In her welcome address H.E. Sirpa Mäenpää, Ambassador of Finland to Thailand, highlighted the global environmental concerns and how incidents such as the flooding catastrophe have global effects. The Ambassador said she can see an emerging understanding where sustainability must be the goal and renewables will play an integral part. She highlighted the need for better balance in catering for the needs of people in various parts of the world and that economic growth must be inclusive. The planet is facing serious eco system degradation, which sends an urgent call to work towards a new economic low carbon model. EEP aims towards this, the Ambassador said and described the five EEP programmes around the world. Finland’s Ministry for Foreign affairs has already allocated EUR 9.1 million for the next phase starting in 2013, while how to sustain the results is of utmost importance. Ownership was highlighted as criteria along the crucial importance of project funding – the theme of this forum.
Climate markets are here to stay and only businesses that offer innovative solutions can prosper, the Ambassador predicted.
Meanwhile the Ambassador proudly pointed to Finland as a model country for environmental sustainability and performance – ranked number one in the world. The Finnish success in renewable energy sector is due to the government’s emphasis on funding and research all the way since back in the 1980’s.
Thailand is at a risky position, depending on fossil energy supplies, and being rich in alternative energy resources the country is now promoting renewable alternatives aiming at large fossil energy reduction, was the strong message in the keynote address from Dr. Norkun Sitthiphong, Permanent Secretary in the Ministry of Energy, Thailand.
The world is full of crops that can be turned into alternative energy, such as biofuel, the Permanent Secretary continued, such as Palm Oil, Cassava and Sugar Cane.
He outlined the AEDP development plan, where the home government aims to leverage its strong agricultural sector to expand biofuel production six-fold to five billion litres by 2022. The alternative energy mix share should be increased to 20% of the country final energy demand by the same year. "We need to put in place renewable energy plan," he addressed the Forum.
Dr. Peter du Pont, Vice President, Clean Energy Asia, Nexant Inc., gave an overview of Clean Energy Financing: what are the obstacles / barriers / issues as well as solutions and innovations?
He pointed to the overwhelming momentum towards fossil fuels. We need probably only in this region ten EEP programmes, he said, to meet the new demands for energy in Asia. Investing in renewables is more right now than fossil fuels, he pointed out.
He presented ECO-Asia Clean as an example of which Development and Climate Programme brings entrepreneurs together with investors, and in addition PFAN - The Private Financing Advisory Network. PFAN provides the support and advice to clean energy projects selected to help them meet the criteria of the community investment including free matchmaking and coaching service.
The challenge, Peter du Pont pointed out, is the missing middle between those seeking financing and those seeking projects/businesses. There are lots of money and not enough projects! All the financiers are chasing the too few quality projects. Other lessons learned: Lots of projects just need a small "push" and there are great opportunities for intra-Asia cooperation: investment across borders, technology transfer opportunities etc.
Ms. Duangrutai Chotsurakalya, Vice President Kasikorn Bank, spoke on "Clean Energy Project Financing". She explained the structure of a bankable clean energy project financing proposal. In addition, Ms. Duangrutai elaborated on dealing with risks in clean energy project financing, including what the risks and their mitigants are. She concluded by describing how the risks are shared among the project stakeholders.
Ms. Susanne Kern, Asset Management–Environmental and Social Capital of Deutsche Bank, spoke on Investing in Renewable Energy – Challenges and Opportunities from an International Perspective.
Energy yield assessment is crucial, she said and outlined the project milestones in a typical renewable energy project. She also introduced the Global Climate Partnership Fund (GCPF), which aims to contribute to the reduction of the greenhouse gas emission in emerging markets across the world. The drivers behind renewable energy are: climate change, persistent high prices of oil and gas, policy inducements etc., said Susanne.
Target markets for GCPF in Asia are Vietnam, Indonesia, Philippines, China and India while they are also looking at other countries. For financial institutions GCPF provides debt instruments to selected partner financial institutions. These are required to disburse sub-loans to their clients to finance energy efficiency and/or renewable energy projects. She continued outlining considerations for sustainable energy projects and the investment process for direct investments.
Mr. Marc Lees, Business Development Manager, Schneider Electric – speaking on the topic "Catalyzing Clean Energy Projects from Global to Local: the role of technology in a sustainable model" – introduced the forum to the "Smart Grid". By installing micro energy grids, costs for the users can drop. Schneider Electric’s BipBop programme promotes development through combined initiatives including: Business, Innovation and People.
Addressing this in a more conventional way is to look at how one can achieve more by using less energy, what helps you get more from your energy with solutions that make your business more productive and sustainable.
Looking at the Lifecycle for Energy Efficiency solutions Schneider Electric strives to reduce the environmental impact of their products throughout their entire life cycle, particularly through eco-design and eco-production.
We are really witnessing a revolution in the way energy is being managed, towards the Smart Grid, Marc Lees concluded.
Dr. Wolfgang Frank, Senior Advisor, Population and Community Development Association (PDA) presented community development support by micro-finance and co-funding for renewable energy water, environment and food security.
First he gave an overview of their energy efficiency projects and then presented the details of a pilot project for Integrated Solar Powered Water Systems with aims such as promoting renewable energy, mitigating climate change, improving water supply and reducing energy/water costs in target communities.
Furthermore he listed the objectives for Water for Health and Wealth’. Water for Wealth generates income and food security, involving such things as Vegetable Banks.
Wolfgang Frank summed up the essentials for SPWS and gave the benefits of the community development components. He also detailed micro financing via Village Development Banks and co-funding solutions – how to attract different sources of financing. PDA tries to promote CSR partnerships with the private sector.
Mr. Alan Dale Gonzales, Executive Director of Full Advantage, spoke on the topic of CDM as a financial tool for clean energy projects. He reported on the outcome and consequences of the latest UN Climate Change talks and the Durban Platform for Enhanced Action. A Green Climate Fund is to be established. He could see no positive impact on the CER pricing.
Alan also went on non-practical and dream: “Every move is precious, every action counts”. Beyond the Clean Development Mechanism tool one can look at Volume vs. Impact, Compliance vs. Performance and Politics vs. Policy. For example many countries still favour fossil fuels by providing subsidies. As long as the price of clean energy is much higher we will not reach what we are aiming for in terms of climate change, he said.
Looking at the Bottom line vs. Bottom of the pyramid, the poorest of the poor are not benefiting. The most vulnerable pays the most.
"Looking towards 2020: CDM Opportunities in the Mekong Region" was presented by Mr. Philippe Coste, Special Advisor of Carbonium renewable energy projects and carbon credits generation.
His overview of the carbon market showed that it was estimated to USD 141.9 billion in 2010. Innovative schemes for funding in the Mekong region will be required and eligibility for new CDM projects after 2012 are in doubt. From 2012, the EU Emissions Trading Scheme will only allow CDM credits from projects registered in the Least Developed Nations. However, the restriction will only come into force if no acceptable international agreement is developed for emission reduction targets by other major economies. In LDCs such as Laos and Cambodia CDM eligibility continues after 2012, according to Philippe Coste.
Their involvement in an EEP Mekong-supported CDM project was also presented where Carbonium is making its best efforts in delivering the best benefits of the operation: Setting up an Innovative Financing Scheme for the Nam Tha 2 Hydro Power Plant. Renewable energy electricity generation has been implemented in compliance with stringent requirements for sustainability and environmental impacts.
Mr. Keshav Das is the Senior Carbon Finance Advisor at SNV – an international development organisation from the Netherlands. He spoke on the experiences around "Carbon Finance and Domestic Biogas Project: A Reality Check" and their projects in Cambodia.
The domestic energy sector in Cambodia represents about 80% of the total energy demand. Most households still rely on wood fuel and other biomass for cooking (85%), and half of the rural households use lead acid batteries for electricity.
In 2006, the Government of Cambodia, with support from SNV, established the National Biodigester Programme (NBP) with the aim to create a sustainable biodigester sector. SNV’s experience shows a viable renewable energy sector consists of a wide range of functions. In 2008, NBP recognised that privatisation was needed to create a viable sector.
Biofuels is a huge opportunity but not yet a huge CDM Compliance Market Opportunity unless the methodologies become more inclusive or the investors/programme developers are more imaginative or the fuel switch more significant than the 20% Biodiesel blends, said by Mr. Edward Allen, Technical Advisor at LIRE (Leading innovation in Renewable Energy in Lao PDR).
Edwards presented the Constraints and Opportunities for Funding Biofuel Projects with CDM Compliance using a case study from Laos, where the focus is mostly on biodiesel. He presented the EEP Mekong Small Scale Biodiesel Project and the Conditions for Compliance Market Funding and Compliance Funding, giving the need for a captive fleet of vehicles as example.
He found that biodiesel is clearly not strongly supported by UNFCC methodologies and that it is relatively hard to prove how much less emissions than fossil fuels. In the future bio-jet fuel methodologies in future will perhaps be accepted with a captive fleet and good data. There are some particular challenges for Biofuels CDM projects he said. Good biofuels projects can easily fail to meet the requirements.
Mr. Gustaf Godenhielm, Managing Director of Thai Biogas Energy Company (TBEC) presented their wastewater biogas projects in a speech titled "Acting Now for a Sustainable Future – TBEC LIG Biogas Project"
TBEC has 11 projects up and running since starting in 2003, and ADB as CDM partner.
Common practice for treatment of food industry wastewater in Indochina region is “Open Ponds” and wastewater treatment in this region is a serious problem including contamination of nearby rivers and lakes and the contribution to climate change. The business idea is to address this by setting up biogas projects, which can solve the problems, Gustaf Godenhielm explained. Giving the example of the first such project of its kind in Lao PDR he said there is a potential for hundreds of more such installations. As a result the GHG emission is reduced towards slowing down global warming.
However such potential will remain largely untapped unless CER price recovers and/or further significant investment subsidies are made available.
As the first speaker within the Clean Energy Financing By International Institutions session, Mr. Hannu Eerola, Country Program Manager from Nordic Development Fund (NDF) presented the NDF Clean Energy and Environment Financing Facilities and how they finance Climate Change Projects in Low Income Countries.
He explained the Climate Change Mandate Objectives and that NDF mainly gives co-financing support with multilateral and bilateral partners, including the Nordic bilateral aid authorities.
NDF has developed its own climate change screening criteria. Mitigation criteria: The value of the emission reductions should be at least 10% of project investment costs. Adaptation criteria: 50% of the project costs should be subject to the actual or expected impacts of climate change. He mentioned the funding per project is between: EUR 2 million - EUR 5 million. Twenty-seven countries are eligible including Vietnam, Laos and Cambodia. NDF's Climate Portfolio as of December 2011 includes 39 projects with a total value of EUR 106.6 million.
As Climate Change Financing Facilities, for example there is a Nordic Climate Facility, which provides fund for innovative climate change projects in developing countries, and promotes cooperation between Nordic entities and their partners in developing countries to facilitate the exchange of technical know-how and innovative ideas. Projects apply based on themes and 12-15 projects are awarded each time. Hannu Eerola gave some examples of these themes and continued by mentioning the Regional Microfinance and Climate Change Programme.
Ms. Marion Verles of Nexus-Carbon Development spoke on: Banking on Rural Energy – Myth or Reality? Nexus is a cooperative, non profit global alliance of social ventures (NGOs and eco-businesses) that are low carbon project developers. The mission is to reduce climate change while alleviating poverty by providing access to carbon finance and scale up dissemination.
Nexus’ Alliance includes a cooperative of field development practitioners, the Nexus Fund provides affordable financing for project developers, and beyond offsetting it has a partnership platform for responsible actors.
From their Rural Energy and Climate Initiative she presented the findings, and also the lessons learnt from the Nexus Fund: the received feedback, the conclusions drawn.
“One of our mistakes was that we wanted to go too fast. Then we came up with the Rural Energy Framework with two levels of intervention: on Project level and on Policy level”, said Marion Verles. On project level this concerns regional aggregators and for instance turning existing activities into “investment ready projects”, identifying and replicating best practices etc. It also involves finance facilitating tools. On policy level it concerns top down initiatives to build on bottom up approaches rather than “circumvent” them, a carbon price guarantee mechanism etc.
In 2012 Nexus performed a Reality check, looking at Project level activities but also the Enabling environment.
Dr. Romel Carlos of Sustainable Energy Finance, a part of International Finance Corporation (IFC) – World Bank Group presented: "IFC Support for Clean Energy and Environment Sectors in Asia". IFC is a multi-lateral institution dealing with private sector investment in developing countries.
Among its strategic priorities is addressing climate change and ensuring environmental and social sustainability. How IFC deals with it is to provide technology, products and services that “do more with less”. This includes private sector solutions for climate mitigation and adaptation including development within energy, transportation, water, air and environment.
IFC looks at where the biggest demands are. Each business opportunity is market driven and needs to look at the competitiveness, said Romel Carlos. Climate business will only scale and have impact with significant private sector participation – that is where IFC has an important role to play, he said.
He also pinpointed: “We tend to look at the supply side all the time, but we don’t tend to look at the needs. We need to define the exact needs and design well to match those needs.”
Romel Carlos also introduced IFC’s Sustainable Energy Finance Program where their value proposition to Financial Institution (FI) clients is: Advisory services, support in market and IFC financial products.
The business case of Sustainable Energy Projects includes: New technologies available to save energy costs and use renewable energy; increased environmental awareness and interest of borrowers to invest in energy saving and renewable energy projects and equipment; and new business opportunities for contractors/equipment vendors/Energy Service Companies.
On "Promoting Renewable Energy, Clean Fuels and Energy Efficiency in GMS" Dr. Romeo Pacudan, spoke as an ADB Project Team Leader, though not as an ADB representative. He covered the ADB Program Sectors and a "Road map for expanded energy cooperation" with policy objectives. Afterwards he went on to introduce the Sub-regional Energy Forum and the various stages of renewable energy deployment in each country – where China and Thailand are already taking off. In the inception phase, the market is immature and technologies are not well established etc. In the take-off phase financial institutions have increased knowledge of technology, a supply chain is in place etc. Governments play an important role in pushing the ADB to understand the renewable technologies, he said. A dedicated website for the Sub-regional Energy Forum is also in the making, he informed.
Romeo Pacudan continued giving an example of a Technical Assistance (TA) support, with funding from ADB, called "Promoting Renewable Energy, Clean Fuels, and Energy Efficiency in the Greater Mekong Subregion (GMS)". This TA is designed to provide direct support for the implementation of the GMS Road Map for Expanded Cooperation in the Energy Sector and supports sustainable economic growth; which is the core strategic area of ADB's Long Term Strategic Framework.
Mr. Jari Hietala, the Vice President, Head of Region-Asia, Finnpro, spoke on "Implementing Cleantech Projects in the Mekong Region". He started his presentation by giving a brief introduction about Finpro. He went on to describe Cleantech as all products, services, processes and technologies which are capabale of reducing or eliminating impacts of harmful actions on our environment.
Mr Jari confirmed that economic competitiveness is compatible with environmental sustainability. Finnpartnership, Finnfund and Concessional Credits are Finnish financing tools used in supporting developing countries's trade capacity, a key priority of Finnish Development Policy Program, said Jari.
