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GO EASTFinanzierungsmöglichkeiten von Windenergieanlagen in Polen
Rosa TarragóCoC RE RMBerlin, 11.10.2007
2CoC Renewable Energies
Agenda
1. Commerzbank & CoC
2. Current status wind energy in Poland
2.1 Ressource potential: wind atlas
2.2 Current network condition
1 – 5
6 – 15
3. Project financing & BRE Bank 16 – 20
4. Conclusions 21 – 22
2.3 Environment aspects: Natura2000
2.4 Support system
3CoC Renewable Energies
Corporates and Markets
796 domestic branches
6.7 million account holders
Telebanking business with
115,000 customers
850,000 deposits with assets
of €130bn
comdirect - Europe’s fastest
growing on-line broker
780,000 high net worth
customers with assets in
excess of €12bn
21 branches outside Germany
Total Assets: € 608bn (inc. Eurohypo)
Market Capitalisation: € 20.1bn
Based: Frankfurt, Kaiserplatz
Founded: 1870 in Hamburg
Employees: 36,000 worldwide
No. of clients: c.8,000,000 worldwide
Rated A / A2International Banking
Private Banking
Domestic Banking
No 5 in German Asset
Management
CB hold >98% of equity in
Eurohypo, Europe’s largest real-
estate lender
Acquired 66.2% in November from
DBK and DrKW
CBK also owns controlling stake in
BREbank
Corporate Relationship Management
Capital Markets & Advisory
Debt Capital Markets
Brokerage
Derivatives
Research
Asset Management
BRE Bank and Eurohypo
Centralized unit in Hamburg
responsible for national and
international RES projects
Portfolio of app. 3.5 billion EUR
CoC Renewable Energies
Commerzbank - An Overview
4CoC Renewable Energies
Countries representing 90% of worldwide wind energy growth.
Future emerging markets
Source: Global wind energy outlook 2006. GWEC
Renewable energy is growing worldwide& Commerzbank is worldwide
5CoC Renewable Energies
BRE Bank* (70.2%)Headcount: 3,878Total assets: € 11,099mPre tax profit: € 135m
Poland
Russia
CB (Eurasija) SAO* (100%)Headcount: 83Total assets: € 1,070m Pre tax profit: € 34m
Prague branch incl. Bratislava* (100%)Headcount: 148Total assets: € 2,101mPre tax profit: € 16m
Czech Republic/ Slovakia
Hungary
CB Budapest Rt* (100%)Headcount: 113Total assets: € 843mPre tax profit: € 12m
Promsvyazbank (15.32%)Financial investment
ProCredit BanksAlbania / Bosnia-Herzegovina / Bulgaria / Georgia / Kosovo / Romania / Serbia
Representative officesBelarus / Croatia / Kazakhstan / Romania / Russia / Serbia- Montenegro / Ukraine / Uzbekistan
CB presence in CEE / CIS - strong platform for further growth
* Data as per 12 / 2006
Ukraine
Bank Forum* (60%)Headcount: 2,506Total assets: € 1,102mPre tax profit: € 2.5m
6CoC Renewable Energies
Track record in renewable energy projects since 1986
One of Europe’s leading banks in the renewable energy sector
Portfolio of app. € 3.5 billion debt finance
Arranger of structured finance transactions
Extensive market knowledge (techniques, legal framework, business evaluation)
Project and corporate financial service along the value added chain
Center of Competence renewable energies - your first choice for renewable energy financial services-
7CoC Renewable Energies
Poland: strong platform for further growth in wind business (1/2)
Existing (indicative) national target: 7.5% RES by 2010
Wind: 2.3% of energy consumption
2.000 MW from base case of ca 234,6 MW
Comparison: Spain‘s (realistic) target 20.000 MW by 2010
New (binding) EU target: 20% from RES by 2020
PL will have to comply with this new target or risk penalties
8CoC Renewable Energies
Source: PWEA Status 01/10/2007
• Till now, 9 commercial windfarms
• All located on the Nord
• 788 Km of coast with high potential for offshore winfarms
Tymién windfarm, 50 MW
Gniewino
Tymién
Puck
Kisielice
200730 MWKamieńsk
200650 MWTymién
200722 MWPuck
200740,5 MWKisielice
200730,6 MWJagniątkowo
20058,4 MWGniewino
20025,1 MWBarzowice
200118 MWCisowo
2002
SoO
30 MWZagórze
CapacityProject
Poland: strong platform for further growth in wind business (2/2)
9CoC Renewable Energies
Poland wind ressources: onshore at 30 m and offshore at 100 m
• Baltic Renewable Energy Center estimates: 4.000 MW, i.a., 30% of the Polish land surface is economically suitable for wind turbine applications, with 5% classed as very favorable
• Resources on Baltic Sea coast and North-Eastern Poland, some potential on complex terrain on the South
• Wind energy potential in Poland has been analysed many times. Lack of objective results.
• Therefore, wind studies for each site are more than ever necessary.
Source: Institute of Meteorology and Water Management
Onshore
Offshore
10CoC Renewable Energies
‘Very favorable’ wind sites are located in rural areas with none or poor grid systems
Underdeveloped distribution network does not allow connection of wind farms over 1.500 MW in the next 5 years
Controversy about financing of necessary investment required for WP connection
Requirement for developers to prepare the grid impact assessment
Improvement on energy balancing regulation
How much wind can tolerate the MV & HV networks?
Source: PSE – Operator S.A.
• DSO have determined and agreed with the TSO the connection conditions for 49 farms (2.146 MW)
• There are plans in place to expand the existing transmission and distribution networks. These investments in the electricity industry are estimated to cost around USD50 billion over the next 15 years. Much of this cost, though, is proposed to be covered in the process of privatization
• Transmission system operator, PSE, has already defined a Development Plan to meet the target of RE production
PSE assumes the following amounts of installed power in wind sources:
2007 ………………….. 473 MW
2008 ………………….. 901 MW
2009 …………………..1.543 MW
2010 …………………..2.297 MW
2011 …………………..2.332 MW
2012 …………………..2.376 MW
2013 …………………..2.422 MW
2014 …………………..2.471 MW
11CoC Renewable Energies
• Network capacity for wind famrs: limited to a “reserve capacity”
• Energy balance
Reduction of the electricity production schedule from 48 to 2 hours
• In case of unbalancing:
Balance energy sale: 37,52 €/MWh
Balance energy purchase: 20,37 €/MWh
Difference: 17,15 €/MWh
Network capacity & Balancing system
Source: PSE – Operator S.A.
• It is expected, gov‘t will set a capacity guarantee to improve competitiveness
• Balancing costs have to be deducted from electricity remunertion. New regulation allows to reduce balancing costs.
12CoC Renewable Energies
Natura2000: environmental issues that need to be addressedSource: ETC Biological / Diversity(European Environment Agency)
• 72 areas of special birds protection (9.7% of the country’s area)
• 240 special habitats’ protection (5,4% of the contry’s area)
• Lack of training of local institutions in charge of NATURA 2000 & of transparency regarding sources on presence of priority species on particular areas
• Increase in the amount of land considered as legimitmate for being qualified as NATURA2000
• Approval of an environmental impact assessment (EIA)
Source: EBREC, Krzysztof Gierulski
13CoC Renewable Energies
• Annual revenues: 30 MW Kamiénsk Hill Windfarm
1) Electricity: 74.800 MWh = € 2.244.000
2) Certificates: 74.800 MWh = € 4.488.000
3) ERU: 75.099 CO2t = € 375.495
• Total annual cash-flow: € 7.107.495
Attractive remuneration system, though volatile
• Electricity price
117,49 PLN/MWh (ca. 3 €c/kWh)
• Green certificates
max. 240 PLN/MWh (ca. 6 €c/kWh) + inflation
• Emission Reduction Unit (CO2 certificates)
ca. 5 €/ERU
205,85
191,11191,55
164,66
183,73 180,13187,38
181,66
190,44
194,69
174,97
196,28
239,24237,89
201,54 200,38196,54 197,84 198,89 199,35 201,62
211,82
229,39
236,95
120,00
140,00
160,00
180,00
200,00
220,00
240,00
260,00
Janu
ary 2
006
Febru
ary 2
006
Mar
ch 2
006
April 2
006
May
200
6
June
200
6
July
2006
Augus
t 2006
Septe
mbe
r 200
6
Octo
ber 2
006
Novem
ber 2
006
Decem
ber 2
006
PLN/MWh
OTC transactions OZEX
Feed-in Tariff Germany
Prices for Green Certificate 2006
14CoC Renewable Energies
Quantification of emission reductions
CO2emissions
(within project
boundaries)
years
crediting period
Baseline emissions without JI project (business as usual)
Emissions with JI project
real CO2emissions
reduced CO2
emissions
Project Implementation
15CoC Renewable Energies
Power Purchase Agreements: with whom?
Map of distribution companies
• PPA with distribution companies or energy trading companies
• PPA lifetime should be longer than the loan lifetime
• PPA prices use to be 20% lower than market prices
• ERU-certificate can improve bankability if provided with an ERPA agreement
16CoC Renewable Energies
Our product range for Poland
Equity
Matching of investors and project developers
Investment advisory
Debt
PF loan, loan syndication, club deal, bilateral lending
Financing structures for all RE technologies
Multicurrency lending
Bonds
Other
Operating accounts and commercial banking needs
Investment banking needs
Currency and interest rate management
Asset management
Debt Equity Other
17CoC Renewable Energies
Finance plan for the various stages of PF
Financial Close Commissioning Seasoning period Seasoning complete (with proven performance)
Turbine Finance
• Specific criteria (planning permissions, land use, grid connections)
• To finance turbine deposits
• Debt to Equity ratio t.b.d.
• Tenor for individual project max. of e.g. 12-18 months depending on the delivery lead times
• Turbine supplier: (several)
• Delivery lead time is t.b.d.
• Debt to be taken at the project holding level for a portfolio of development projects
Construction Finance
• Finance part of Capexincluding refinancing of the turbine deposits
• Debt to Equity ratio [t.b.d.]
• Tenor e.g. 18-24 months construction period plus e.g. 2 years seasoning period
• Capex consists of external hard and development costs
• Debt to be taken at the project holding level same as turbine deposit finance for a portfolio of the same projects that move into construction phase
Bridge Finance
• Refinancing of part of equity funded hard and development costs during construction phase (excluding any uplift in equity valuation of each project)
• The proceeds to be reinvested into projects at development / pre-construction phase
• The seasoning period is up to 2 years for individual projects
• Bridge Finance is secured by the dividend cash flows with a minimum coverage ratio of x:y, e.g. 2:1
Take out Finance
• Pre-agreed and structured to take out the Construction and Bridge Finance.
• Take out option include:- Bank syndication- ABS - Funds- Bond
Pre-construction Construction Phase Operational Phase
18CoC Renewable Energies
Poland: project finance structure
Extensive contract review for diversification of risks
Legal, Financial & Techncial DD
Project Company
ShareholdersAgreement
Supply & ErectionWarranty
Turbine Manufacturer
EPC Contract
Construction Contractor
Operating and MaintenanceContract
O&M Contractor
Credit/FacilityAgreement
SubordinatedLoan Agreement
Insurance policies
Subordinated Debt Equity Subscription
Sponsors
Insurers Hedge Providers
Power Purchase Agreement
Security
Utility Lenders
Swap/ Option Agreements
Which parties are involved?
Which are the relations of these parties among each other?
19CoC Renewable Energies
Cisowo Windfarm (18 MW - V.80)
• Owner: Energia Eco Sp. zo.o
• Developer: EPA
• Location: Cisowo (Koszalin region) ca 1,5 km from Baltic shore
• Generation: 55.000 MWh/pa
• Commissioning: 1st stage (3 WT) in IVQ 2001 2nd stage (6WT) in IQ 2002
• Turbine type: Vestas V80-2,0MW
• Investment costs: PLN 94 mm (EUR 26.1 mm at rates 02/2002)
• Financing: Equity 20% Grant 27,3% EcoFundusz, NFOŚiGW 47,5% (National Fund
for Environmental Protection and Water Management) (preferential loans for 10 years period)
BRE Bank short term loan of 5,2% for VAT financing - fully repaid upon completion of the project;
• other facilities provided by BRE Bank for the 2nd stage of the project:
(a) L/C (70% of the total amount of contract with Vestas2nd stage of the project);
(b) payment guarantee securing 75% of preferential loan provided for the 2nd stage of the project for 2,5 years.
20CoC Renewable Energies
• In the past, none international commercial banks provided debt finance
• The role of local „commercial banks“ was limited to provide: short term VAT-financing, L/C, payment guarantees
• Financial close only possible with large grant amounts & international donor‘s providing debt finance
• Today: equity provided by renowned international players & commercial banks
• Portion Equity / Debt changed
Financing Windfarms: past & present
WindfarmInvestment
Subordinated Debt Equity Subscription
Sponsors Hedge Providers
Lenders
Debt
Commercial Banks
WindfarmInvestment
Sponsors
EBRD
Debt
10%
40%
Subsidies20%
EcoFund National Fund
90%40%
World Bank ……
Windfarms
WP
WP
21CoC Renewable Energies
Conclusion (1/2): Summary
• Resources: 4.000 MW, i.a. 30% of land surface
234,6 MW installed
WE potential has been analyzed many times. Need for objective results.
• Grid: 1.500 MW reserved capacity at distribution level for next 5 years
2.471 MW till 2014 at transmission level
Weak grids in some areas with significant wind resources
Specific balancing for wind energy allowed
• Environment: Natura2000 areas need to be limited
• Remuneration: allows to reach financial close in combination with a bankable PPA
Electricity prices expected to increase
Stable certificate (CoO) prices
ERU prices expected to increase
22CoC Renewable Energies
Conclusion (2/2): Trends
• Estimated high wind potential contributed to the emergence of a large number of project developers and investors
• The market will change significantly in short-term perspective (refuse of weak developers, reduction of no. of non-feasible projects, growing importance of strong developers like Iberdrola…)
• Significant increase of installed capacity may start from 2008 - 2009
• The significant influencing factor will be the national policy and attitude to the WE (stability of law conditions, public support to the investment, declaration of will to meet national targets)
• New quota obligation and development of third party access (TPA) market
• EU 3x20 binding package is an important market driver for WE in Poland
• Growing experiences from wind farms operation, good practices to avoid planning mistakes and environmental, grid and social problems
www.commerzbank.com
For further information:
Rosa M. TarragóRelationship ManagerP: +49 40 3683 4927M: [email protected]
24CoC Renewable Energies
Cap for Certificates of Origin (CoO)
• Maximal price for CoO limited to
substitution fee (240 PLN/MWh)
• For 2006, average OTC-price was 186,87
PLN/MWh (48,24 €/MWh) and 212,62
PLN/MWh (54,88 €/MWh) on the free
market
• Since 2007, substitution fee is indexed to
the inflation
• New regulation to avoid double counting
of certificates
Tymién windfarm, 50 MW
25CoC Renewable Energies
BRE Bank (formerly known as Bank for Export Development) was founded in 1986
In 1992 BRE Bank was privatized, since 1994 Commerzbank strategic investor
Nowadays, Commerzbank AG owns ca 70.2 % of BRE Bank’s shares
Key figures of BRE Bank in Poland:
3,320 employees based in 23 commercial banking branches
1.63 million customers and a total of 1.9 million accounts in mbank (internet banking) andMultibank (retail network)
BRE Bank has business relations with nearly every second company in Poland’s to 500 list
whole spectrum of financial services, incl. leasing, mortgage bank, factoring, insurance and brokerage services
one of the leading banks in Poland in project finance (including renewable energy), LBO/MBO financing
Project financing with BRE Bank