Financing of Energy Efficiency in the Public F iliti i A i Facilities in

Transcription

Financing of Energy Efficiency in the Public F iliti i A i Facilities in
ARMENIA RENEWABLE RESOURCES AND ENERGY EFFICIENCY FUND Financing of Energy Efficiency in the Public F iliti i A
Facilities in Armenia
i
TA M A R A B A B AYA N
May 15, 2014
R2E2 FUND
Established in 2005 by GOA following the y
g
Law on Energy Efficiency and Renewable Energy gy
Mission – facilitate investments in EE&RE area
Objective – create financing mechanism for EE&RE
for EE&RE
Portfolio of implemented projects >$40mln.
$40 l
2
R2E2 FUND ‐ organizational structure
g
Board of Trustees
Projects
Director
Administration
Financial
Procurement
Legal
Engineering
3
ACTIVITIES
•Policy development support (RE Roadmap, RE
I
Investment
Pl
Plan, NEEAP)
•Legal regulatory improvement proposals aimed to
market development
•Support to new production and services busting
EE&RE sector
•Training and capacity building activities for ESCOs
and other institutions
•Public awareness activities
•Project Management Services in Energy Sector
•Revolving
Revolving funding mechanism (through banks)
•Direct lending activities for pilot projects
•Surveys
y and studies to facilitate investments in RE
and EE fields
4
FUNDING SOURCES
• Revolving fund, formed after completion of WB financed
UHP and REP on-lending components
•Provided
P id d b
by the
h MoF
M F under
d Agency
A
C
Contract
•$10,5 mln.
•To
T be
b repaid
id to
t the
th MoF
M F by
b 2045
•Multiple allocations
•Allocation level 83%
•Margin of interest is set us a fee to cover operational
expenses of the Fund
•Grants from IFIs, e.g. WB/GEF through MoF
•Direct grants (WB/GEF; WB/CIFs; EU/BSBEEP)
•Advisory services to local firms (customized trainings)
•Consultants services (EBRD; USAID sub-consultant)
•Specific
S
ifi projects
j t financed
fi
d by
b d
donors
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ENERGY EFFICIENCY PROJECT
ENERGY EFFICIENCY PROJECT
•Objective
Obj i – Reduce
R d
energy consumption
i
in public buildings
•WB/GEF Grant - $1,8mln.
GOA - $8mln.
$8mln
•GOA
•Beneficiaries – public and municipal
agencies
i
•Typical ESMs – Insulation of walls and
roofs, replacement windows, replace street
lighting system
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ENERGY EFFICIENCY PROJECT ‐ STEPS
1. Application by the Beneficiary;
2. Signing a Project Initiation Agreement between the R2E2 Fund
and the Beneficiary;
3. Performing energy audit by the R2E2 Fund, agree the results
with
ith the
th Beneficiary;
B fi i
4. Conducting design and civil works tenders by the R2E2 Fund.
(Tenders are held according to the WB procedures).
5. Signing a Loan Agreement or Energy Service Agreement
between the R2E2 Fund and the Beneficiary with annexed
contract awarded as a result of the tender;
6. Implementing design and civil works, commissioning and
delivery of outputs to the Beneficiary;
7. Jointly operate the system within a year;
8. Monitor energy consumption and payments by the Beneficiary
EEP ‐ CRITERIA
EEP ‐
•Comfort level > 50%
f l l
Estimated energy savings > 20%
energy savings > 20%
•Estimated
•NPV >0
•Simple payback < 10 years
•Investment > $ 50 000
•Investment > $ 50,000 Procurement Scheme • Combined design & output‐based CW contract with b dd
b d
h
performance‐based payments)
• Project is defined by minimum level of energy savings based on preliminary energy audit
• Bidder must bid on design, construction and O&M
• Bids are submitted in single envelop (technical & financial)
• Evaluation is based on (i) technical feasibility to meet promised energy savings, and (ii) highest net present value
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Payment Schedule
20% - Advance payment against bank
g
guarantee
60% - After completion of works and
commissioning
10% - After 14-day M&V during the
h ti season andd provedd performance
heating
f
10% - After 12 defect liability period,
completed O&M and verification
10
Public Buildings in Armenia
Public Buildings in Armenia
• Public Agencies – financed from the state or community budgets (hospitals, schools, kindergartens, administrative g ( p
,
,
g
,
buildings, street lighting, etc) • Budget constraints coupled with rising energy costs
•
gas prices increased ~170% from 2008 to 2014; electricity also increased 35% (daytime), 41% (nighttime)
• Buildings are under –
g
occupied, financing is per person p ,
g p p
(student, patient, etc.) • survey results show average comfort levels in social buildings ~40%
• energy costs are generally second highest cost (5‐20% of total costs) for public buildings
• State of public buildings is poor and many need rehabilitation without prospects for cost recovery • Typical consumption – heating, cooking, hot water, electricity
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G OGRAPHY OF TH
GEOGRAPHY OF THE EEP
P
Hospital
University
School
Kindergarten
Administrative State Archive
Administrative –State Archive
Municipal lighting
Statistics on EEP in Schools
2
• Number of Schools: 6 / 19823 m
/
• Total investments: AMD 137 mln./
• From AMD 19 mln. to AMD 29 mln., average AMD 22.8 mln./m2
• From 5300 to 9000 AMD/m/մ
F
5300 9000 AMD/ /մ2, average 7200 AMD/m
7200 AMD/ 2
 Simple payback: 7.1…7.2 years
 Energy saving: 52.3... 58.0%:
• Heating (kWh/year)
• Before ESM‐ 2,286,767 ► after – 1,053,737 (‐53.9%)
• Heating (kWh/m
(k h/ 2/year) /
)
• Before ESM ‐ 120 ► after ‐ 55 emissions reduction
• CO2 emissions reduction • Before ESM ‐ 471.8 t/year ► after ‐ 218.2 t/year (‐53.7%)
Typical ESMs for Schools yp
Energy efficciency
Energy Efficiency
gy
y
Investmentts AMD/m
mմ2
EE Investments per heated area
EE Investments per heated area Gas co
onsumptio
on, 1000 m
m3
Annual Energy Consumption for Heating
gy
p
g
Heating –– kWh/m2
Energy for Heating per Area
gy
gp
Vayk
y 3 kindergarten g
Annual expenses for heating
TB1
Slide 19
TB1
Tamara; 11.05.2014
Vayk
y 3 kindergarten g
Annual expenses for heating
Masis Hospital
p
Expenses for Heating
National Archive of Armenia
Expenses for Heating
Issues, solutions, lessons learned
Issues, solutions, lessons learned
Application:
1. Lack of applications 1
1.
2.
2.
At some point PA refuses to take part in the project due to the repayment requirement
1
1.
2.
3
3.
3.
IInformation about the projects: marketing of website; TV & radio interview and talk f
ti
b t th
j t
k ti
f b it TV & di i t i
d t lk
show; all relevant events; special events; large articles in reputable newspapers.
Note on application form about source of information for future improvement of PA campaign.
Note on application form that the project is repayment based (not grant) to avoid Note
on application form that the project is repayment based (not grant) to avoid
misunderstanding and/or denying Special provision in Project Initiation Agreement that the PA shall sign ESA
Extensive communication with management of PA accountants and technical staff
Extensive communication with management of PA, accountants and technical staff
At some point PA refuses to take part in the project due to the rejection from the above standing governance bodies, i.e. Ministers, Mayors, Governors etc
Governors, etc
1.
2.
Request to submit corresponding letters
Provision in ESA about confirmation of parties that they have passed all relevant procedures to sign such agreement
procedures to sign such agreement.
Issues, solutions, lessons learned
Initial screening:
1. Lack of capacity to provide technical information
1
1.
2.
2.
Building emergency level g
g y
1.
2.
3
3.
3.
Very often buildings are in high emergency level, so investments and long term contract is not feasible in these buildings. Request to submit technical expertise resolution about the level of emergency
V ifi ti f
Verification from PA that it is not listed in the emergency building register PA th t it i
t li t d i th
b ildi
it
At some point PA refuses to take part in the project due to the rejection from the above standing governance bodies, i.e. Ministers, Mayors, Governors etc
Governors, etc
1.
2.
4.
The simple questionnaire about the building conditions and energy consumption is The
simple questionnaire about the building conditions and energy consumption is
published on the Fund’s website, that the applicant should fill in
Fund staff assist with explanations and advises by phone or email, site visits Request to submit corresponding letters
Provision in ESA about confirmation of parties that they have passed all relevant procedures to sign such agreement.
Condition of roof is poor. Need for rehabilitation
1.
2.
The ESA can’t cover expensive rehabilitation of roofs.
Discuss with other donors if they can finance the cost of rehabilitation
y
Emergency level of building 
The building I not considered if emergency level is III or IV

If the initial screening approves the project, then require technical expertize
of emergenc
emergency level
le el
Condition of roof Issues, solutions, lessons learned
Energy audit:
1. Lack of accurate information about energy consumption. Very often PA report better comfort data than it was actually during the baseline season. 1.
2.
3.
4.
2.
Low level of comfort: Even if significant saving potential is there, there is risk of nonpayment due to the increased comfort. 1.
2.
3.
Careful review of baseline conditions. The comfort level should be more than 50%,. ,
Explain and specify in ESA that the savings are calculated based on the same comfort level
Tariff increase: Energy tariffs increase after the energy audit or project may create difficulties with repayment.
create difficulties with repayment. 1.
2.
4
4.
Compare monthly bills for several years
hl b ll f
l
Asking several persons about the actual comfort level When possible conduct measurements before project starts Specify in the ESA what are basic condition for purpose of comparison of consumption and identification of savings
d id tifi ti
f
i
Financing per student/bed guaranties flexibility for PA to allocate more funds for energy expenses
Request authorities to compensate tariff increase for PA
Timing: Energy audit takes long time to assure accurate measurements, Timing:
Energy audit takes long time to assure accurate measurements
calculations and analysis. However this facilitate next stages of the process. 1.
2
2.
Specific software to reduce timing, as well as to provide to potential bidders for high quality documents
Segregation of duties among engineering staff (building data collection measurements
Segregation of duties among engineering staff (building data collection, measurements, calculations, monitoring, supervision, etc) Issues, solutions, lessons learned
Procurement:
1. Lack of interest due to the new procedures not used in the market 1.
1
2.
3.
4.
5.
2.
Lack of capacity to calculate savings, NPV, etc. 1.
2.
3.
4.
3.
Conduct specific trainings
Conduct
specific trainings
Direct invitation to construction and design companies
Pre‐bid conferences
Free of charge documents, also by email
Use bid security declaration instead of bank guarantee
Provide detailed explanation and spreadsheets with guidance p
p
g
Provide files with protected cells to make accurate calculations Requirement to be approved by the Fund. Assistance by the Fund during design stage
Lack of capacity of construction firm to procure engineering design services: 1.
1
2.
3.
4
4.
Provide sample TOR for design company engagement
P
id
l TOR f d i
Requirement to conduct independent review by licensed company;
Requirement to be approved by the Fund. Assistance by the Fund during design stage
Assistance by the Fund during design stage
Issues, solutions, lessons learned
Procurement:
At start up –
p 1st tender was failed due to the lack of interest and absence of responsive bids: 2nd tender – 14 companies were interested but only p
y
1 or 2 bids per each contract was submitted The latest tender – 14 companies were interested, 5‐
p
6 bids per each contract
Medium and large companies were not interested, now there is interest also from their site Increased interest to participate in tenders, inquires b h
by phone and through visits
d h
h
Positive opinion about procedures Issues, solutions, lessons learned
Contract management:
1. Payment schedule for larger contracts is not acceptable for most of companies
most of companies. 1.
Specify output‐based intermediary payments 2. As a rule contract completion is earlier than deadline, which in its turn means that PA shall start repayment
which in its turn means that PA shall start repayment earlier
1.
2.
Specify in ESA that the repayment starts after 1 month after commissioning
Make flexible repayment schedule that could be adjusted based on the actual commissioning date 3 Most
3.
Most of contractors prefer Bill of Quantities to the of contractors prefer Bill of Quantities to the
Activity schedule
1. We plan to add provision that for information purposes the BoQ could be provided for calculation of additional the BoQ
could be provided for calculation of additional
woks when necessary
2. Engineering design firm prepares for their internal use Issues, solutions, lessons learned
Commissioning:
No issues
Measurement and Verification
1. Lack of interest and capacity to take readings of meters and record data
t
d
dd t
1. The Fund explains the importance of accurate measurement and submission of information
2. Fund provides simple templates for data recording
3. Cross checking by the Fund data of contractor, utility bills information of PA
bills, information of PA
4. Special devices and equipment for monitoring
2. Baseline information quality is not adequate
1. Baseline adjustment is specified in ESA and contract with ESCo
with ESCo. Issues, solutions, lessons learned
Repayment:
1. The PA asked about the repayment schedule to better manage their cash Normally the allocation of funding by
manage their cash. Normally the allocation of funding by quarters are nearly equal.
2. Although the PA and municipality may borrow, however in order to discipline the local authorities and PA the GoA
order to discipline the local authorities and PA, the GoA
decided to approve case by case, which makes process very difficult and long.
1
1.
2.
Fund signed ESA, which is service provision contract with Fund
signed ESA which is service provision contract with
extended payment against the services. Fund submits monthly invoice for fee for its services to the PA 3 No
3.
No major issues with repayment. Early payments are major issues with repayment Early payments are
made by most of PAs. p
y
,
4. If Contractor fails to complete the works by deadline, then penalties are reduced from the repayments due of the PA
Boilers in ASUE
Boilers in ASUE
Before After
Entrance to ASUE Building
Entrance to ASUE Building
Before After
Lchashen village school
Lchashen village school
Sunny side North
Thank you for attention
Tamara Babayan
Director
Armenia R2E2 Fund Phone: 374 10 588011
Mobile: 374 93 930030
Email: [email protected]
www.r2e2.am
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