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The views expressed in this presentation are the views of the Asian Development Bank (ADB) staff and DO NOT necessarily reflect the views or policies of the ADB, its Board of Director or the Governments they represent.
12th FYP targets 5 GW solar power development with demonstration of CSP projects. (renewable energy share in the energy mix [11.4%])
Source: IEA
12th FYP targets 5 GW solar power development with demonstration of CSP projects. (renewable energy share in the energy mix [11.4%])
Status of CSP
PRC
Global
Considerable Tariff reduction can be materialized after 2012 Cost of financing would play a catalytic role in reducing
generation cost
Source: A.T. Kearney
Fossil fuel plants: the risk of significant fuel price variation during the concession period (25 30yrs) Solar power plants: No fuel costs during the lifespan (less uncertainty) Fuel cost through capital investment at the beginning of the project The cost of power from solar power projects is particularly sensitive to financing conditions (interest rate) and schedules (repayment/grace periods) periods).
Debt Liquidity is reduced within all banks On-hold approach On hold Cost of lending rose substantially Reduced volumes of financing Reduced tenors: from 15yrs to 7-10yrs New players & technologies found accessing debt very difficult
Equity Reluctant to invest Difficult to access competitive financing, with lower Leverage & higher rates.
Public source of financing has had a very important renewed role i renewable energy fi d l in bl financing i
Source: A.T. Kearney
ADB
IDC Interest rate Repayment Period Grace Period Deb/ Equity 2.06% 3.26% 20 3
Domestic
6.10% 6.60% 15 0 80 / 20
Project s Projects financial viability highly sensitive to cost of financing. It can lower the required tariff by 22% for the same return (ROE: 10%)
High leverage" and low risks with lower rate Play a critical role not only in improving the financial performance but also providing valuable insight into challenges, and risks thereby assisting provincial and national governments in formulating practical policies and programs. ADB even provides up-front financing of CDM transaction costs
Asian Solar Energy Initiative: targeting to assist the identification, development and implementation of 3,000 3 000 MW of solar power i th A i P ifi region f l in the Asia Pacific i over the next 3 years ADB has gained insight into challenges and risks through an ongoing TA ($1 M) and 1 MW pilot project Financing to 50MW Jinta CSP project: up to $120 M
Conclusion
CSP will become new alternative drivers for sustainable development along with other renewable energy resources. CSP project is highly sensitive to low-cost and favorable financing conditions Early demonstration through low-cost ADB loan can accelerate wider deployment of CSP in PRC
Further Information: Mr. Mr Woo Yul Lee Young Professional (Energy) Asian Development Bank Tel (632) 683 1803 Fax (632) 636 2302 wylee@adb.org