Global Infrastructure FacilityPublic Seminar

- GIF Project Support Activities (Asia & Pacific) -

5th December, 2016

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1. Regional Pipeline Snapshots- Asia & Pacific

2. Project Overview

3. Discussion

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Asia & Pacific

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In 2015, Private Participation in Infrastructure (PPI) in EAP was of US$13.4 billion in 79 projects.

- Top 4 countries (Philippines- 44%, China- 22%, Malaysia- 20%, Thailand 12%) accounted for 98% disbursement.

- Energy sector captured 91% of total disbursement, of which $5.1billion was invested in renewable energy projects.

East Asia and Pacific (EAP)- Trends in Private Participation

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Asia Portfolio Status

Project Preparation and Structuring Activity

Project Definition Activity

Prospect Project

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Project Sector Technical Partner

GIF Project Preparation and Structuring Activity (2)

Solomon Island: Tina River Hydropower Development Project Energy WB & IFC

Indonesia: Jawa 3 Gas Fired IPP Energy TBD

GIF Project Definition Activity (3)

Indonesia: Toll Road Program Transport WB

Sri Lanka: LNG Terminal PPP Energy IFC

India: Rajasthan State Highway Development Project Transport WB

List of Approved Projects

• Project Preparation and Structuring Activity: 2 projects (approved)

• Project Definition Activity: 3 projects (approved)

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Key Challenges: Asia & Pacific

• Conventional approaches for large-scale infrastructure projects still predominate– ODA support and public financing still dominate– Indonesia: assigning toll roads to SOEs– Vietnam: SOE-dominated power sector– China: local investors and local financing– Cambodia: negotiated basis

• Various funding resources for infra project preparation– Project Preparation Facilities (AP3F, country level PPP initiatives, etc.)

• PPP framework and capacity remain constraints in most prospective client countries

• Country-specific challenges with approval processes and cross-Government coordination– e.g. Indonesia

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1. Regional Pipeline Snapshots- Asia & Pacific

2. Project Overview

3. Discussion

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Project Overview: Indonesia Gas- Fired IPP (1)

• Project Description: Construction and operation of an 800MW combined cycle gas turbine power plant in Gresik complex (20km from the city of Surabaya). Being prepared by PT PLN (the state-owned electricity company) & its subsidiary, the project will be implemented by an Independent Power Producer (IPP) developer selected trough competitive bidding.

• Development Impact: It will contribute 800MW to the power deficit (currently electrification ratio of 84%) and to the Government of Indonesia’s 5-year plan to add 35GW generation capacity, while lowering the percentage of coal-fired generation in the generation mix (44% of total capacity in 2013).

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Project Overview: Indonesia Gas- Fired IPP (2)

• Sector Context: The Ministry of Energy and Mineral Resources is responsible for energy policy (including tariff and subsidy), electricity business licenses and regulating the power sector. PLN is a vertically integrated power company (generation, transmission and distribution) and acts as the single authorized buyer at the wholesale level. PLN buys electricity from IPPs.

• GIF Role: supporting transaction advisory in preparing the project including retaining specialized consultants for technical, legal and E&S due-diligence. Value addition would be to provide transaction advisory support to PJB / PLN to review technical, environmental and social, and structure one of the first gas IPPs of the country. Expected timeline to the market would be 12- 18 months.

• Opportunity for Private Sector: IPP developer, EPC contractor, gas supply, lenders, etc.

• Comparable Projects in PLN Pipeline: (1) CCGFPP Sumbagut 1,3 and 4 (3x250 MW), in Sei Percut South Sumatera, (2) CCGFPP Dumai 250 MW in Dumai

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Project Overview: Myanmar LNG Terminal

• Project description: Development of LNG Floating Storage Regasification Unit (FSRU) import terminal to re-gasify the imported LNG and associated port infrastructure under PPP. The new LNG terminal will enable import of LNG to Myanmar, as a means to serve existing and upcoming gas-fired power plants. The project site has yet been determined.

• Development Impact: The new infrastructure service will improve in providing an access to 7.3 million people in case of increase in generation capacity of 1,680MW (new gas-fired power plants), while achieving diversifying energy mix. The Government is in urgent needs due to energy supply fluctuation in dry season and expected depletion of Yadanagas field by 2025-26.

• GIF Role: supporting the Government and a transaction advisor in preparing the project including retaining specialized consultants for technical, legal and E&S due-diligence. Expected timeline to the market would be 15 months.

• Opportunity for Private Sector: LNG terminal developer, construction of FSRU, LNG supply, gas power station, lenders, etc.

• Comparable Projects in GIF Pipeline: Sri Lanka LNG Terminal

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1. Regional Pipeline Snapshots- Asia & Pacific

2. Project Overview

3. Discussion

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Key Questions for Discussion

1. What will be the major challenges of the projects reviewed in reaching to commercial close and in attracting commercial finance?

2. What means would be available for mitigation of those risks?

3. What will be the opportunities for the Japanese private sector?