Mexico Chiller Concessional Lending Pilot Project

Transcription

1 Mexico Chiller Concessional Lending Pilot Project World Bank UK Bilateral Current status: 1 st Phase completed Financial Agents Workshop, Washington D.C. 14, 15 April 2004

2 Project Objectives (i) Test various loans conditions to finance the replacement of 20 CFC chillers with energyefficient CFC-free systems. (ii) Reduce technology risks and the associated uncertainty about the level of electricity savings.

3 Project data Project duration: 54 months ODS consumption in sector (1998): 276 ODP tons Project Impact: ODS to be eliminated in 11 years: 52 ODP tons ODS to be eliminated in 1 year: 5 ODP tons Requested grant (UK bilateral in two phases): Phase 1 $ 500,000 Phase 2 $ 500,000 Counterpart funding: FIDE $ 1,000,000 Chillers owners $ 300,000

4 Loan conditions Maximum loan per solicitant: USD 120,000 (2 chillers per project) Fixed repayment period: 36 months (3 years) Interest rate: Currency Interest rate Units of investment (UI) * US Dollars Chillers >= 20 years 2.0 % annual 2.0 % annual Chillers < 20 years 0 % annual 0 % annual * UI: inflation adjusted monetary unit updated daily based on the consumer price index.

5 Bidding process Four bid evaluation and qualification criteria were developed to prioritize the most cost-effective and efficient proposals, and to share the technological/economic risks with the supplier and chiller owner: - Price per ton of refrigeration - Guaranteed electric energy savings (Kwh/year) - Proportion of owner s counterpart with respect to total project cost - Time required to implement chiller replacement (weeks) The four mail chiller suppliers operating in Mexico were invited to participate: York Int nal, Ideal Std, Trane Div, Equipos McQuay & Carrier Mexico.

6 FIDE Financial screening criteria FIDE s decisions to finance or not to finance projects were reached based on the following three criteria: - Based on information obtained from the Buro Nacional de Credito (BNC). - The seond criterion is applied when the required credit information cannot be obtained from BNC and is based on the bidders previous experience/background with FIDE. - The third criterion involves the calculation of five financial ratios which must comply with values specified in Procedures of evaluation for authorizing financing by FIDE.

7 Chiller performance Verification of potential energy savings was carried out by an international auditing company. Work consisted of three phases: - Training and workshop. - Set up and initial measurement. - Verification after chiller replacement. In-situ measurements were performed on existing chillers and on ten new replacement ones, using the same well-established methodology. Verified energy savings in KWh/year were then compared with the proposed energy savings. Actual savings for all the 10 projects evaluated lie within 15% of the predicted savings or are in fact higher than predicted savings.

8 Summary of achievements by end of 2002 The program accomplished its objectives and improved the expected results: - FIDE s contribution exceeded by 40% the expected amount ($700,000 instead of the $500,000 expected due to energy efficiency improvements in the chiller system). - The building owners contribution exceeded by 350% the expected amount ($692,300 instead of the $153,466 expected). - ODP eliminated in the first year was 56% greater than expected (7.8 tons instead of 5 tons).

9 Summary of achievements (Cont) - 12 chillers were financed instead of 10 expected due to the increased building owner contributions. - Disbursements have been made on schedule % of building owners made their monthly repayment on time. - Loan conditions were attractive to building owners, which proves that a credit program in this sector is feasible. - Energy savings were 36% higher than proposed (7,387,902 kwh/yr instead of 5,423,539 kwh/yr proposed).

10 Status of the Program and revolving fund by 31 March projects were completed for an estimated amount of U$S 844, projects are currently under execution for an estimated amount of U$S 270, Total funds recovered up to date of approx. U$S 740, new projects in a promotion phase.

11 Lessons learned New areas: Grant on lending financing system: Grant to country Government lends to building owners Positive results with regard to energy savings and elimination of ODP, demonstrated the technical success of the Chiller Replacement Program. This generated impetus to undertake activities for Industrial chillers in phase 2.

12 Lessons learned (2) Bidding process: FIDE seeks on a first come first served basis to select projects according to pre-set criteria. Financing: Based on a survey of suppliers, inclusion of the cost of installation of new chiller equipment in grant financing will attract increased participation of chiller owners.

13 Lessons learned (3) Financing: - Better results were achieved when carried out by the manufacturers instead of suppliers since fees penalties are avoided. - General environmental awareness is increased through the program. - New manufacturers joined the program due to successful results.

14 New challenges - Persuade users to go for HFC-134 instead of HCFC-22; - Persuade users to lease equipment with HFC-134 instead of R-11 or R-12; - Promote the use of CFC-free technologies and good practices in servicing and recycling of oil; - Broaden the program scope to corporate groups through seed capital generation.

15 FIDE s Corporate Groups approach Generation of a seed capital Identification and financial assistance provided to the Corporate Group Formalization of financial assistance Selection of feasible companies for projects Projects execution under current program rules Verification of equipment dismantling Provide FIDE wih the results of project Funds reinjected for new projects Reports on program development Evaluation of results achieved Reimbursement of funds