Loans for Financing Hydropower - Revision history

Wiki Gardener at 16:24, 29 December 2014

2014-12-29T16:24:48Z

Ranisha at 13:57, 25 August 2014

2014-08-25T13:57:00Z

Ranisha: /* Further Information */

2014-08-19T12:43:33Z

Further Information

Ranisha: /* Soft Loan */

2014-08-19T12:40:23Z

Soft Loan

Ranisha: /* Soft Loan */

2014-08-19T12:25:24Z

Soft Loan

Ranisha at 09:16, 14 August 2014

2014-08-14T09:16:23Z

Ranisha at 09:52, 17 July 2014

2014-07-17T09:52:30Z

Ranisha at 09:51, 17 July 2014

2014-07-17T09:51:50Z

Fungai Cecilia Sandamu: Fungai Cecilia Sandamu moved page Loans to Loans for Financing Hydropower without leaving a redirect

2013-07-12T11:12:51Z

Fungai Cecilia Sandamu moved page Loans to Loans for Financing Hydropower without leaving a redirect

Fungai Cecilia Sandamu at 07:58, 15 May 2013

2013-05-15T07:58:46Z

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 [[Portal:Hydro|►Back to Hydro Portal]]
 = Overview<br/> =
 There is still considerable sensitivity in government circles to the opening-up of strategically and economically important public services - not only in the electricity sector - to non-governmental participation, even if carefully regulated and controlled. At the same time, there is also some nervousness in the private sector over entering into long-term commitments in a government dominated field, particularly in view of the risks to which the private party may be exposed.
@@ Line 9: / Line 9: @@
 Both parties may therefore aim initially at only an "arm's length" relationship with minimal mutual involvement and strictly limited risks. This can be achieved through subscription to loan capital - bonds or debentures - issued by governments or government controlled and quasi-governmental utilities. The private sector can thus contribute through arm's length financing to the capital needs for power system expansion without being in any way involved in the management and operation of any part of the utility service or being dependent on its financial success. Bonds and debentures, backed by the government or by governmental agencies, national or international, offer a fixed and guaranteed yield and have a firm redemption life (often termed loan life). The lender is thus shielded from a variable and, to some extent, unpredictable performance of the utility. The governmental utility service is free to develop and run its system as it considers appropriate. Marginal electricity supply development can be financially supported in this way provided the utility has the capacity to take on the necessary development effort and cope with subsequent exploitation. One of the causes of marginalisation is, however, that this capacity has been fully absorbed by the effort devoted to the central areas and that no significant spare capacity can be mobilized for local electrification.
-[[Loans_for_Financing_Hydropower#toc|►Go to Top]]
+[[Loans for Financing Hydropower#toc|►Go to Top]]
 = Loan Financing =
 Participation of private capital by way of loans may be more attractive in cases where a small scheme is promoted from the outset as a non-governmental venture by particular interest groups or NGOs. The developer or promoter may then actively canvass for private support and attempt to manage the risk of failing to meet loan redemption commitments. The private investor will remain shielded from the commercial performance of the enterprise and yet have the satisfaction of contributing to a socially and economically important activity, if only in a strictly local context. This role may be particularly attractive for charitable bodies.
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 <br/>
-A clear distinction has to be made between:
+<u>A clear distinction has to be made between:</u>
 *lending to government or utility. The disbursement of funds for a specific project remains the responsibility of one of these bodies. The lender stays at "arm's length" although he may wish to scrutinize the development programme for which finance is sought; this is certainly done by the financing agencies. Programme loans (which are not tied to a specific project) form a corporate or sovereign debt and a prior charge on the balance sheet of the undertaking concerned; the loan charges incurred by the undertaking have to be met before any other of its borrowings are paid off. Debt management can be difficult where there is scarcity of development capital and defaulting on sovereign debt is not uncommon. Programme lending can therefore be risky in spite of its priority status.
 *lending for a particular project (sometimes termed "direct lending"). The organization responsible for project implementation - which may well be government or utility - has to form a separate and financially independent entity to manage this project. With such Project Loans, loan sums are redeemed from the cash flow generated by the project. The borrower's debt is subordinate to indebtedness incurred directly by government or utility. The lender has recourse only to the assets created out of his loan; hence he is lending with "limited recourse". The value of the assets created is his security or collateral but he will naturally look for more far-reaching guarantees from governments - his own and the borrower's and from national and international agencies.
 <br/>
@@ Line 31: / Line 34: @@
 <br/>
-[[File:Loan arrangements.jpg|frame|center|180px|Loan arrangements]]
+[[File:Loan arrangements.jpg|thumb|center|278px|Loan arrangements]]
 <br/>
 = Soft Loan =
-. A loan with a below-market rate of interest.<br/>2. Loans made by multinational development banks and the World Bank to developing countries. Typically, soft loans have extended grace periods in which only interest or service charges are due. They also offer longer amortization schedules and lower interest rates than conventional bank loans<ref name="Investopedia">Investopedia</ref>.
+#A loan with a below-market rate of interest.
 <br/>
@@ Line 48: / Line 53: @@
 <u>Example - India</u>
-Promoting [[Micro-Hydro_Power_-_Analysis_of_Costs|small hydropower projects]] is one of the policy instruments in the National Policy for Hydropower Development of India to accelerate the pace of hydropower development. The Ministry of Non-Conventional Energy Sources (MNES) deals with all matters related to Small Hydel Projects (up to 3 MW capacity). These projects are being provided with the following incentives:
+Promoting [[Micro-Hydro Power - Analysis of Costs|small hydropower projects]] is one of the policy instruments in the National Policy for Hydropower Development of India to accelerate the pace of hydropower development. The '''Ministry of Non-Conventional Energy Sources (MNES)''' deals with all matters related to Small Hydel Projects (up to 3 MW capacity).
 *incentives for detailed survey & investigation and preparation of DPR.
 *Incentives during the execution of the project in the form of capital/ interest subsidy.
 *Special incentives for execution of small hydro projects in the North Eastern Region by the Government departments/SEBs/State agencies.
 *Financial support for renovation, modernisation and upgrading of old small hydro power stations.
 <br/>
@@ Line 62: / Line 70: @@
 <u>Related Links:</u>
-[http://www.ccre.com International support for renewables in China]
+*[http://practicalaction.org/?id=powering_poverty_reduction_2#Case Micro-hydro revolving fund in Peru] (see also Chapter 4 in [http://www.nrel.gov/docs/fy99osti/26264.pdf The provision of access through the expansion of micro hydro and mini-grids])<br/>
-[[Loans for Financing Hydropower#toc|►Go to Top]]
+<br/>
 = Commercial Loan =
 = Further Information =
-*Further types of financing for MHP can be found [[Hydropower - Types of Financing| here]].
+*Further types of financing for MHP can be found [[Hydropower - Types of Financing|here]].
 *[http://practicalaction.org/?id=powering_poverty_reduction_2#Case Micro-hydro revolving fund in Peru Micro-hydro revolving fund in Peru] (see also Chapter 4 in [http://www.nrel.gov/docs/fy99osti/26264.pdf The provision of access through the expansion of micro hydro and mini-grids]
 *[http://www.ccre.com International support for renewables in China]
@@ Line 83: / Line 94: @@
 *[[Micro-Hydro Power - Analysis of Costs|Micro-Hydro Power - Analysis of Costs]]<br/>
 *[[Micro-hydro Power - Institutional Set-up|Micro-hydro Power - Institutional Set-up]]
 <br/>
 = References =
 <references /><br/>
 [[Category:Financing_and_Funding]]

@@ Line 1: / Line 1: @@
 [[Portal:Hydro|►Back to Hydro Portal]]
@@ Line 10: / Line 9: @@
 Both parties may therefore aim initially at only an "arm's length" relationship with minimal mutual involvement and strictly limited risks. This can be achieved through subscription to loan capital - bonds or debentures - issued by governments or government controlled and quasi-governmental utilities. The private sector can thus contribute through arm's length financing to the capital needs for power system expansion without being in any way involved in the management and operation of any part of the utility service or being dependent on its financial success. Bonds and debentures, backed by the government or by governmental agencies, national or international, offer a fixed and guaranteed yield and have a firm redemption life (often termed loan life). The lender is thus shielded from a variable and, to some extent, unpredictable performance of the utility. The governmental utility service is free to develop and run its system as it considers appropriate. Marginal electricity supply development can be financially supported in this way provided the utility has the capacity to take on the necessary development effort and cope with subsequent exploitation. One of the causes of marginalisation is, however, that this capacity has been fully absorbed by the effort devoted to the central areas and that no significant spare capacity can be mobilized for local electrification.
-<br/>
+[[Loans_for_Financing_Hydropower#toc|►Go to Top]]
 = Loan Financing =
@@ Line 36: / Line 35: @@
 <br/>
-[[Loans_for_Financing_Hydropower#Overview|►Go to Top]]<br/>
+[[Loans_for_Financing_Hydropower#toc|►Go to Top]]<br/>
@@ Line 67: / Line 66: @@
 [http://www.ccre.com International support for renewables in China]
-[[Loans for Financing Hydropower#Overview|►Go to Top]]
+[[Loans for Financing Hydropower#toc|►Go to Top]]
@@ Line 74: / Line 73: @@
 A ''commercial loan'' is a debt-based funding arrangement that a business can set up with a financial institution. The proceeds of commercial loans may be used to fund large capital expenditures and/or operations that a business may otherwise be unable to afford<ref name="Investopedia">Investopedia</ref>.
-[[Loans_for_Financing_Hydropower#Overview|►Go to Top]]
+[[Loans_for_Financing_Hydropower#toc|►Go to Top]]
 = Further Information =
@@ Line 87: / Line 86: @@
 <br/>
-[[Loans_for_Financing_Hydropower#Overview|►Go to Top]]
+[[Loans_for_Financing_Hydropower#toc|►Go to Top]]
@@ Line 94: / Line 93: @@
 <references /><br/>
 [[Category:Hydro]]

@@ Line 78: / Line 78: @@
 = Further Information =
-*Further types of financing for MHP can be found [https://energypedia.info/index.php/Hydropower:_Types_of_financing here].
+*Further types of financing for MHP can be found [[Hydropower - Types of Financing| here]].
-*[http://practicalaction.org/?id=powering_poverty_reduction_2#Case Micro-hydro revolving fund in Peru Micro-hydro revolving fund in Peru] (see also Chapter 4 in [http://www.ec3wd.com/cd3wd_40/JF/JF_OTHER/SMALL/BARNETT1.PDF The provision of access through the expansion of micro hydro and mini-grids]
+*[http://practicalaction.org/?id=powering_poverty_reduction_2#Case Micro-hydro revolving fund in Peru Micro-hydro revolving fund in Peru] (see also Chapter 4 in [http://www.nrel.gov/docs/fy99osti/26264.pdf The provision of access through the expansion of micro hydro and mini-grids]
-*[http://www.ccre.com.cn/English/BG.htm#ISDR International support for renewables in China]
+*[http://www.ccre.com International support for renewables in China]
 *[[Costs of Micro-Hydro Power Sites|Costs of Micro-Hydro Power Sites]]<br/>
 *[[Micro-Hydro Power - Analysis of Costs|Micro-Hydro Power - Analysis of Costs]]<br/>
@@ Line 88: / Line 88: @@
 [[Loans_for_Financing_Hydropower#Overview|►Go to Top]]
 = References =

@@ Line 37: / Line 37: @@
 [[Loans_for_Financing_Hydropower#Overview|►Go to Top]]<br/>
 = Soft Loan =
@@ Line 48: / Line 49: @@
 <u>Example - India</u>
-Promoting[[Micro-Hydro Power - Analysis of Costs|small hydropower projects]] is one of the policy instruments in the National Policy for Hydropower Development of India to accelerate the pace of hydropower development. The Ministry of Non-Conventional Energy Sources (MNES) deals with all matters related to Small Hydel Projects (up to 3 MW capacity). These projects are being provided with the following incentives:
+Promoting [[Micro-Hydro_Power_-_Analysis_of_Costs|small hydropower projects]] is one of the policy instruments in the National Policy for Hydropower Development of India to accelerate the pace of hydropower development. The Ministry of Non-Conventional Energy Sources (MNES) deals with all matters related to Small Hydel Projects (up to 3 MW capacity). These projects are being provided with the following incentives:
 *incentives for detailed survey & investigation and preparation of DPR.
 *Incentives during the execution of the project in the form of capital/ interest subsidy.
@@ Line 62: / Line 63: @@
 <u>Related Links:</u>
-[http://practicalaction.org/?id=powering_poverty_reduction_2#Case 3: Micro-hydro revolving fund in Peru Micro-hydro revolving fund in Peru] (see also Chapter 4 in [http://www.ec3wd.com/cd3wd_40/JF/JF_OTHER/SMALL/BARNETT1.PDF The provision of access through the expansion of micro hydro and mini-grids])<br/>
+[http://practicalaction.org/?id=powering_poverty_reduction_2#Case Micro-hydro revolving fund in Peru] (see also Chapter 4 in [http://www.nrel.gov/docs/fy99osti/26264.pdf The provision of access through the expansion of micro hydro and mini-grids])<br/>
-[http://www.ccre.com.cn/English/BG.htm#ISDR International support for renewables in China]
+[http://www.ccre.com International support for renewables in China]
-[[Loans_for_Financing_Hydropower#Overview|►Go to Top]]
+[[Loans for Financing Hydropower#Overview|►Go to Top]]

@@ Line 52: / Line 52: @@
 *Incentives during the execution of the project in the form of capital/ interest subsidy.
 *Special incentives for execution of small hydro projects in the North Eastern Region by the Government departments/SEBs/State agencies.
-*Financial support for renovation, modernisation and uprating of old small hydro power stations.
+*Financial support for renovation, modernisation and upgrading of old small hydro power stations.
 <br/>
-The Small Hydel Projects are site specific and depending on the hydrology, typically the plant load factor varies from 40 to 60%. The Small Hydel Projects upto 25 MW will also be transferred to MNES in order to provide greater thrust for its development. Government of India proposes to provide '''soft loans''' to these projects (up to 25 MW) through [http://www.ireda.in/ IREDA] / [http://www.pfcindia.com/ PFC]/ [http://recindia.nic.in/ REC] and other financial institutions and MNES would announce a suitable package of financial incentives for the accelerated development of Small Hydel Projects upto 25 MW station capacity. The State Government and Central and State Hydro Corporations like [http://www.nhpcindia.com/ NHPC] / [http://www.neepco.gov.in/ NEEPCO] etc. would be encouraged to take up a cluster of small/mini hydel schemes on Build, Operate and Transfer basis, and other suitable arrangements.
+The Small Hydel Projects are site specific and depending on the hydrology, typically the plant load factor varies from 40 to 60%. The Small Hydel Projects upto 25 MW will also be transferred to MNES in order to provide greater thrust for its development. Government of India proposes to provide '''soft loans''' to these projects (up to 25 MW) through [http://www.ireda.gov.in/ IREDA] / [http://www.pfcindia.com/ PFC]/ [http://recindia.nic.in/ REC] and other financial institutions and MNES would announce a suitable package of financial incentives for the accelerated development of Small Hydel Projects upto 25 MW station capacity. The State Government and Central and State Hydro Corporations like [http://www.nhpcindia.com/ NHPC] / [http://www.neepco.gov.in/ NEEPCO] etc. would be encouraged to take up a cluster of small/mini hydel schemes on Build, Operate and Transfer basis, and other suitable arrangements.
 <br/>
@@ Line 67: / Line 67: @@
 [[Loans_for_Financing_Hydropower#Overview|►Go to Top]]
 = Commercial Loan =

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