IFC Renewable Energy in Serbia Neboja Arsenijevi Balkan

IFC – Renewable Energy in Serbia Nebojša Arsenijević Balkan Renewable Energy Program Manager Hotel Falkensteiner, Belgrade April 15, 2013 1

IFC – World Bank Group IBRD IDA International Bank for Reconstruction and Development International Development Association Est. 1945 Role: Clients: Products: IFC International Finance Corporation Est. 1960 MIGA Multilateral Investment and Guarantee Agency Est. 1956 Est. 1988 To promote institutional, legal and regulatory reform To promote private sector development To reduce political investment risk Governments of member countries with per capita income between $1, 025 and $6, 055. Governments of poorest countries with per capita income of less than $1, 025 Private companies in 181 member countries Foreign investors in member countries - - Political Risk Insurance - Technical assistance - Loans - Policy Advice - Technical assistance - Interest Free Loans - Policy Advice Equity/Quasi-Equity Long-term Loans Risk Management Advisory Services Shared Mission: To Promote Economic Development and Reduce Poverty 2

IFC – Internal Structure Advisory Services (AS) Investment Services (IS) Access to Finance (A 2 F) Finance Market (FM) Investment Climate (IC) Infrastructure and Natural Resources (C 3 P) Sustainable Business Advisory (SBA) Manufacturing, Agribus. and Services (MAS) Public – Private Partnership (PPP) 3

Western Balkans Region and BREP Program funded by: Austrian Ministry of Finance (BMF) End Date: June, 2016 4

BREP Objectives Objective 1: RE Regulatory Framework Improvements • Identification of legal (regulatory/contractual) obstacles • Drafting of improved legal framework • Raising awareness related to the new legal framework • Support during the adoption process Objective 2: Support to RE Sponsors / Developers • Information/Knowledge sharing • Project development support • Connection with international sponsors Objective 3: Support to Financial Institutions (Banks) • Information/Knowledge sharing • Dedicated Capacity Building - Trainings • Impact Assessment Studies 5

O 1: Regulatory Framework - Approach PRE-IMPLEMENTATION ACTIVITIES Scoping Mission with stakeholders Coop. Agreement Ministry – IFC Consultant Select. Process Signed Contract with Consultants Phase 2 Drafting Phase 3 Official Meeting Phase 4 Workshop IMPLEMENTATION ACTIVITIES Phase 1 Inception POST-IMPLEMENTATION ACTIVITIES (AS AND WHEN NEEDED) Supporting Ministry /Government Decrees Supporting Ministry in Parliament New / Amended Laws Supporting Agencies Other secondary regulation 6

O 1: RE Regulatory Framework - Activities 7

O 1: RE Regulatory Framework - Example Power Policy and Off-take related set of legal documents: • Renewable Energy Law and bylaws (Decrees) • Standardized Power Purchase Agreement • Standardized Grid Connection Agreement Concession related set of legal documents: • Concession Law • Standardized Concession Contract • Selection Criteria for RE Concessions Main targets: • To increase transparency and cash flow predictability • Mitigate Risk (standardized contracts, step-in rights) • Alignment with EU directives 8

O 2: Support to RE Sponsors - Approach Market Level Interventions Educational Workshops Educational Materials (brochures, roadmaps, etc. ) Support to Local Associations Investment Promotion Activities Local – International Match Making Company Level Interventions Support in Improving Project Documents Relationship with local community Support with E & S standards (Equator Principles) Support in finance modeling Improvement of Outreach Strategy 9

O 2: Support to RE Sponsors - Activities From B 2 B to Implementation 10

O 2: Support to RE Sponsors - Example 1: Austrian Company • Joint Venture with Albanian concession owner • Program of Activities (Po. A) for SHPP in Albania and Serbia • Private Benefit: improved cash-flow (CERs selling) • Public benefit: education, link with Po. A Example 2: Bosnian Company • Support with SHPP cascade design improvement • Official review of idea design • Private Benefit: optimized SHPP design • Public benefit: education, brochure with common design mistakes Main Targets • To support private companies with good projects and without IDD issue • To secure certain level of public benefits (education, brochure, etc. ) 11

O 3: Support to local FIs – Approach General Material Development Country Level Workshop Technical Manual: • SHPP Engineering Manual Material Adjust. Country Needs In-depth Capacity Building Training Joint Assess of first 3 SHPPs • SHPP Legal Manual • SHPP Budgeting Manual • SHPP Risk Management Manual Finance Manual: Impact Assess Study • SHPP Finance products development and marketing • Bank organization structure SHPP Cash Flow Tool SHPP Project Assessment/Evaluation Toolkit 12

O 3: Support to local FIs – Activities 13

O 3: Support to local FIs - Example 1: In-depth training with local bank in Albania • 3 - day training on SHPPs and project finance • Engineering, E&S, Budgeting, Legal, Financial • Private Benefit: new product, increased internal capacity • Public benefit: education, more SHPP project successfully financed Example 2: Country level workshop for Serbian banks • Presentation of IFC AS product (training) • Presentation of IFC IS products (loan, equity, quasi equity, risk share) • Private Benefit: idea for new product • Public benefit: education Main Targets • To increase internal capacity of local banks • To slowly change RE market from corporate to project finance. 14

BREP Team Nebojsa Arsenijevic Program Manager Belgrade Office NArsenijevic@ifc. org Dzenan Malovic Dimitar Dimitrovski Technical Specialist Policy/Legal Specialist Sarajevo Office (BIH) Skopje Office (MAC) DMalovic@ifc. org DDimitrovski@ifc. org Bajame Sefa Finance Specialist Tirana Office (ALB) BSefa@ifc. org Shpresa Kastrati Technical Specialist Prishtina Office (KOS) SKastrati@ifc. org Denis Mesihovic Finance Specialist Sarajevo Office (MNE) DMesihovic@ifc. org 15 Bojana Ristic Outreach Specialist Belgrade Office (SRB) BRistic@ifc. org