Putting a price on renewable capacity building

South East Asia has only around one gigawatt of clean energy operating assets (excluding large hydro) and various estimates have the ASEAN group of countries with a target of roughly 55 gigawatts of renewable energy production by 2030. That translates into an investment of more than $100 billion. That from Andrew Affleck in a wide ranging interview with Yvonne Chan in the February issue of Asian Investor. 

We cannot provide a full version of the article at this stage.

For a copy of the February issue of the Asian Investor and article please go to www.asianinvestor.net

Please request a pdf scanned copy of the article or visit www.armstrongam.com

The Renewable Energy Pipeline

It might be news to you that there’s a pipeline of about 15 deals at various stages of evaluation and negotiation for the Armstrong South East Asia Clean Energy Fund, with a corresponding funding requirement of over US$1 billion.

More quality deals are expected to be originated through our new strategic partnership with  Mandiri Investment Management (see first article below).

These are  examples of the sort of information you might miss if we don’t communicate directly and regularly with you, our project partners, investors and, in fact, all stakeholders and  those interested in the funding and development of renewable energy capacity in  the region. 

Just like we set out two and a half years ago to start this unique fund – which had its final close at $164 million last November -  we are now embarking on a communications process, not just to keep you up to date on what we’re doing, but to make sure you don’t miss out on items of interest from the world of renewable energy. 

We welcome your comments, input, ideas and news. You can also find us on Facebook and LinkedIn.

All ways to enable you to share in what we are doing and what we care about. We’ll keep our eyes out for what’s going on and we’ll continue to energise South East Asia in a clean, responsible fashion.

Here’s to a clean energy, low carbon future!                                             

                                                                                                                              Andrew Affleck

Mandiri Investment Management enters into co-investing partnership with Armstrong Asset Management

Investment to focus on the emerging hydro sector in Indonesia

9 April 2014 – Mandiri Investment Management Pte Ltd (“Mandiri Investment Management”) has entered into a co-investment arrangement with Armstrong Asset Management Pte Ltd (“Armstrong Asset Management”) to work together to invest in renewable energy projects in Indonesia.

Both companies will start their collaboration by focusing on the emerging hydro sector in Indonesia, in particular mini hydro-electric power plants.

Armstrong Asset Management is a Singapore-based private equity fund that invests in small-scale renewable energy and resource efficiency projects in Southeast Asia. In November 2013, Armstrong Asset Management closed a Clean Energy fund dedicated to the emerging markets of Southeast Asia with US$164 million of total commitments.

Mandiri Investment Management is a Singapore-based fund management firm that provides Indonesian focused investment funds to accredited investors. Its Indonesian parent company, Mandiri Investasi, currently manages about US$2 billion in various types of mutual funds and is a part of Indonesia’s largest banking group, Bank Mandiri.

Mandiri Investasi and Mandiri Investment Management are striving towards being the leading catalysts for the development of the renewable and clean energy sector, as Indonesia has a clear need for a more environmentally-friendly way to power its growth, according to Pak Muhammad Hanif, the CEO of Mandiri Investasi.

“Having a credible international partner like Armstrong Asset Management will help strengthen our intellectual capital as well as access to an additional pool of capital. We are looking forward to work together with people who share our passion to provide power to the people in a sustainable manner while preserving the environment for our children to inherit,” Mr Hanif said on the launch of the collaboration with Armstrong.

Michael McNeill, co-founder of Armstrong Asset Management said: “We are excited about the opportunity of working together with Mandiri Investment Management, as it shares our culture of good corporate governance, concern for the community and environment and focus on financial performance that has resulted in the Bank Mandiri Group becoming the Regional Champion that it is today.

“Together with Mandiri Investment Management”, Mr McNeill said, “we can mobilize private capital to catalyse the development of the renewable energy sector in Indonesia. We can help to make a positive contribution towards meeting the energy needs of the Indonesian economy on a long-term sustainable basis.”

About Armstrong Asset Management

Armstrong Asset Management is an independent asset manager, based in Singapore, focused on the clean energy sector in Southeast Asia’s emerging markets. Armstrong Asset Management invests in small-scale infrastructure projects and achieved a final close on its debut clean energy fund of US$164m in November 2013. Operating with a multidisciplinary team of investment professionals, all of whom possess deep sector knowledge and a collective 80 years of Southeast Asia operating experience, Armstrong Asset Management integrates strict environmental, social and governance compliance into its investment process to deliver tangible benefits and reduce risks for all of its stakeholders. www.armstrongam.com

About Mandiri Investment Management

Mandiri Investment Management is a subsidiary of Mandiri Investasi, Indonesia’s largest local fund management company with about US$2 billion of assets under management. It is also a part of Bank Mandiri, the largest financial institution in Indonesia. Leveraging on its deep understanding of the Indonesian market, a sizable deal flow from dealing with the major players in the economy, Mandiri Investment Management aims to produce an attractive return to its accredited investors while at the same time playing an important role as agent of development. www.mandiri-investment.com.sg

Presidential seal for solar plant project

The 50 MW solar power plant being initiated by 1Malaysia Development Bhd (1MDB) has secured a tariff rate of somewhere between 40sen to 46sen per kWh, lower than existing tariff for electricity generated by solar plants, according to an online report in The Star. At the same time it was announced that the relevant parties were working to put this agreement together in time for it to be announced during the visit by United States President Barack Obama to Malaysia this month (April).

The Star Online Business News 17 March 2014

Solar plant deal expected to be signed during Obama’s visit next month

by Risen Jayaseelan and Leong Hung Yee

PETALING JAYA: The mega solar power plant being initiated by 1Malaysia Development Bhd (1MDB) has secured a tariff rate of somewhere between 40 sen to 46 sen per kWh.

The rates are lower than existing tariff for electricity generated by solar plants. However it cannot be determined if that is the best rate with present technology because it is learnt that it is a directly negotiated exercise.

The planned 50MW solar farm to be built in Kedah, was the result of a via a “direct negotiation” with the Government, sources said. It will also become by far the largest in the country.

Sources said the relevant parties were working to put this agreement together in time for it to be announced during the United States President Barack Obama planned visit Malaysia next month.

The technology provider for 1MDB’s power plant was a US-based company, the sources said.

It is also understood that 1MDB’s power plant agreement with the Government has come about as a result of direct negotiations between 1MDB and the Energy, Green Technology and Water Ministry, with both the Energy Commission and the Sustainable Energy Development Authority (Seda) playing a smaller role.

Seda is the body overseeing the country’s renewable energy push and had devised the feed-in Tariff (FiT) rates, that enables companies and house owners to produce renewable energy from sources such as solar and sell it to the country’s electicity grid.

1MDB’s FiT rates of between 40 sen to 46 sen seem in line with Seda’s pricing trends.

It is much lower than what the first generation of applicants secured back in Jan 2012, when Seda awarded a tariff of 95 sen per kWh for farms with a size of 1MW to 10MW. For allocations under the 10MW to 30MW category, the rates then were 85 sen per kWh.

Seda’s FiT rates have been designed to be reduced to reflect the declining trend of solar (and other renewable energy types) equipment and technology.

Under its latest revision in Jan this year, the FiT rates for solar were reduced to 60.8 sen (for the 1MW to 10MW category) and to 54.4 sen (for the 10MW to 30MW category).

It is clear that due to economies of scale, larger capacity solar farms get a lower tariff rate.

“Hence 1MDB’s rates do seem in line with Seda’s rates,” said an industry observer.

A recent report by a business weekly that first reported on 1MDB’s planned solar farm, had noted that the move would help diversify the government fund’s power generation portfolio that it plans to list in the near future.

The report also noted that 1MDB would have to compete for grid priority to generate power, considering that its scheme does not come under Seda’s FiT.

Source: www.thestar.com.my

Philippines gains new lending portfolio

The International Finance Corporation (IFC) of the World Bank Group and Europe’s Thomas Lloyd Group Ltd inked a mandate-letter for the provision of US$330-million lending portfolio for renewable energy (RE) projects in the Philippines, the Manilla Bulletin reported 5 March.  It noted that the facility “will augment the $87 million of development and construction capital already deployed or committed by the Thomas Lloyd Group of Companies and the Thomas Lloyd Cleantech Infrastructure Fund.” Read More

IFC, Thomas Lloyd set $330-M lending facility for RE projects

Manila Bulletin – 5 March 2014

The International Finance Corporation (IFC) of the World Bank Group and Europe’s Thomas Lloyd Group Ltd. have inked a mandate-letter for the provision of $330-million lending portfolio for renewable energy (RE) projects in the Philippines.

This will be in the form of senior debt through the managed co-lending portfolio program and other associated IFC funding facilities.

A press statement noted that the facility “will augment the $87 million of development and construction capital already deployed or committed by the Thomas Lloyd Group of Companies and the Thomas Lloyd Cleantech Infrastructure Fund.”

The credit window provided by both lending institutions, as emphasized, “will be used to construct and operate a portfolio of three solar facilities and three biomass facilities” in Negros.

IFC and Thomas Lloyd Group said the transaction could be a platform for expanding investments in the Philippine renewable energy sector.

According to Thomas Lloyd executive director and head of project finance Tony Coveney, “the Philippines provided a great opportunity for both us and the IFC to bring permanent jobs and sustainable energy supply to the country,” stressing further that such initiative could hopefully bring power supply to somehow-neglected local communities.

Considerably, RE is a sunshine industry with some promise to augment the country’s teetering power supply and solution to many blackout ridden off-grid areas.

IFC had indicated serious interest to bankroll RE projects in the Philippines, although at some point, it raised reservations when government had been fickle on its rules-crafting and policy enforcements.

Thomas Lloyd, for its part, has been advising and financing development of RE facilities in the country for the past five years already.

Its “lending fingerprints” had been etched on the 22-megawatt solar power project of San Carlos Solar Energy Inc., which is targeted for completion this month. “This will be the first utility-scale renewable energy project built in the country to take advantage of the feed-in-tariff introduced by the government under the Renewable Energy Act,” the European investment firm averred.

ThomasLloyd was also instrumental in financing the 19.99MW biomass power facility of San Carlos Biopower Inc., another project vehicle under Bronzeoak Philippines.

From this venture, several more renewable energy projects are expected to take off, especially those already blueprinted in Negros sites.

Source: www.ph.news.yahoo.com/ifc-thomas-lloyd-set-330-m-lending-facility-161637710.html

IPPC Report to drive capital investment in Clean Tech

The compelling conclusions from the latest United Nations report on climate change are likely to spur a wave of corporate investment, capital partnerships and bonds in the infrastructure, energy, water and agriculture sectors, James Cameron (pictured) , non-executive Chairman of Climate Change Capital, told Clean Energy Pipeline. Intergovernmental Panel on Climate Change report (31 March ) warned of an increase in violent conflicts, inequality, food shortages, droughts, flooding, heat waves and infrastructure damage if global temperatures continue to rise at current rates. Read More

INTERVIEW by Jessica Mills-Davies in Clean Energy Pipeline:

IPCC report to drive capital partnerships, bonds and corporate investment in cleantech

1 April 2014

The compelling conclusions from the latest United Nations report on climate change are likely to spur a wave of corporate investment, capital partnerships and bonds in the infrastructure, energy, water and agriculture sectors, James Cameron, non-executive Chairman of Climate Change Capital, told Clean Energy Pipeline today.

The report, released yesterday and delivered by the UN’s Intergovernmental Panel on Climate Change (IPCC), warned of an increase in violent conflicts, inequality, food shortages, droughts, flooding, heat waves and infrastructure damage if global temperatures continue to rise at current rates.

The verdict followed an IPCC report released last September that said scientists are 95% certain that human beings have been the dominant cause of climate change since the 1950s. The latest report concluded that “human interference with the climate system is occurring,” which the IPCC said, “poses risks for human and natural systems”.

The IPCC cited ‘high confidence’ that climate change was to blame for melting glaciers and some of the extreme weather events seen across the world over the past year. It also cited emerging evidence of the impacts of ocean acidification.

“The conclusions are reliable and hopefully dependable,” said Cameron. “Can you imagine anyone doing [such an exhaustive investigation] for finance? Anybody who makes decisions in the more affected areas should read the document.”

Cameron forecast that the report findings will boost innovation in new clean energy technologies, as investors and companies alike identify new opportunities for innovation in order to adapt to the carbon emissions risks associated with fossil fuels and high energy-consuming industries.

“This will encourage a reappraisal of risk, particularly in energy,” Cameron said. “For all investors, there is something to be [gained]. The fact we have underestimated the risk associated by fossil fuels is [likely] to command more attention.”

Corporate investment in the clean energy sector is also likely to increase as companies look to decrease their exposure to risks associated with climate change, which poses material threats to infrastructure that manifest in capital expenses.

The IPCC report, which will be followed by a supporting document in the summer, is likely to have a direct impact on the international United Nations climate negotiations due to take place in Lima, Peru, and Paris, France, over the next 21 months.

Climate Change Capital is involved in another UN climate change summit due to take place in September 2014 that will link investors to governments in a bid to develop new financing structures for climate mitigation technologies.

“If, in September, you get commitments to deploy capital in a more resource efficient economy, it will come in the form of bonds and new corporate structures to restructure existing companies,” said Cameron. “All are likely in the next few years.”

Although the IPCC’s findings will likely shape future energy policies, Cameron insisted that legislation is not necessary for investment in the sector. He predicted that investors are likely to experience the greatest shift as a result of the findings, as they become drawn to lower-risk assets and technology.

“Funding opportunities have to be acted on with optimism,” he said. “[We are likely to see a substantial] change in finance coupled with technology and market demand. Markets can be built by governments, but they have to be alluring. More investment is needed in both technology and marketing.”

Cameron highlighted that cleantech requires new financing structures to replace scarce and outmoded venture capital and private equity contributions.

“It’s true that the private equity sector has suffered several blows,” Cameron said. “I’m thinking of corporate direct investing and more capital partnerships. [Money will be deployed] in water, [agriculture] and infrastructure to make it able to cope with climate change. A better energy system can be created.”

He predicted that bonds will also be increasingly used in the infrastructure and energy sectors, in addition to a rise in capital partnerships and future innovation in finance structures used to support the sector.

“I think more finance [structures] will emerge,” he said. “People will think in an instrumental way. Where are the resources? Where is capital and where do I deploy it? Demand in assets will have to change. There are a lot of costs associated with how capital is managed.

“There will be more special purpose vehicles and corporates investing alongside other corporates. It’s happening. Expect more to happen. It’s evolving now. You can sense the will, but it’s difficult to break a pattern in finance.”

Source: www.cleanenergypipeline.com and www.climatechangecapital.com

PV reaches critical mass towards mainstream power

Recent indicators show PV reaching a critical mass that might enable it to be considered a mainstream power generation source in many parts of the world. Solar may have accounted for just 0.6% of global electricity generation in 2012, but there are signs that PV could soon be entering into the mainstream. Read More

PV reaches critical mass towards mainstream power

By Jason Deign in PV Insider on 18 March 2014

Recent indicators show PV reaching a critical mass that might enable it to be considered a mainstream power generation source in many parts of the world.

Solar may have accounted for just 0.6% of global electricity generation in 2012, but there are signs that PV could soon be entering into the mainstream. Analysts and observers are predicting a solar explosion as PV hits grid parity in many markets around the world.

The global market for PV grew by around 30GW a year in 2011 and 2012, leading to a total installed base of about 100GW by the beginning of 2013. According to Bloomberg New Energy Finance, last year saw the addition of another 39GW, led by China with 12GW.

That is just the start. Deutsche Bank expects 46GW to be installed this year and 56GW in 2015, adding up to around 250GW worldwide by the start of 2016. The main reason for this is that PV is now at grid parity in at least 19 global markets, according to reports.

In Germany, for example, The Fraunhofer Institute last November claimed rooftop solar was already competitive with combined-cycle gas generation. The Institute expects utility-scale PV to beat all fossil fuels, including coal, in Southern Germany by 2030.

And in Spain, where PV accounted for 3.2% of total electricity production in 2013, a developer called Enerpro has started selling solar energy directly to the grid without any form of financial support.

This year the developer is aiming to install 12MW of PV for sale direct to the Spanish power market and has plans to scale up to around 300MW next year, believing it can deliver electricity more cheaply than other production sources in the country.

Solar panel costs

“Today a solar panel costs in the order of 80% less than just five years ago,” notes José Luis García Ortega of Greenpeace Spain, in a blog posting for the pressure group published this February. “And it is envisaged that costs will fall another 50% up until 2020.”

At the same time, banks expect solar financing to open up throughout this year. The investment bank Goldman Sachs, which has a USD$40bn war chest for renewable energy investment, has already put cash into SolarCity, First Solar and SunEdison.

Meanwhile Mercom Capital Group, a clean energy consulting firm, says total corporate funding into the solar sector, including venture capital (VC), debt and public market financing, was up 25% in 2013, to almost $10n from $8bn in 2012.

“While venture funding levels were down, overall fundraising was up and public market financings were really strong in 2013,” observed Raj Prabhu, Mercom’s chief executive.

“Higher valuations among public solar companies have opened up the capital markets again as an avenue for fundraising at attractive terms.”

The top five VC-funded companies in 2013 were the Chinese solar project developer Heifei Golden Sun Technology, distributed PV financier Clean Power Finance, crystalline-silicon (c-Si) module maker Solexel, installer Sungevity and residential system specialist OneRoof Energy.

Improved financing

This combination of lower cost and improved financing is setting the stage for steady growth in PV penetration.

MJ Shiao, director of solar research at GTM Research, says: “We expect there to be more than 146MW of cumulative megawatt-scale PV installations by 2017, representing more than triple what it is today.”

Thereafter, PV is expected to start becoming competitive in some of the biggest power markets in the world.

In India, for example, solar should be able to “genuinely compete with conventional power generation” by around 2020, according to Jasmeet Khurana, head of market intelligence at the analyst firm Bridge to India. “Solar has already become attractive to large power consumers.”

He adds that PV will hit the mainstream in India “when all power consumers, including those below 1MW, can start using their rooftops to generate power which helps them save on their bills.

Mainstream market

“The first steps towards net metering and a favourable regulatory regime are already being taken by some states. However, it will still take at least three to four years for this mainstream market to take off.”

Finally, Lux Research estimates that by 2025 PV will be competitive with natural gas in 10 major regions. For Lux Research associate Ed Cahill, the point at which a generation source can compete without subsidies is a key attribute of mainstream adoption.

As to what proportion of total generation PV could achieve, he says: “It can’t ever be 50%. You need some base load. In a mature grid, 10% to 20% maximum solar is sensible, in addition to wind. Even so, solar is a success at 10%.”

And the good news is that while this forecast growth will mainly be tapped by c-Si, there should be opportunities for all PV technologies.

Indeed, as recent headlines have shown, CPV is already bouncing back with eye-popping cost reductions, while thin film is making strong headway in new markets such as South Africa. The best, as they say, is yet to come.

Source: www.news.pv-insider.com

Wind blows back into Germany’s “Energiewende”

Germany’s regional states succeeded in watering down the Federal Government’s plans for cuts in future wind energy projects in conjunction with a landmark renewable energy law reform, Economy Minister Sigmar Gabriel and state leaders said early April. Chancellor Angela Merkel, who took part in the four-hour meeting said: “We’ve reached a high degree of unity,” in getting right the country’s “Energiewende”, or transition to renewable energy, which will be one of the most important challenges of her right-left grand coalition government. Read More

Merkel agrees to more turbines

Reuters and Climate Spectator 2 April 2014

Germany’s regional states succeeded in watering down the federal government’s plans for cuts in future wind energy projects in conjunction with a landmark renewable energy law reform, Economy Minister Sigmar Gabriel and state leaders said on Tuesday.

Reflecting the significance of the talks, Chancellor Angela Merkel took part in the four-hour meeting in the chancellery late on Tuesday and said the consensus agreement between the state and federal governments formed a good basis for reform.

“We’ve reached a high degree of unity,” said Merkel, who has said getting right the country’s “Energiewende”, or transition to renewable energy, will be one of the most important challenges of her right-left grand coalition government.

“We’ve succeeded in taking a giant step forward in making the ‘Energiewende’ a success,” she added.

The government wants the energy reform measures to pass through the lower house of parliament within weeks and even though approval from the upper house, or states chamber, is not needed, its backing will mean smoother sailing for a reform that they hope will become law by August.

“This is a good day for wind energy in Germany,” said Torsten Albig, the state premier of Schleswig-Holstein, who had fought hard to blunt reductions in offshore wind energy expansion in the years ahead.

Under the agreement, the federal government will allow more flexibility for new offshore wind energy plants by permitting up to 1.2 gigawatts more capacity by 2020 on top of the 6.5 gigawatts already applied for.

Under Gabriel’s previous plan, only 6.5 GW of offshore wind energy could be added by 2020 and if one or more of the approved projects were not built, the upper limit would be reduced accordingly. Now the upper limit will be more flexible so that at least 6.5 GW can be added.

Gabriel also backed down on another key demand by the states. The annual upper limit for onshore expansion is 2.5 GW. The states wanted him to be more flexible and allow new capacity beyond 2.5 GW to be added if existing wind power plants are torn down.

Gabriel is trying to reform the way Germany supports its growing green industries that derive power from sources such as wind and solar, as costs have spiralled higher, burdening private consumers in particular.

Any solution needs to suit the European Commission and German industry, which criticised plans to make them pay the surcharge and share the burden of the country’s move to more renewable energy. Germany gets a quarter of its electricity from renewable sources and wants to raise that further by 2020.

The reform, closely watched by power markets, will go before the cabinet on April 8 and could become law in August. Germany’s shift to green energy and away from nuclear power and fossil fuels is one of Merkel’s flagship policies but the cost of ballooning subsidies is threatening to undermine it.

The reform is aimed at scaling back incentives. The Commission – the EU executive – has said German industrial discounts on green surcharges, worth 5.1 billion euros in 2014, might be justified to keep energy-intensive firms in Europe, but it had concerns.

Source: www.businessspectator.com.au

Light of day for UN’s Sustainable Public Procurement (SPP)  

Indian Railways replaced more than one million incandescent light bulbs with  energy-efficient fluorescent lamps in 400,000 employees’ homes, saving more than 100,000 megawatts of energy and reducing carbon dioxide emissions by 90,000 tonnes each year. An example of what can be achieved through a new United Nations Sustainable Public Procurement (SPP) global programme which was launched in New York 1 April which aims to harness the trillions of dollars that governments spend each year on procurement of everything – from computers to food to travel – to fund a more resource-efficient, low-carbon world. Read More

NEW YORK April 1, 2014 (ENS) – A new global program was launched today that aims to harness the trillions of dollars that governments spend each year on procurement of everything – from computers to food to travel – to fund a more resource-efficient, low-carbon world.

The new Sustainable Public Procurement Programme aims to help governments redirect public spending to purchase goods and services that bring environmental and social benefits by expanding knowledge and access to experts and tools.

The initiative is co-led by the UN Environment Programme, the Korea Environmental Industry and Technology Institute, and ICLEI – Local Governments for Sustainability.

UNEP Executive Director Achim Steiner explained how public procurement can amount to trillions of dollars a year. “The Organization of Economic Co-operation and Development nations spent an average 13 percent of Gross Domestic Product on public procurement in 2011, while in some developing nations this can hit 20 percent. This adds up to trillions of dollars globally, demonstrating the scale of the opportunity ahead.”

“Governments can use this potential to lead markets onto a sustainable path by demanding goods and services that conserve natural resources, create decent green jobs, and improve livelihoods around the globe,” said Steiner.

The Sustainable Public Procurement Programme is supported by the European Commission, the Swiss Federal Office for the Environment, the China Ministry of Environmental Protection, South Korea, ISEAL Alliance, the Organization for Economic Co-operation and Development, the Swedish Ministry of the Environment, and the U.S. Environmental Protection Agency.

In the United States, where the federal government buys goods and services worth more than $500 billion a year, the federal government has incorporated sustainability requirements into purchasing regulations. Nearly all new contracts must be for products and services that are energy-efficient and water-efficient, environmentally preferable, non-ozone depleting, and contain recycled content.

Chevy Volt

The U.S. government purchased more than 100 electric cars for lease to 20 agencies in five cities, 2012. (Photo by Michelle Farrell courtesy U.S. General Services Administration)

The Sustainable Public Procurement Programme is the first in a host of actions to be taken this year as part of the 10-Year Framework of Programmes on Sustainable Consumption and Production, 10YFP.

The 10YFP was established after world leaders at the UN’s 2012 conference on sustainable development, Rio+20, agreed that sustainable consumption and production is a cornerstone of sustainable development, poverty alleviation and the transition to low-carbon and green economies.

Gino Van Begin, secretary general of ICLEI, which represents cities and municipalities around the world, describes how 10YFP can be effective. “If public money is spent on products and services that reduce environmental impacts, encourage social improvement and achieve financial efficiency,” he said, “a huge step forward could be made towards sustainable development. This is what the 10-Year Framework Programme on Sustainable Public Procurement aims to achieve.”

The Republic of Korea, usually called South Korea, has installed sustainable public procurement policies for the near future.

“The Republic of Korea has gained strong expertise in the implementation of green public procurement based on an electronic monitoring system over the past 10 years,” said Yongjoo Kim, president of KEITI. “We wish to contribute to the program, in close partnership with UNEP and ICLEI, by identifying and disseminating good practices.”

Existing initiatives demonstrate that sustainable procurement transforms markets, boosts eco-industries, saves money, conserves natural resources and fosters job creation.

For instance, India’s latest procurement policy makes it mandatory for central government offices to source 20 percent of everything that they need from micro and small businesses.

Indian Railways replaced more than one million incandescent light bulbs with energy-efficient fluorescent lamps in 400,000 employees’ homes, saving more than 100,000 megawatts of energy and reducing carbon dioxide emissions by 90,000 tonnes each year.

In Brazil, the Foundation for Education Development saved 8,800 cubic metres of water and 1,750 tonnes of waste by using notebooks made from recycled paper in Sao Paulo schools.

In France, a contract for the purchase of toner cartridges was awarded to an organization that, between 2009 and 2011, recovered 11,500 kilograms of waste, saved the government 30 percent in costs and created nine full-time jobs for disabled people.

Chile’s public procurement and contracting bureau set a target of 15 percent of procurement orders meeting sustainability targets by 2012. This goal was fulfilled a year ahead of schedule. The bureau oversees US$8 billion in transactions, accounting for more than 3.2 percent of GDP.

In Japan, where government agencies spend US$672 billion a year, or 17.6 percent of GDP, green purchasing laws now require ministries, provisional governments and an increasing number of cities to make 95 percent of their purchases from designated “green product” categories.

By working to ensure such purchasing decisions are the norm, not the exception, the Sustainable Public Procurement Programme aims to play a vital role in transitioning the globe to an inclusive green economy.

The launch comes ahead of the first UN Environment Assembly set for June 23-27, when the world’s environment ministers will meet to discuss the post-2015 Sustainable Development Agenda, with a special focus on sustainable consumption and production.

“A rapid transformation, which will support the post-2015 Sustainable Development Agenda, is eminently possible,” said Steiner. “Governments from across the globe signed up to the UNEP-led Sustainable Public Procurement Initiative at Rio+20, and are backing this commitment with action. This demonstrates that the political will is already in place.”

Source: www.ens-newswire.com

Africa: Dedicated Fund for Small to Medium Renewable Projects

The African Renewable Energy Fund (AREF), a dedicated renewable energy fund focused on Sub-Saharan Africa closed on 12 March with US$100 million of committed capital to support small- to medium-scale independent power producers (IPPs). Headquartered in Nairobi,  the fund is targeting a final close of US $200 million within the next 12 months to be invested in grid-connected development stage renewable energy projects including small hydro, wind, geothermal, solar, biomass and waste gas.

African Renewable Energy Fund (AREF) Launches With $100m Committed Capital

All Africa News 13 March 2014

The African Renewable Energy Fund (AREF), a dedicated renewable energy fund focused on Sub-Saharan Africa closed on Wednesday, March 12, 2014 with US $100 million of committed capital to support small- to medium-scale independent power producers (IPPs).

The fund, which will be headquartered in Nairobi, is targeting a final close of US $200 million within the next 12 months to be invested in grid-connected development stage renewable energy projects including small hydro, wind, geothermal, solar, biomass and waste gas.

Initially promoted in a joint initiative by the African Biofuel and Renewable Energy Company (ABREC) and the African Development Bank (AfDB), AREF will be managed by Berkeley Energy Africa Limited (Berkeley Energy), a fund manager focused on developing and investing in renewable energy projects in emerging markets. The fund will target IPPs with an ideal size of between 5 and 50 MW and a commitment per project of between US $10 million and US $30 million, with the capacity to source further funding from co-investors where necessary for a larger investment.

Africa Development Bank is the fund’s lead sponsor, bringing US $65 million in an equity investment package from its statutory resources as well as climate finance instruments such as Sustainable Energy for Africa (SEFA) and the Global Environment Facility (GEF) to leverage commercial and institutional investment. SEFA will additionally fund a Project Support Facility (PSF), which will provide resources to be deployed at an early stage to structure bankable deals.

“Over the past decade, the AfDB has established itself as a prime catalyst for renewable energy investment on the continent and is currently hosting the Africa Hub for the Sustainable Energy for All (SE4All) initiative. As Africa’s largest infrastructure finance partner, we understand the value of supporting both large-scale and small-scale projects as part of our strategy for Africa to promote inclusive and sustainable growth,” said Gabriel Negatu, AfDB Regional Director for the East Africa Regional Resource Center.

The investor group also includes West African Development Bank (BOAD), Ecowas Bank for Investment and Development (EBID), Nederlandse Financierings-Maatschappij voor Ontwikkelingslanden N.V. (FMO), Calvert Foundation, Berkeley Energy and ABREC, who are the vision-bearers of the fund.

Owned by 15 African Nations and five financial institutions, ABREC is a company specialized in developing, managing and advising public and private sector renewable energy and energy efficiency initiatives and projects.

ABREC’s CEO and Chairman Thierno Bocar Tall said, “ABREC is proud to have its vision of an African renewable energy fund become reality. This initiative, on which AfDB, Berkeley Energy and ABREC have worked closely together, is a significant milestone for realizing the potential of renewable energy in Sub-Saharan markets. AREF, as a private sector investment initiative, is a key component of ABREC’s strategy that includes investment, development and advisory activities in relation with renewable energy projects across Africa.”

AfDB selected Berkeley Energy as the fund manager of AREF following a competitive procedure. Berkeley Energy, based in Mauritius, will have operational headquarters in Nairobi and a further office to be situated in West Africa. The Berkeley Energy team and investment committee comprises Managing Partner TC Kundi; Partner Alastair Vere Nicoll; Chairman Andrew Reicher; Investment Director and AREF lead Luka Buljan; and Investment Committee members Thierno Bocar Tall, Chief Executive Officer of ABREC; and Eddie Njoroge, former Chief Executive Officer of Kenya Electricity Generating Company (Kengen).

Berkeley Energy’s Managing Partner TC Kundi said, “We are extremely pleased to have been entrusted this mandate by the AfDB and the other catalytic investors in the first close of AREF. The launch of a first pan-African dedicated renewable energy fund, with a centre of gravity in Africa, sourcing a majority of its capital from Africa at an exciting time in the evolution of macro-economic factors in Africa’s favour, presents a propitious environment for the investment of AREF. We aim to use Berkeley Energy’s technical and financial experience to ensure that a part of Africa’s growing need for power is met through responsibly developed clean energy projects that improve the generation mix and maximize the use of local resources”.

FMO’s CEO Nanno Kleiterp said, “FMO is proud to be a first close investor in the Africa Renewable Energy Fund and delighted to see that the Fund has achieved First Close at $100 million. This milestone means that more risk capital is available for renewable energy projects in Sub-Saharan Africa, which is fully in line with FMO’s investment strategy. FMO has an excellent relationship with Berkeley Energy, the AREF Fund Manager, through our investment in Berkeley’s Renewable Energy Asia Fund. We believe Berkeley is well placed to play a leading role in further developing the nascent, but vibrant renewable energy sector in Africa. We are also impressed with the leading role the African Development Bank played in promoting the Fund, which brings together private and public investors from Africa, the United States and Europe in an exciting First Close.”

For Bassary Touré, Vice-Chairman of BOAD, “Populations’ access to clean and renewable energy sources is one of the key objectives set by BOAD. Hence, this equity investment in AREF’s capital will help increase BOAD’s action in the area.”

EBID Director for Private Sector Operations Ousmane Bocoum said, “The investment and development bank of the CEDEAO (BIDC) is the financial arm of the CEDEAO. In fact, the Africa Renewable Energy Fund (AREF) initially was a joint initiative of the CNUCED and BIDC, who together decided to create an instrument exclusively dedicated to the financing of energy renewable projects. That initiative, through the African Biofuel Renewable Energy Company (ABREC) and the AfDB, led to the establishment of the African Renewable Energy Fund, which we are now proceeding to launch. It is therefore as the initiator of this great idea that BIDC is very happy to see the conclusion of this project and delighted to participate in the launch event today. Full of hope for the future of our fund, we wish the AREF team the very best. We are certain that Berkeley Energy, our manager, will know how to overcome all the challenges.”

Source:  www.allafrica.com