cleaner production
AGRICULTURE & FORESTRY: Land management, low
carbon/adaptation strategies, biomass, biofuels, EE
RECYCLING & WASTE: Recycling and waste treatment services
SUSTAINABLE ENERGY FINANCE (“SEF”)
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SECTORAL OPPORTUNITIES FOR LEASING
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Sector Potential Borrower Energy Efficient / Renewable Energy Equipment Typical Segment Interface
Agriculture Farmers, Cooperatives, Supply chains
Biomass/biogas digesters, Drip irrigation systems, efficient and/or solar/biogas powered pumps, Efficient agro-machineries, storage facilities
MF and Retail for Farmers, SME and Corporate depending on company size. Leasing
Residential/ Retail
Builders, home owners, home owner associations, individual households
Solar water heaters, wall/roof insulation, Water-saving shower heads, Solar lighting, CFL, improved cook stoves, water purifiers, efficient refrigerators, efficient HVAC units, double glazing
Mainly MF and Retail for households, SME and Corporate depending on size. Real estate leasing
Commercial Housing complexes operators, maintenance companies; Housing developers, Property Operators
Heating and ventilation equipment, Control and metering systems, Electricity peak-load control systems, Air-conditioners, Heat pumps, solar water heaters
Corporate and SME. Leasing for major equipment.
Municipal Municipalities, district heating companies, street lighting operators, public buildings operators
Boilers for district heating as well as for public/municipal buildings, Heat exchangers, pipes for infrastructure projects, Cogeneration units, Complex EE projects
Mainly SME and Corporate. Leasing
Industrial Industrial companies, SMEs and MSMEs
Energy efficient production lines, Waste heat recovery devices, Heating systems upgrades, Efficient boilers and heaters, Fuel switching (from coal to gas or biomass), Electricity peak-load control systems, Cogeneration units
SME and Corporate. Leasing for major equipment
Renewable generation
Project developers, Corporates/SMEs
Wastes to energy (wood waste etc.), production of fuel, biogas, biodiesel, solar (PV and thermal), hydro and wind power, geothermal
Corporate and SME lending on captive generation. Project Finance for grid attached RE plants. Specialized insurance product for solar PV. Leasing
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BENEFITS FOR BUSINESSES
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BENEFITS FOR FINANCIAL INSTITUTIONS
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Expanded market share through a new
business line
Improved risk profile of the portfolio
Positive social and environmental
impacts
Innovative product – First mover advantage/differentiation
Sell on value to customer, not pricing
Monetize existing client base and attract quality new clients
New marketing channels through vendor partnerships
Improved competitiveness of clients
Reduced environmental risks of the clients
Better performing FI portfolio
Innovative and environmentally responsible bank
Leadership in Sustainability
Enhanced brand reputation
PR and marketing opportunities
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Business opportunities in Sustainable Energy Finance
SECTION 2.
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TRANSITION TO LOW CARBON ECONOMY
9
Structural and technological changes unfolding in the global economy, combined with multiple opportunities to improve economic efficiency, now make it possible to achieve both better growth and better climate outcomes.
Appx. $7trillion/year of capital investments required to move to a low-carbon economy in 15 years
SEF investment opportunities by region
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ACCES TO ELECTRICTY AND MODERN COOKING
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Source: Rio+ 20 policy paper #8, Riahi et al., 2012 Source: Washington Post, 2015-
Appx. 30 billion USD/year of financing required for modern cooking and electricity access
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GLOBAL INVESTMENT IN RENEWABLE ENERGY
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Source: IIF, Bloomberg
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GLOBAL ENERGY EFFICIENCY MARKET
IEA member countries avoided USD 5.7 trillion of energy expenditure since 1990 by energy efficiency investment alone. Benefits of improving energy efficiency extend well beyond financial savings, relating also to improved energy security, higher productivity for businesses and reduced greenhouse gas emissions;
OECD energy consumption is now as low as it was in 2000, while GDP has expanded by USD 8.5 trillion, an increase of 26%. This suggests that these countries have successfully decoupled economic growth from energy consumption growth, with energy efficiency being the main contributing factor;
Approximately 40% of the emissions reductions required by 2050 to limit global temperature increase to less than 2 degrees centigrade would potentially come from energy efficiency;
In 2012 energy efficiency investments were estimate at USD 310-360 billion globally. Investments in energy efficiency are set to keep growing, despite lower oil and gas prices, driven by more assertive and more comprehensive policies.
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Source: IEA Energy efficiency Market Report 2015
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Note: US$ equivalent data represents IFC's climate own-account and core mobilization through financial institutions recorded during the period FY05 – FY16
IFC channels financing through financial intermediaries to support lending to SEF investments. To date IFC has supported more than 140 financial partners through 188 investment projects in 43 countries since 2005, providing close to US$4.3 billion in financing facilities.
IFC’S SEF BUSINESS THROUGH FINANCIAL INSTITUTIONS
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Leasing for Sustainable Energy Finance
SECTION 3.
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LEASING VS. TRADITIONAL BANK FINANCE FOR SEF
AREA LEASING VS. BANKING IN SUSTAINABLE ENERGY FINANCE
ASSET FINANCE Asset finance is the core area of Sustainable Energy Finance. Essentially, all climate transactions can be classified as asset finance;
Banks are involved in various other financing areas (working capital finance, housing finance, retail, SME, etc.) that are less conducive for green assets;
IDENTIFICATION OF CLIMATE ASSETS
Leasing focuses on the asset and the specific benefits it will bring to the operations of the company. This knowledge about the assets makes identification of green assets easier in the context of leasing;
Banks tend to struggle with identifying climate eligible assets as credit decisions are mainly driven by balance sheet and collateral, as opposed to the benefits generated by the assets purchased;
IN-HOUSE TECHNICAL SKILLS
Leasing companies tend to have in-house technical skills in relation to the valuation of the residual values of the assets they finance. These technical skills make it easier for them to identify and manage green assets;
Banks would typically have more difficulties to identify and manage green assets as they would not normally have in-house technical people (except for large project finance deals);
COLLATERAL VALUE OF ASSETS
Leasing companies will use the assets financed as collateral for the investment. Through their technical knowledge of the assets it is much easier for a leasing company to accepts certain assets as collateral than for banks;
One of the key barriers for the development of the solar PV market in many countries is that fact that most banks aren’t capable of accepting it as collateral;
VENDOR FINANCE Leasing companies will work through strong Vendor partnerships. This provides immediate access to relevant information about the assets to determine key benefits for End-users and, climate eligibility;
Banks typically work directly with the client and are less involved/interested in the use of proceeds if client has balance sheet and collateral.
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EE/RE Leasing Features ADDITIONAL BENEFITS OF LEASING FOR SEF
LEASING BANK LOANS
AMOUNT FINANCED
Up to 100% financing is available including soft costs and sales tax, as well as future O&M contracts. No downpayment is required from Lessee.
Banks will generally lend only to a portion (up to 70%-90%) of the equipment or vehicle cost; exclusive of soft costs such as shipping, training, installation, etc.
TAX BENEFITS Under a true lease, the end user may claim the entire lease payment as a tax deduction. The equipment write-off is tied to the lease term, which can be shorter than other depreciation schedules, resulting in larger tax deductions each year.
Borrowers/owners may claim a tax deduction for a portion of the loan payment as interest and for depreciation which is tied to depreciation schedules.
COLLATERAL In most instances, the only collateral is the equipment being leased.
Banks usually secure their loans by requiring additional collateral such as real estate, equipment, inventory, receivable, etc.
EQUIPMENT TYPES
Leasing can provide funding for most equipment types. Leases tend to finance equipment, machinery, vehicles, hardware, software and services.
Banks will not finance equipment they do not understand or feel has limited collateral value.
OBSOLESCENCE RISK
Equipment obsolescence is transferred to the Lessor if no obligation exists to own the equipment at lease end. Some leases contain provisions for upgrading equipment during the lease term for additional rent.
The borrower/owner bears the risk of equipment obsolescence and devaluation, due to development of new technology.
REPAYMENT RATES
Repayments are generally fixed for the term of the lease. Fixed payments make budgeting and cash flow management much easier.
Banking interest rates are usually floating and based on Prime Rate or another reference index.
REPAYMENT TERMS
Flexible payment terms to include different tenors, and different payment terms (seasonal, deferred or step payments for example)
Banks tend to be less flexible than leasing companies as their SME business typically operates with standardized terms.
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LEASING EXAMPLES 1.
INDUSTRIAL / SMEs
Cogeneration
Energy efficient boilers
Steam or gas turbines
Energy efficient production lines
Other EE equipment, like compressors, ovens, machinery, etc.
Waste water treatment technologies
RENEWABLE ENERGY
Wind power plants
Small hydro power plants
Solar PV panels
Concentrated solar power plants
Solar water heaters
Biogas/Landfill gas (cogeneration) units
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LEASING EXAMPLES 2.
RETAIL / MICROLEASING
Efficient lighting
Small boilers for heating
HVAC systems (air conditioners)
Solar water heaters
Energy efficient domestic appliances (refrigerators, washing machines, etc.)
Solar Home Systems
VEHICLES
Electric / Hybrid Cars
LPG, CNG buses, trucks, corporate fleets
Electric utility vehicles (electric construction vehicles)
Efficient fleet management, route optimization software
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SEF Leasing Project Examples
SECTION 4.
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YAPI KREDI LEASING TURKEY
In 2008, IFC provided a loan of US$50 million to Yapi Kredi Leasing Turkey (YKL). This investment help YKL diversify its portfolio and increase its market share in very competitive market.
YKL’s objective was to target SME's and new
products in energy efficiency and renewable
energy financing. The transaction marks the
first time that the company has taken financing
to direct to sustainable energy projects.
YKL Leasing focused to develop sustainable
energy investments across all industry sectors.
Within two years, YKL SEF portfolio reached
US$200 million of loans
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FRANSABANK / LEASING COMPANY LEBANON
In 2014, IFC has approved to Fransabank and its subsidiary LLC, The Lebanese, Leasing Company; a combined package of:
1) US$ 40mio SEF loan for energy efficiency and renewable energy financing, and
2) Technical assistance to build capacity to develop SEF operations, build the pipeline of eligible projects, and design SEF product
Fransabank have financed over US$ 40 million of projects within first year of SEF operations;
The IFC Advisory Services project contributed significantly to the establishment of efficient internal structures within the Bank to properly identify and capture SEF business opportunities and develop strategy towards EE/RE lending.
“Introduction of sustainable energy finance into our SME, corporate and leasing activities is part of our “Go Green” strategy”
Adnan Kassar, Chairman of the Board, 2014
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Photo credit: Joe Laurence, Seychelles News Agency
THANK YOU!
Tibor Kludovácz Industry Specialist – Climate Business IFC Financial Institutions Group – Sub-Saharan Africa International Finance Corporation 14 Fricker Road, Illovo, 2196 P.O. Box 41283, Craighall 2024 Johannesburg, South Africa Switchboard: +27-11-731-3000 Direct Line: +27-11-731-3016 Facsimile: +27-11-268-0074 Mobile: +27-83-376-2095 Email: [email protected] Website: www.ifc.org
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ERROL RENAUD SEYCHELLES ENERGY COMMISSION (SEC)
FINANCIAL LEASING IN THE ENERGY SECTOR
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Table of Contents • Overview of Energy Sector in Seychelles • Energy Policy and Targets • Fuel Costs and Tariffs • Renewables and Energy Efficiency • Financial Programs and Results • Market Study and Research • Financial Leasing in the Energy Sector
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Overview of Energy landscape in Seychelles
• Population of around 93000 spread across the archipelago.
• Grid connected, Mahe, Praslin and La Digue are inter connected.
• Out-lying islands, off-grid, auto producers.
• Energy access 99%.
• As of 2016 data 406 Gwh energy generated.
• 2.5% of RE 6MW wind 2MW distributed solar.
• 7.8Gwh installed power was from wind power.
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Energy Policy and Targets
• Energy policy 2010-30.
• Targets 5% 2020, 15% 2030.
• Planning for 100% 2050 of RE in the electricity grid.
• INDC’s under UNFCCC, reducing its GHG emissions by 122.5 ktCO2 ( 21.4% 2025).
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Fuel Costs and Tariffs
• Fuel costs per kilowatt-hour (kWh) made up almost 90% of the total power generation costs in 2014 (2.08 out of
2.33 SCR/kWh).
• Domestic tariff 0-200 kwh consumed is 0.79 cents as of 1st April 2017.
• Commercial tariff set at 3.13rs 0-200 kwh.
• Essentially we have a Subsidized domestic tariff.
• Approx 4% of GDP go to fuel imports for generation of electricity.
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Two ways of achieving the policies and targets set…..
1. Increasing Renewable Energy (RE ) in our Energy mix.
2. Energy Efficiency.
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Renewable Energy
• Emphasis on Renewables in generation of electricity.
• Inclusion of Independent Power Producers (IPP’s).
• Auto producers.
• Rebalancing of tariffs structures.
• Re drafting of current regulatory frameworks.
• Alignment of all the legislations in the energy sector.
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Energy Efficiency in Seychelles
Implementation of the National Energy Efficiency Programme
Includes…
• Promotion of Energy Efficiency appliances.
• Promotion of solar water heating.
• New regulations on the use of air conditioning a/c.
• New Building code for household dwellings.
• Promotion of co generation. Turning waste heat.
• energy into electricity.
• Reduce Energy intensity to 10% by 2020.
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Financial Programs Currently Available • SEEREP subsidized loan scheme.
• Up to 150,000rs , pay back 0- 5 years.
• 5% interest, GoS pay the bank the difference between the 5% and Prime Lending Rate.
• GoS cover up to 50% of any defaults by customers.
• Additionally GoS guarantees 50% of collateral.
• Loans above 75000rs are subjected to a 2.5% contribution.
• Below 75,000rs no personal contribution.
• Collateral should not exceed 100% of the value of loan being financed.
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Financial Rebate Scheme: Solar PV
• GOS-UNDP-GEF rooftop solar PV systems program.
• Set to kick start the solar PV market.
• Reduce the upfront cost of solar PV systems.
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Residential
• 25% rebate payment.
• Max payout is for 3kwp system.
• USD 2.8/W .
Commercial
• 15% rebate payment.
• Max payout is for 15kWp system.
• Dollar per watt basis – USD 3.2/W.
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VAT Exemptions
On energy efficiency appliances
Value Added Tax Act 2010,
First Schedule – Exemptions,
Part I – Imports, section 16 (1) and (2).
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Results of These Financial Programs
• SEEREP scheme in place since 2012.
• 113 applicants processed up till now April 2017.
• 23 applications up to April 2017.
• No SME’s applications in the database yet.
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Market Study/ Research
Study in 2016 showed that the following technologies were highest on the list of MSME’s and households.
• A/C.
• Refrigeration.
• Lighting.
• Solar Water Heater.
These electrical appliances, are in high demand in Seychelles, and the energy efficiency ones should try and
increase its market share.
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• Households and SME’s need additional services to be available to purchase the appliances.
• In-order to achieve the targets set in relation to RE and EE….
• Broader range of services if the energy sector if to increase.
• Including consulting services. One stop shop.
• Lessee concludes an insurance package for its equipment.
• Increase of solar household PV systems for both domestic and business, both MSME’s and large electricity
producers.
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Financial Leasing in the Energy Sector
• There is potential for other alternatives financial vehicles to be incorporated in the energy market.
• On the EE side, the 4 appliances named previously, are in high demand, by households and SME’s.
• They are at a higher cost that conventional ones in the market even with the VAT exemptions they receive.
• Awareness by customers are on a positive, and if financial leasing can supplement the market as an alternative
to the existing financial programs.
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……. On Renewable Energy (RE )
• Seychelles is actively promoting RE technologies as an alternative to conventional fossil fuel
based generation of electricity.
• Commercial entities are always looking to cut down their electricity cost.
• Battery storage as an investment.
• Leasing of rooftops for solar PV.
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Seychelles Energy Commission (SEC)
Unity House , Block B
3rd Floor, Room 307/308
Palm Street , Victoria , Mahe
Tel: 00 248 461819
www.sec.sc
Ministry of Environment , Energy and
Climate change MEECC
Botanic Garden , Victoria, Mahe
P.O BOX 445
Tel : 4670500