Table ronde n°4 Mécanismes de financement innovants au service de la transition écologique :...

36

Transcript of Table ronde n°4 Mécanismes de financement innovants au service de la transition écologique :...

Page 1: Table ronde n°4 Mécanismes de financement innovants au service de la transition écologique : exemples étrangers.
Page 2: Table ronde n°4 Mécanismes de financement innovants au service de la transition écologique : exemples étrangers.

Table ronde n°4Mécanismes de financement innovants au service de la

transition écologique : exemples étrangers

Page 3: Table ronde n°4 Mécanismes de financement innovants au service de la transition écologique : exemples étrangers.

> Rudolf Hennesvice-président, kfW Privatkundenbank-Programme Development Housing

> Sylvie Lemmetdirectrice de la division Technologie, industrie et économie, PNUE

> Virginie Marchalanalyste politique, direction de l’environnement de l’OCDE

> James Ranaivosonconseiller de direction actions opération climat, Banque européenne d’investissement

TABLE RONDE N°4Mécanismes de financement innovants au service de la transition écologique : exemples étrangers

Page 4: Table ronde n°4 Mécanismes de financement innovants au service de la transition écologique : exemples étrangers.

Rudolf Hennesvice-président, kfW Privatkundenbank-Programme

Development Housing

Page 5: Table ronde n°4 Mécanismes de financement innovants au service de la transition écologique : exemples étrangers.

Promoting Energy Efficiency in Germany

● Dr.-Ing. Rudolf Hennes

Vice President

KfW Bankengruppe

Paris

12.07.2012

Page 6: Table ronde n°4 Mécanismes de financement innovants au service de la transition écologique : exemples étrangers.

62

A bank with a wide array of functions

Promotion of developing and

transition countries

International business

Promotion construction

of new housing and modernisation

as well as education

Promotion SMEs, business founders,

start-ups

Financing municipal infrastructure projects and global loans

Germany/Europe agency business for Federal Government

We promote Germany

International project and

export finance

We ensure internationalisation

We promote development

Promotion of environmental and climate protection

Business Area Mittelstandsbank

Business Area Privatkundenbank

Business Area Kommunalbank

Business AreaExport and Project

Finance

Business Area Promotion of

Developing and Transition Countries

Domestic promotion

Page 7: Table ronde n°4 Mécanismes de financement innovants au service de la transition écologique : exemples étrangers.

7

Stick(Laws, By-laws, Technical Standards, DIN-Standards, Building Codes,…)

Tambourine(Communication, Consulting, Technical Capacities)

Carrot(Low Interest Loans, Grants, Partial Debt Relief)

How to Promote Energy Efficiency?

Page 8: Table ronde n°4 Mécanismes de financement innovants au service de la transition écologique : exemples étrangers.

8

Refinancing loan

Loan to customer

Interest rate

retail bank

Customer

Interest rate

Margin for credit risk and handling

German Government

or KfW

Capital market

Interestsubsidy

FundingAAA Rating

Funding by KfW and on-lending through retail banks

State liabilityInstitution owned

by Federal Republic and federal states

Promotional mandate

defined by KfW Law

Advantages:• no distortion of competition• Concentration on core competences• Diversification of risks

KfW‘s Business Model

for commercial and private customers

Page 9: Table ronde n°4 Mécanismes de financement innovants au service de la transition écologique : exemples étrangers.

9

Energiewende – Programmes of KfW

EERE Innovation for Energiewende

KfW-ProgrammeOffshore Wind Energy

KfW-EE ProgrammeIncrease of max. loan amount to. 25 Mio. EUR

ERP-Innovationsprogramm

Increase of max. loan amount to 25. Mio EUR

EE Construction and Retrofit (Residential B.)Increased Grant Element

New: Effizienzhaus Denkmal

IKK-/IKU KfW-Investment LoanMunicipal enterprises; social welfare org.

Increase of loan amount tof 50 Mio. EUR

Energetic Urban RehabilitationGrants and loans to municipalities

KFW-ACTIONPLAN ENERGIEWENDE

Financing Initiative EnergiewendeDirect loans for larger enterprises

KfW-Programme RE

Increase of max. loan amount to 25 Mio. EUR

EE Construction and Retrofit (Non-Residential B.)New: Effizienzhaus 55, 70 und Denkmal

Inclusion of municipal enterprises

Programmes of SME Bank Progr. of Private Customers Bank Programmes of Municipal Bank

Public LightingLoans to municipalities

Page 10: Table ronde n°4 Mécanismes de financement innovants au service de la transition écologique : exemples étrangers.

10

Promotional effects

Page 11: Table ronde n°4 Mécanismes de financement innovants au service de la transition écologique : exemples étrangers.

Sylvie Lemmetdirectrice de la division Technologie, industrie et économie,

PNUE

Page 12: Table ronde n°4 Mécanismes de financement innovants au service de la transition écologique : exemples étrangers.

Virginie Marchalanalyste politique, direction de l’environnement de l’OCDE

Page 13: Table ronde n°4 Mécanismes de financement innovants au service de la transition écologique : exemples étrangers.

Towards a green investment policy frameworkThe case of Low Carbon, Climate Resilient Infrastructure

Presented by Virginie MARCHALLe financement de la transition écologique

Jeudi, 12 juillet 2012Ministère de l’économie et des finances

Page 14: Table ronde n°4 Mécanismes de financement innovants au service de la transition écologique : exemples étrangers.

Why infrastructure matters?

14

Long infrastructure lifetimes means it has a strong lock-in effect for climate – locking in both vulnerability and emissions for decades to centuries

Need to act now!

3-6°C by 2100

2°C by 2100

Source: OECD Environment Outlook to 2050

Page 15: Table ronde n°4 Mécanismes de financement innovants au service de la transition écologique : exemples étrangers.

The infrastructure financing gap

15

Infrastructure needs (annual, in USDtn illustration, need to be adapted to country context)

Source: OECD illustration, based on estimates from WB, WEF, OECD and Kennedy and Corfee 2012,”Mobilizing private sector investment in low carbon infrastructure”

CHALLENGES• Scale-up sources of capital, public and private

• Shift sources from brown to green

?

Private sector participation

Page 16: Table ronde n°4 Mécanismes de financement innovants au service de la transition écologique : exemples étrangers.

The barriers to private sector engagement

16

• Barriers linked to infrastructure• High capital upfront

• Relatively low-return

• Very long investment timelines

• Barriers linked to climate market failure• Less profitable than LCR alternatives

• Lack of familiarity

• Higher policy risk

• Contextual barriers• New financial regulations restrain the

availability for long term capital

• Project finance is drying up

Balancing the risk-return profile to attract private sector investment

Role of the public sector:1. Reform policies to improve the risk-return value proposition of green

infrastructure2. Leverage public sources of finance to mobilise the private sector

Page 17: Table ronde n°4 Mécanismes de financement innovants au service de la transition écologique : exemples étrangers.

TOWARDS A GREEN INVESTMENT POLICY FRAMEWORK

The need to combine investment and climate policies

1. CLEAR GOALSStrategic goal setting and

alignment

2. ENABLING GREEN INVESTMENT

Enabling policies for competitive, open markets;

incentives for green investment

3. MOBILISING GREEN FINANCE Financial policies, tools and

instruments

4. RESOURCESHarnessing public and private resources and

capacity

5. ENGAGEMENTPromoting green

business and consumers behaviours

Two objectives: 1. Social and economic provision of infrastructure at the lowest cost

2. Improve the risk-return value proposition of green infrastructure assets

Page 18: Table ronde n°4 Mécanismes de financement innovants au service de la transition écologique : exemples étrangers.

The challenge of sustainable transport

Specific challenges

• Scale: Passenger transport volumes x2.5 in 2050, freight x4, urbanisation: +2.8 billion people in cities by 2050

• Shift: natural bias towards road infrastructure

• Public sector: low returns, predominant role of the public sector

Priorities

18

Integrate transport and land use planning

CBA based on co-benefits

Market structurePrice externalities beyond carbon

Remove fossil fuels subsidiesMainstream LCR in public

procurement

Integrate financing and planning (scale up and earmark public

revenues, subsidies)Land value capture tools for private

investorsBonds

Harmonising GHG emission accounting

Page 19: Table ronde n°4 Mécanismes de financement innovants au service de la transition écologique : exemples étrangers.

Why pensions funds are not investing more?

Problems with clean energy investments

2

Problems with Infrastructure Investments

1

Lack of suitable investment Vehicles(climate bonds)

3

▪ Carbon pricing and fossil fuel subsidies▪ Unpredictable and fragmented policy support▪ Special species of risks

▪ Lack of project pipeline▪ Lack of investor understanding▪ Regulatory barriers

Barriers to institutional investment in clean energy

▪ Nascent and illiquid climate bond markets▪ Challenges with securitisation▪ Credit issues

Problems with clean energy investments

2

Problems with Infrastructure Investments

1

Lack of suitable investment Vehicles(climate bonds)

3

▪ Carbon pricing and fossil fuel subsidies▪ Unpredictable and fragmented policy support▪ Special species of risks

▪ Lack of project pipeline▪ Lack of investor understanding▪ Regulatory barriers

Barriers to institutional investment in clean energy

▪ Nascent and illiquid climate bond markets▪ Challenges with securitisation▪ Credit issues

Problems with clean energy investments

2

Problems with Infrastructure Investments

1

Lack of suitable investment Vehicles(climate bonds)

3

▪ Carbon pricing and fossil fuel subsidies▪ Unpredictable and fragmented policy support▪ Special species of risks

▪ Lack of project pipeline▪ Lack of investor understanding▪ Regulatory barriers

Barriers to institutional investment in clean energy

▪ Nascent and illiquid climate bond markets▪ Challenges with securitisation▪ Credit issues

Source: OECD (2012 Forthcoming) The Role of Institutional Investors in Financing Clean Energy

Page 20: Table ronde n°4 Mécanismes de financement innovants au service de la transition écologique : exemples étrangers.

Thank you!

Contacts:

Jan Corfee-Morlot ([email protected]), Senior Policy Analyst

Virginie Marchal ([email protected]), Policy Analyst

Geraldine Ang ([email protected]), Junior Analyst Policy Analyst

Christopher Kennedy , visiting scolar

www.oecd.org/env/cc/financing

20

Page 21: Table ronde n°4 Mécanismes de financement innovants au service de la transition écologique : exemples étrangers.

21

Level of Financial Sector DevelopmentLow Medium High

Low Income Countries Middle Income Countries Upper Middle Income and High Income Countries

Banking Services Basic Banks Full Range Banks Universal BanksNon-Bank Financial Services

None Government Bonds Equity

Government and Corporate Bonds

Equity Alternatives (Private

equity, venture capital)

Interest Rate Administrative Setting Largely Market Based Fully Market BasedAccess to Finance for SMEs Limited Partial Readily Available

Availability of Long-Term Funding

Limited(up to 1 year)

Partial(up to 7 years)

Full(up to 15 years)

Risk Management Weak Adequate RobustClean Energy Financing Instruments

Lines of Credit (liquidity support)

Concessional Financing Dedicated Debt Funds

Lines of Credit (demonstration)

Partial Risk Guarantee

Lines of Credit (demonstration)

Partial Risk Guarantee Equity Funds Consumer Financing

3. MOBILISING GREEN FINANCE Financial policies, tools and instruments

Source World Bank

Page 22: Table ronde n°4 Mécanismes de financement innovants au service de la transition écologique : exemples étrangers.

22

POWERGENERATION BUILDINGS &

VEHICLES

OIL & NAT. GAS INFRASTRUCTURE

Low carbon electricity enables

greening of buildings & vehicles

Lower investment in oil & nat. gas infra. frees up capital for

green energy generation

Decreased demand for oil & natural gas, and

their infrastructure

Policies to promote energy efficiency and low carbon technologies for buildings

& vehicles

4. APPLICATIONS AND NEXT STEPSInfrastructure relationships in virtuous circles of low carbon growth

Sources: Kennedy C. and J. Corfee Morlot, 2012 forthcoming, Mobilising private investment in low-carbon, climate resilient infrastructure, OECD.

Page 23: Table ronde n°4 Mécanismes de financement innovants au service de la transition écologique : exemples étrangers.

23

POWERGENERATION BUILDINGS &

VEHICLES

OIL & NAT. GAS INFRASTRUCTURE ROAD

RAIL

PORTS

AIRPORTS

Low carbon electricity enables

greening of buildings & vehicles

Lower investment in oil & nat. gas infra. frees up capital for

green energy generation

Decreased demand for oil & natural gas, and

their infrastructure

Decreased demand for

coal & oil frees up rail and port

capacity

Policies to promote energy efficiency and low carbon technologies for buildings

& vehicles

4. APPLICATIONS AND NEXT STEPSInfrastructure relationships in virtuous circles of low carbon growth

Sources: Kennedy C. and J. Corfee Morlot, 2012 forthcoming, Mobilising private investment in low-carbon, climate resilient infrastructure, OECD.

Page 24: Table ronde n°4 Mécanismes de financement innovants au service de la transition écologique : exemples étrangers.

24

POWERGENERATION BUILDINGS &

VEHICLES

OIL & NAT. GAS INFRASTRUCTURE ROAD

RAIL

PORTS

AIRPORTS

Low carbon electricity enables

greening of buildings & vehicles

Switching of freight from road to rail to replace

transport of coal

Lower investment in oil & nat. gas infra. frees up capital for

green energy generation

Decreased demand for oil & natural gas, and

their infrastructure

Decreased demand for

coal & oil frees up rail and port

capacity

Growing use of port capacity for global

trade in components of green buildings,

vehicles and energy supply systems

Policies to restrict growth in air freight, and maintain freight transport by rail and

marine transport

Demand management & switching of freight to rail decreases demand

for road infra. freeing up capital for low carbon

vehicles

Policies to promote energy efficiency and low carbon technologies for buildings

& vehicles

4. APPLICATIONS AND NEXT STEPSInfrastructure relationships in virtuous circles of low carbon growth

Sources: Kennedy C. and J. Corfee Morlot, 2012 forthcoming, Mobilising private investment in low-carbon, climate resilient infrastructure, OECD.

Page 25: Table ronde n°4 Mécanismes de financement innovants au service de la transition écologique : exemples étrangers.

James Ranaivosonconseiller de direction actions opération climat,

Banque européenne d’investissement

Page 26: Table ronde n°4 Mécanismes de financement innovants au service de la transition écologique : exemples étrangers.

European Investment Bank

Financing the Ecological Transition

James RANAIVOSON12 July 2012

Page 27: Table ronde n°4 Mécanismes de financement innovants au service de la transition écologique : exemples étrangers.

Financing the Ecological Transition

Climate Action in EIB Corporate Operational Plan………….3

EIB Group (EIB/EIF) Financial Tools….………………………..4

Challenges : EIB Contribution………………………………..5-6

Infrastructure Layered Debt Funds.....………………………...7

Project Bonds……….……………………………………………..8

Generic Structured Bonds………………………………………9

European Investment Bank Page 27

Page 28: Table ronde n°4 Mécanismes de financement innovants au service de la transition écologique : exemples étrangers.

Climate Action in EIB’s Corporate Operational Plan

EIB COP Target Context : 25% of total lending contributing to Climate Action Projects qualify from following sectors/project types: Energy Efficiency, Renewable Energy,

Sustainable Transport, Forestry and Land Use, RDI, Adaptation, GHG capture or avoidance

European Investment Bank Page 28

0

5000

10000

15000

20000

25000

Millions

2009 2010 2011

Sustainable transport RE EE RD& I Other0.0

5.0

10.0

15.0

20.0

25.0

2008 2009 2010 2011

EIB

sig

natu

res

(bn

EUR

)

Sum of AMOUNT

Year of date of signature

17%

21%

28%

30%

Page 29: Table ronde n°4 Mécanismes de financement innovants au service de la transition écologique : exemples étrangers.

EIB / EIF Financing Tools

Page 29European Investment Bank

Risk Capital Growth Capital Mid-Market and Risk Sharing Finance Investment Loans

Purpose: IP and Technology Transfer, Pre-seed & Seed & Early Stage financing

Intermediaries / Partners: (i) Research Centres, Incubators, Business Angels, Microfinance Financers, Development & Promotional Banks; (ii) Early Stage VC Funds

Products: EIF as Fund-of-VC Funds manager on behalf of EIB, EC and other public or private mandators

Purpose: Access to additional capital to finance growth

Intermediaries / Partners: (i) Development & Promotional banks, Commercial Banks, Private Institutional investors, Public Regional Managing Authorities & local banks; (ii) Growth Equity or Hybrid Mezzanine VC Funds

Products: (i) EIF as Fund-of VC Funds manager on behalf of EIB, EC and other public or private mandators; (ii) EIF as Holding Fund managers of EU structural funds dedicated to finance growth capital

Purpose: Access to capital for stage of commercialisation ; stimulate loans to sub-investment grade companies

Intermediaries / Partners: Same as (i) for Growth Capital ; (ii) Private Mid-Market Equity Funds

Products: Same as (i) for Growth Capital; (ii) EIB-EC joint RSFF; (iii) EIB and/or EIF guarantees or credit enhancement of SME loan securitisation

Purpose: Direct Loans to large companies and projects; Intermediated (Global or Framework) Loans through eligible banks to small companies and projects

Intermediaries/Partners:

(i) EU investment grade companies, projects and banks; (ii) EU 27 & accessing sovereigns; (iii) non-EU eligible countries, companies/projects/banks

Products: (i) EIB Loans or Guarantees from own funds; (ii) Loans or Guarantees from EC and MS Mandates

Seed / Start-Up Phase Emerging Growth Phase Development Phase Later Stage Counterparts

Page 30: Table ronde n°4 Mécanismes de financement innovants au service de la transition écologique : exemples étrangers.

Challenges: EIB contribution (1)

European Investment Bank Page 30

Emphasis:

INNOVATION• Support to various stages of RDI in clean and green technology

SUSTAINABLE ENERGY• Continue expansion of renewable energy (RE) production infrastructure• Expand energy networks (grids) especially to integrate generation from RE• Play Catalytic role in energy efficiency initiatives inc. “smart” technology

RESOURCE EFFICIENCY• Scale up support to natural resource management (particularly water, forestry,

ecosystem services, sustainable agriculture & fisheries…) and waste management

TRANSPORT• Pursue strong support to sustainable and resource efficient transport

Page 31: Table ronde n°4 Mécanismes de financement innovants au service de la transition écologique : exemples étrangers.

Challenges: EIB contribution (2)

European Investment Bank Page 31

Lending, Blending, Advising:

In complement to higher lending volumes where applicable:

• Enlarge the scope - in terms of final beneficiary development stage - of some existing financing tools, reinforce or wake up others: mezzanine, RSFF, structural funds, bonds as loan substitutes, securitization, green bonds...and strengthen/expand target sectors: trade finance, biomass, rural development…

• Optimize the use of Infrastructure (PPP, RE, Environment, Forestry, Land Use, Carbon reduction etc) Private (or Debt) Equity Funds

• Built upon existing experience of blending EC budget + EIB own funds and leverage of structural funds to better use financial intermediaries and catalyze private/institutional investors investments

• Prepare for scaling up pilot projects particularly Project Bonds and Structured Debt Funds

• Expand provision of Technical and Financial Advice funded by EC budget, structural funds and Member States

Page 32: Table ronde n°4 Mécanismes de financement innovants au service de la transition écologique : exemples étrangers.

Infrastructure Layered Debt Funds

European Investment Bank Page 32

• Principle:– Utilize EC and 3rd party (sovereign) capital– 1st loss piece is issued by the EC and Sovereign Donors; – EIB leverages off this by going into the 2nd loss piece beside other IFIs/DFIs

• Examples in Energy Efficiency: Green for Growth (8 target partners countries in Southeast Europe ) , EEEF (pan-European)

• Capital Structure:

Private investors

Private investors, EIB, other IFIs

EIB, other IFIs

EC, Sovereign Donors Junior - C SharesJunior - C Shares

Mezzanine - B SharesMezzanine - B Shares

Senior – A Shares Senior – A Shares

NotesNotes

Page 33: Table ronde n°4 Mécanismes de financement innovants au service de la transition écologique : exemples étrangers.

Project Bonds

• Case of EIB funded subordinated debt

Project Bonds

Target rating

minimum A-

Bond issue and underwriting

SPV

ProjectCosts

Project Bond Investor

EIB Sub-debt

Equity & Quasi-equity

EIB sub-debt participation can be combined with different types of funding sources (bonds and other senior loans)

max 20% of the bond issue

European Investment Bank Page 33

Page 34: Table ronde n°4 Mécanismes de financement innovants au service de la transition écologique : exemples étrangers.

FLP = First Loss Piece.

European Commission

European Investment

Bank

SPV

EC FLP EIB, IFIs, DFIs Loans

SeniorDebt

Equity

Port.

of Loan

Assets

Loan 1

Loan 2

Loan 3

Loan n

Equity or Quasi-equity contribution

Project / Portfolio Sponsor

Sub-Debt

Infra PE or Debt Fund

Generic Structured Bonds

PrivateInstitutionalInvestors

Lending

Receivables

Performance Guarantees

Possible participations

Other IFIs, DFIs

Security

European Investment Bank Page 34

EIB could be investor in bond as loan substitute for a single project, senior or junior lender to an SPV of loansecuritization, credit enhancer or guarantor of such SPV (that could be covered bonds) etc.

Investment Grade Bond

Structural Funds

Possible participations

Governments?

Page 35: Table ronde n°4 Mécanismes de financement innovants au service de la transition écologique : exemples étrangers.

Contacts

European Investment Bank100, bd. Konrad Adenauer

L-2950 Luxembourgwww.eib.org

James RANAIVOSONManagerial Adviser

Structured Finance Climate & EnvironmentEmail: [email protected]

Phone: +352 4379 87315

Page 35European Investment Bank

Page 36: Table ronde n°4 Mécanismes de financement innovants au service de la transition écologique : exemples étrangers.