Green Green:  financing news for the U.S. geothermal industry


Volume 1, Number 1
March 31, 2000

HOT NEWS

Innovative Financing E-Newsletter for the Geothermal Industry Launched

2nd Edition of the Geothermal Financing Workbook now available

U.S. Department of Commerce Kicks off International Clean Energy Trade Initiative

REEF Open for Business

REGULAR FEATURES

Geothermal Project Pipeline

Upcoming Events

Talk Back

Innovative Financing E-Newsletter for the Geothermal Industry Launched

Welcome to the inaugural issue of Green Green, the financing electronic newsletter (e-newsletter) for the U.S. geothermal industry. The innovative bimonthly e-newsletter will provide a direct connection between the geothermal industry and financing sources. Each issue will feature the latest news of interest to the industry, including:

  • new financing sources and programs;
  • staff changes;
  • multilateral development bank (MDB) and other financing source projects; and
  • upcoming events

Green Green will also seek to identify and respond to geothermal project developers' specific financing needs and challenges. We welcome your comments and suggestions in Talk Back.

Green Green was created by Bob Lawrence & Associates, Inc. with support from the Idaho National Engineering & Environmental Laboratory (INEEL) and the U.S. Department of Energy Office of Geothermal and Wind Technologies.

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2nd Edition of the Geothermal Financing Workbook now available

The 2nd edition of the Geothermal Financing Workbook is now available from INEEL.

Written by Bob Lawrence & Associates, Inc., the Workbook is a "financial primer," giving small and medium-size U.S. geothermal companies

GFW, 2nd ed. cover
the tools they need to identify, structure, and obtain financing for smaller (less than 30 MWe) international geothermal projects.

In addition to sections on Project Financing, Basic Financial Analysis, and How to Work with the MDBs, the 2nd edition of the Workbook includes detailed financing data on 30 financing sources including funds available, investment made to date in geothermal projects, types and forms of financing, financing structure, application procedure, key contacts, and web sites.

To obtain a copy of the Workbook, contact Joel Renner at INEEL.

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U.S. Department of Commerce Kicks off International Clean Energy Trade Initiative

The U.S. Department of Commerce (DOC), led by Alan Bowser, Deputy Assistant Secretary for Basic Industries, with support from Roger Ballentine, Deputy Assistant to the President on Environmental Affairs and other members of the White House staff, kicked off the International Clean Energy Trade Initiative at a White House meeting on March 28, 2000.

The Clean Energy Trade Initiative will promote the the United States as the premier source of clean energy, clean energy technology, equipment, and services -- including renewable energy -- in the world.

DOC's aggressive trade promotion program supports the Administration's goal of doubling U.S. clean energy exports to $10 billion and creating at least 100,000 new jobs for U.S. workers by 2005.

The program will initially focus on five key clean energy markets: China, India, Indonesia, Mexico, and Brazil. Trade missions scheduled for 2000 include:

  • Indonesia - August 29-30
  • Mexico - September 10-14
  • Russia - October 15-21
  • Persian Gulf - October 24-November 1
  • India - November TBD
  • Brazil - November 5-9
  • China - November 20-24
  • South Africa - November 13-17

Each trade mission will be comprised of 25 small, medium, and large clean energy U.S. companies. The participation fee, which does not include airfare, hotels, and meals, is $3000-$3500 per trade mission.

Working with partner organizations including the U.S. Agency for International Development (USAID), the U.S. Department of Energy (DOE), and the U.S. Trade Development Agency (TDA), DOC will seek ways to enable smaller companies to participate in the trade missions.

For additional information, contact the Office of the Deputy Assistant Secretary for Basic Industries, Energy Division, the U.S. Department of Commerce at Tel: (202) 482-4931, Fax: (202) 482-0170, or see their Web site.

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REEF Open for Business

The Renewable Energy and Energy Efficiency Fund (REEF), a commercial US$100 million equity investment fund created by the International Finance Corporation (IFC) to support renewable energy and energy efficiency projects, is now open for business.

The REEF is supported by a US$100 million IFC-lead loan facility, and a US$30 million concessionary funding facility from the Global Environment Facility, and has a three-tier structure:

  1. REEF Equity Fund - US$100 million
  2. REEF Grant Facility - US$30 million
  3. REEF Debt Facility - IFC A/B Loans - US$100 million

The REEF will invest primarily in commercial scale energy generation and efficiency projects, in which it will typically take a significant minority interest. Its primary focus is project finance, equipment finance, and credit lines but it will also consider venture investing and development financing. The privately managed REEF is a closed end investment fund with a 10-year life and a target Internal Rate of Return (IRR) of 20+%.

The maximum total project size is $100 million. Thanks to the support of the GEF grant funds, the REEF will also consider investments in smaller scale projects and enterprises which show strong indications of commercial viability. Enterprises with total capital costs as small as $1 million are eligible for investment consideration by the REEF.

The Fund is led by an IFC-selected management team:

  • Energy Investors Funds (EIF) Group - Will provide lead management, Email: Ken Locklin
  • Energy House Capital Corporation - will provide off-grid and grant management (an E&Co subsidiary), Email: Dr. Michael Allen;
  • Environmental Enterprises Assistance Fund (EEAF) - will provide small on-grid expertise, Web site: Brooks H. Browne; and
  • Dresdner Kleinwort Benson - will assist IFC as the REEF debt fund advisor, and will provide or secure the matching “B” loan commitments, Contact: Andrew Schroeder, New York.

The REEF's founding investors include IFC, Nuon, Alliant, DEG, Finnfund, VMH, and John Hancock.

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Geothermal Project Pipeline

The following projects are in various stages of development.

Country Project Name Financing Source US$ (million) 
Colombia Feasibility of Azufral Geothermal Field (TC9706344)

Spanish
Inter-American Development Bank, Japanese Special Fund

Japanese consulting firms are required to carry out all of the studies but may subcontract up to 50% of the work.

$1.5
Costa Rica Miravalles III Geothermal Power Plant (1105/OC) Inter-American Development Bank, Private $70.0
Djibouti Assal Geothermal Power Plant (Feasibility Study) U.S. Trade and Development Agency $85.0
Latin America Renewable Energy in Latin America (TC9508279 and TC9508287) Multilateral Investment Fund $3.4 - In early stages of identification
Mexico Cerro Prieto Private $120.0
Mexico Los Azufres II, 100 MWe CFE Tender TBD - Tender deadline - 12 April 2000, Initiation of Project - 21 June 2000, Completion of Project - 25 July 2002
Mexico Off-Grid Rural Electrification (MXGE68390) World Bank, Global Environment Facility $6.5 - Appraisal mission scheduled for early fiscal year 2001
Philippines Rural Electrification World Bank $200.0 - Project is being identified
Poland Podhale Geothermal District Heating and Environment Project (PLPE37339 and PLGE57993) World Bank, European Union, Government of Denmark, Global Environment Facility, Local contribution, U.S. Agency for International Development $99.3
Portugal Azores

49% ownership by the Portuguese electrical utility, Electricidade de Portugal (EDP); 51% by the Azores electrical utility, Electricidade dos Acores (EDA).

Azores sources suggest that the Azores Government would be happy with the presence of a US company with the right technology, management record and resources as a strategic partner in the consortium.

$30.0
Russia Mutnovsky Independent Power Project, Kamchatka European Bank for Reconstruction & Development $353.2
Viet Nam Central Region Geothermal Power U.S. Trade and Development Agency $141.0

Sources: United Nations Development Business; the Infrastructure Division; the International Trade Administration, U.S. Department of Commerce Global Infrastructure Projects Database; others as noted.

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Upcoming Events

April 10-14, 2000
World Bank Energy Week 2000
Email: Christine Copley, the World Bank

April 12-13
Web site: Ex-Im Bank 2000 Annual Conference
Email: exim2000@dtihq.com

April 19-29
Web site: U.S.-China Renewable Energy Forum, Exhibitions, and Study Tour
Email: Kathleen Campbell, NREL

May 4-5
Web site: Winning Development Bank Supplier Bids
Washington, D.C.
Email: dbaseminars@mdba.com

May 8
Web site: International Energy Project Financing Conference
California Energy Commission, Long Beach, CA
Email: Tambu Kisoki
Tel: (916) 654-4719
Will feature successful financing case studies and presentations by equity fund investors, multilateral development banks, and commercial banks. Conference focus is on financing for power generation, cogeneration, energy efficiency, and other energy-related projects requiring less than $100 million in capital investment per project.

May 12
Financial Solutions for International Business
Executive Seminar, Georgetown University Conference Center
Contact: Global Financial Solutions, LLC, Tel: (301) 353-1088

May 22-25
Web site: WEC/IEA Symposium on Renewable Energy Development - Guilin, China

May 28-June 10
Web site: World Geothermal Congress 2000
Kyushu and Tohoku, Japan

June 15-16
Web site: 3rd Annual Private Power in Central America Conference
Center for Business Intelligence, LLC
Miami, FL

Privatization and Development, Regional Markets, Gas Pipelines, Renewables, Financing and Risk Management - The latest privatization and development plans from Costa Rica, Honduras, and Nicaragua. Hear from seven leading developers: Duke Energy International; El Paso Energy International; Energia Global International, Ltd.; Enron Caribbean Basin and Central America; Hart Energy International; Hydro Quebec International; and International Wind Companies.

July 23-28
Web site: GlobeEx 2000 Conference and Tradeshow
Email: Cheryl Lydon
NTS Development Corporation
Tel: (702) 317-0777
Las Vegas, NV

GlobeEx 2000, combining traditional energy disciplines with cutting edge alternative technologies and commercial financing, is dedicated to showcasing the latest advancements in alternative, sustainable, and renewable energy technologies. GlobeEx 2000 will encompass workshops, technical presentations, expert panel discussions, keynote speakers, plenary sessions, a trade exhibition and numerous networking activities.

October
U.S.-China Renewable Energy Business Development
Kunming, Yunnan Province, China
Email: Lee Gebert, DOE

DOE plans to leverage a one-day U.S.-China Renewable Energy Business Development with China's 21st Annual Solar Thermal Conference. Although it is a solar conference, other types of renewable energy will also be discussed at the meeting.

Week of December 4
Web site: Village Power 2000: Bringing Business to Rural Development
World Bank Headquarters, Washington, D.C.

Other geothermal and related calendars:

To have your event listed, email Liz Battocletti.

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Talk Back

We'd like to know what you think of this initial issue of Green Green; specifically, how can we make future issues more useful and relevant to you?

Please take a few minutes to complete the short survey below.

Name:
Company:

What would you like to see more of in future issues? Check all that apply.
Specific contact information for financing sources
Successful financing case studies
Country-specific financing information
  If so, what countries?
Personal interviews with financing sources
  If so, which financing sources?
Other:
  Please specify:
Other comments, suggestions, etc.

Do you wish to receive future issues of Green Green?
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Thank you!

Watch for the next issue of Green Green
coming May 31, 2000.


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THE SMALL PRINT

Green Green is produced for the Idaho National Engineering & Environmental Laboratory (INEEL) under Purchase Order No. K99-181018 and the U.S. Department of Energy, Assistant Secretary for Energy Efficiency and Renewable Energy, Office of Geothermal and Wind Technologies.

This information was prepared as an account of work sponsored by an agency of the U.S. Government. Neither the U.S. Government nor any agency thereof, nor any of their employees, makes any warranty, express or implied, or assumes any legal liability or responsibility for the accuracy, completeness, or usefulness of any information, apparatus, product, or process disclosed, or represents that its use would not infringe privately owned rights. Reference herein to any specific commercial product, process, or service by trade name, trademark, manufacturer, or otherwise, does not necessarily constitute or imply its endorsement, recommendation, or favoring by the U.S. Government or any agency thereof. The views and opinions of authors expressed herein do not necessarily state or reflect those of the U.S. Government or any agency thereof.


Copyright © 2000 Bob Lawrence & Associates, Inc.
345 South Patrick Street
Alexandria, Virginia 22314
USA

Phone: 703/836-3654
Fax: 703/836-6086
Email: lbatto@huskynet.com