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Asian Development Bank

Asia Solar Energy Initiative (ASEI)


Seethapathy Chander Chair, Energy Committee and Co-Chair, Energy Community of Practice Asian Development Bank

FPF and Cooperation Funds ACM 2012 Manila, Philippines 12 March 2012

The opportunity: solar and land resources


Figure 1: Solar Irradiance in Asia (Map by 3TIER Inc.)
Large areas of Asia and the Pacific receive at least 1,400kWh/m2 /year of solar irradiance ideal for solar PV installations
Source: http://www.flickr.com/photos/22988688@N00/

The opportunity: solar and land resources


Figure 2: Distribution of non-polar arid land (Map by USGS)

The most suitable regions for utility-scale projects are deserts or otherwise degraded lands with little alternate use

The barriers: why the gap? Constraints and limitations:



Image source: http://www.smi-online.co.uk/

Grid accessibility and transmission issues Steep up-front costs of solar technology during transition stage High borrowing cost and lack of access to long-term capital Distorted risk perception of financiers Lack of enabling environment (e.g., clear regulatory signals, FIT and/or PPA regimes, creditworthy off-taker) Weak institutional capacity (e.g., lack of strategic capacity-building, training activities, and parallel R&D programs) Inadequate knowledge sharing leading to information and perception gaps

Some factors in distorted risk perceptions include lack of exposure to solar power generation projects among financiers, very few project-finance solar projects in the region, high dependence on subsidies, and inadequate insolation levels

Asia Solar Energy Initiative: bridging the gap with 3 GW in 3 YR ASEI overall objective:
Create a virtuous cycle of solar energy investments in Asia and the Pacific toward achieving grid parity for DMCs to benefit from a clean, renewable energy source

Strategic interventions:
Intervention Knowledge management Solar project identification and development Innovative financing (+ longterm debt financing) Flagship activity Asia Solar Energy Forum 3 GW solar power capacity by 2013 Asia Accelerated Solar Energy Development Fund (AASEDF) (+ ADB + other donor funds)

ASEI flagship: Asia Solar Energy Forum (ASEF) ASEF overall objective:
Help address barriers to, and accelerate the development of, solar energy in Asia and the Pacific through sharing and processing knowledge on technology, standards, experiences, policies, incentives, risk mitigation, long-term financing, and approaches to exploit economies of scale

Strategic interventions:
Knowledge sharing and consultations Policy and regulatory framework development Capacity development for local stakeholders

ASEI flagship: Asia Solar Energy Forum (ASEF) ASEF update:

1st Meeting, Manila, 5-6 Jul 2010: over 200 participants from 34 countries / territories 2nd Meeting, Tokyo, 1-3 Dec 2010: Over 300 participants from 38 countries / territories 3rd Meeting, Bangkok, 30-31 May 2011: 375 participants from 34 countries / territories 4th Meeting, Jodhpur, upcoming 24-25 April 2012 14 members (+ ADB) of the Preparatory Committee; 6 of 14 serve as interim Governing Board 80 membership applications received, comprising 45 regular and 35 associate members Founding Meeting concluded; charter and other legal documents signed; Certificate of Approval received from Tokyo Metropolitan Government ASEF Information Portal prototype developed

The decision to constitute the ASEF as a non-profit institution was arrived at during its inaugural meeting in Manila on 5-6 July 2010

ASEI flagship: 3GW by 2013 Solar Power Capacity Enabled


DMC
Bangladesh

MW
5.0 1.8 4.0 6.0 20.0 10.7 40.0 500.0 130.0

Description
Solar PV Wind-solar hybrid Solar home systems CSP Solar PV BIPV Solar PV Solar transmission Various solar investments Solar home systems Mini-grids Solar PV rooftop generation Solar PV

Total MW
10.8

Source: ADB estimates. BIPV = building integrated photovoltaic, CSP = concentrating solar power, DMC = developing member country, MW = megawatt, PV = photovoltaic

China, Peoples Republic of

36.7

India Lao Peoples Democratic Republic Philippines Thailand TOTAL

670.0

5.5
0.6 117.5

5.5
0.6 117.5 841.1

ASEI flagship: 3GW by 2013 Project gallery 1:


The 73 MW solar power plant in Lopburi, Thailand will produce enough electricity to power up to 70,000 homes

567-kW capacity rooftop solar power plant atop ADB headquarters in Manila, Philippines

ADB signed the loan for the construction of two solar power plants (9.43 MW and 34.5 MW) in Ayutthaya, Thailand, shouldering the back-end risk of the commercial bank facility through an innovative risk participation structure

ASEI flagship: 3GW by 2013 Project gallery 2:


2.2 MW building integrated PV project on Wuhan Citys railway station rooftop in Hebei Province, PRC

Installation of 6.5 MW of solar panels at the railway station of the Shanghai Hongqiao airport, PRC

10 MW solar PV power plants in Tiayangshan (top) and Shizuishan in the PRC

Photos by CECEP Solar (www.cecepsolar.com)

ASEI flagship: 3GW by 2013 Project gallery 3:


The Charanka Solar Park in Gujarats Patan district (India) is targeting an output of over 500 MW India Solar Generation Guarantee Facility mobilizes long-term funding to help India scaleup use of solar power as a major energy source The Dahanu Solar Power Project (India) is being constructed on vacant and barren public land, with little alternative use

ASEI flagship: AASEDF


Clean Energy Financing Partnership Facility (CEFPF)
Trust Funds Multi Donor CEF
ACEF * CCSF* AASEDF AASEDF Others
Usage
Goods and services Innovative financing mechanisms

Notes: AASEDF = Asia Accelerated Solar Energy Development Fund ACEF = Asia Clean Energy Fund CCSF = Carbon Capture and Storage Fund CEF = Clean Energy Fund

Framework Agreements
Investments / financing frameworks
Risk-sharing arrangements
e.g. credit guarantees with first loss coverage

Knowledge provision and exchange


e.g. secondments

Other arrangements for non-grant uses

Delivery Modality
Grant Component of Investments Technical assistance linked to loan Technical assistance Direct Charges Loans** Risk-transfer products** Guarantees**

* Coverage limited to capital grants for goods and services **For non-grant use of funds

* Coverage limited to capital grants for goods and services **For non-grant use of funds

ASEI flagship: AASEDF Potential uses under exploration:


Grant component of investment Technical assistance Concessionary financing Buy down of interest rates or guarantee fees (Partial) credit guarantees Political risk guarantees Other risk sharing mechanisms (e.g., insurance to backstop performance warranties, issue or reinsure projects) First loss provision Base public capital contribution for creation of a solar mezzanine debt fund Subordinated contingent loan Contingent credit facility (e.g., to backstop government FITs) Incentive mechanism (e.g., tariff shaping) Tariff adder to developers over first # of years Other innovative financing solutions aligned with ADBs operations, such as:
Currency swap support Cost recovery of resource assessments and common facilities Support for innovative and technological projects as models and living laboratories

Asian Development Bank

Thank You
Seethapathy Chander Chair, Energy Committee and Co-Chair, Energy Community of Practice Asian Development Bank <schander@adb.org>

FPF and Cooperation Funds ACM 2012 Manila, Philippines 12 March 2012

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