Access to Green Finance Mechanisms UNWTO and IFC Webinar Series 2 - - PowerPoint PPT Presentation

Access to Green Finance Mechanisms UNWTO and IFC Webinar Series

ABOUT THIS WEBINAR ________

WEBINAR IS BEING RECORDED MATERIALS WILL BE SHARED ON WEBSITE USE CHAT FEATURE TO ASK QUESTIONS https://www.unwto.org/green-investments-for-sustainable-tourism

2

REVENUE COSTS PROFITS

RETURN TO ‘NEW AND BETTER NORMAL’ POST COVID-19

3

TOPICS COVERED ________

4

• 1. IFC’s offer for green buildings
• 2. Green building definitions
• 3. Business case for sustainable hotels
• 4. Green financing mechanisms
• 5. Case studies
• 6. Q&A

Conciliation and arbitration of investment disputes. Guarantees of foreign direct investment’s non- commercial risks. Interest-free loans and grants to governments

• f poorest

countries. Loans to middle-income and credit-worthy, low-income country governments. Solutions in private sector development.

IBRD

International Bank for Reconstruction and Development

IDA

International Development Association

IFC

International Finance Corporation

MIGA

Multilateral Investment Guarantee Agency

ICSID

International Centre for Settlement of Investment Disputes

IFC IS A MEMBER OF THE WORLD BANK GROUP ________

5

IFC HAS A FOUR-PART STRATEGY TO SUPPORT GREEN BUILDING GROWTH ________

Further Resource: About EDGE

6

MARKET CREATION ADVICE INVESTMENT

IFC’S OFFER FOR GREEN BUILDINGS ________

Long-term loans, warehousing facilities, guarantees and risk-sharing facilities, structured finance, green bonds Support in identifying investment pipeline, market intelligence, training for loan

• fficers & developers, sustained technical

advice, CAFI Tool, Green Mortgage Toolkit Global and local marketing campaigns, stakeholder education, capacity building, technical guidance, promotion of incentives

7 7

Super efficient new hotels Deep retrofits for portfolio Clean energy Carbon neutrality

PATH TO CARBON NEUTRALITY FOR THE TOURISM INDUSTRY

AGGREGATOR MODEL LARGE BANKS INVEST VIA LOCAL FINANCIAL INSTITUTIONS VIA CAPITAL MARKETS

FINANCIAL PATHWAYS TECHNICAL PATHWAYS

DIRECT INVESTMENT

8

UNDERSTANDING GREEN BUILDINGS ________

9 9

DEFINITION OF A GREEN BUILDING ________

20% 20% 20% 20%

CERTIFIABLY GREEN AS VERIFIED BY AN INDEPENDENT THIRD PARTY BETTER PERFORMANCE THAN THE LOCAL BASELINE

&

20%

QUANTIFIED IMPACT REPORTING

&

10

INTERNATIONAL GREEN FINANCE STANDARDS FOR GREEN BUILDINGS ________

• Used by property developers

and investors to obtain data

• n the performance of their

investments.

• EDGE can be used completing

the Real Estate Assessment or the Developer Assessment.

• ICMA releases the Green Bond

Principles as well as guidelines for green buildings.

• EDGE is listed as an accepted

certification standard. (See Section E: Certification Standards).

• CBI releases standards for green

bonds funding residential or commercial buildings.

• EDGE is included as a qualifying

certification system.

• Global disclosure system

for investors, companies, cities, states and regions to manage environmental impacts.

• Protocol for reporting to CDP

using EDGE is forthcoming, following joint webinar.

11 11

• Kenya’s 1st green bond for 5

billion shilling (~$50 million) with structuring by Stanbic Bank.

• Use of proceeds for new student

accommodations that are EDGE certified.

• EDGE preliminary and post-

construction certificate ensure green standard.

• EDGE provides reporting in line

with ICMA standards.

• Government now made interest

from green bonds tax exempt.

CASE STUDY: ACORN USED GREEN BUILDING DEFINITION TO LAUNCH KENYA’S FIRST GREEN BOND

12

CASE STUDY: HSBC INVESTS $130 MILLION IN A GREEN LOAN WITH INDOSPACE, FOR REFINANCE OF EDGE-CERTIFIED WAREHOUSES

• Green loans are a sister instrument to

green bonds, an internationally accepted green mechanism.

• HSBC invested $130 million into IndoSpace

for a re-finance of a portfolio of EDGE- certified warehouses.

• HSBC’s green framework was audited by

CICERO, a leading provider of 2nd opinion in green finance.

Further Resource: IndoSpace Press Release

13

EDGE ALLOWS SELF-ASSESSMENT AGAINST INTERNATIONAL STANDARDS ________

20%

① FREE SOFTWARE ② ACHIEVABLE STANDARD ③ VERIFIED GREEN LABEL

Further Resource: EDGE Software Demo

14

BUSINESS CASE FOR SUSTAINABLE HOTELS ________

15

Further Resource: Business Case for Sustainable Hotels

16

UTILITY BILLS ARE A LARGE PERCENTAGE OF OPERATING COST OF HOTELS ________

Further Resource: Business Case for Sustainable Hotels

17

ROI ON MEASURES NEEDED TO REACH 20% EFFICIENCY FOR NEW HOTELS

Incremental Cost Utility Savings / month Payback Period in Years Angola $142,055 $34,745 0.3 Costa Rica $127,700 $10,000 1.1 Indonesia $74,500 $9,300 0.7 Peru $53,000 $14,000 0.3 Philippines $27,700 $22,000 0.1 South Africa $170,000 $14,110 1 Sri Lanka $152,800 $13,200 1 Turkey $85,000 $12,300 0.6 Thailand $35,000 $4,800 0.6

Further resource: Business Case for Sustainable Hotels Sampling of global results, with information for more than 30 countries available from https://www.edgebuildings.com/marketing/research/

18

CASE STUDY: MARRIOT HOTEL IN VERACRUZ, MEXICO IDENTIFIED $87,000 PER YEAR IN UTILITY SAVINGS

• Hotel identified tremendous savings

through sensible approaches with no incremental costs.

• Technical measures included efficient

lighting, HVAC, and plumbing.

• Utility reduction resulted in $87,000

savings per year.

Further Resource: Business Case for Sustainable Hotels

19 19

CASE STUDY: HOST HOTELS FOUND $40 MILLION ROI FROM WATER AND ENERGY SAVING PROJECTS ACROSS EXISTING PORTFOLIO

• One of the larges hotel owners and REITs

with ~100 properties.

• Implemented a range of water and

energy measures, including on-site

wastewater recycling laundry system, for 70% water reduction.

• Numerous awards for effort.

Further Resource: Business Case for Sustainable Hotels

20 20

ROI ON RETROFIT MEASURES

Improvement for: Payback Period (years) Lighting 2 HVAC and building systems 4 Rooftop solar system 4.7 Building controls 2.7 Refrigeration 1.8

Further resource: Business Case for Sustainable Hotels

21

CONSUMERS AND BUSINESSES ARE LOOKING FOR CERTIFIED GREEN HOTELS

• Certified hotels show higher ADR and

RevPAR over non-certified properties.

• Study by TUI Group found 1 in 10 travelers

book a sustainable room, but over half would if they had better labeling.

• 53% of North American-based companies

have corporate sustainability programs that affect their contract decisions with suppliers.

Further Resource: Business Case for Sustainable Hotels

22

IFC WILL EXTEND MARKETING SUPPORT TO YOU AND YOUR CLIENTS

Further resource: EDGE Marketing Toolkit

SUSTAINABILITY IS A SOLID INVESTMENT STRATEGY

Further Resource: Business Case for Sustainable Hotels

24

BANKS ARE PROVIDING INCENTIVES TO CATALYZE THE MARKET

Further Resource: EDGE Banking Pages 100% coverage of EDGE technical fees, global reach Lower loan pricing for green construction & mortgages, Colombia Lower pricing for green construction & 50% off certification, Colombia Lower interest rate, longer tenor & grace period, Costa Rica 10% refund of insurance premium, Colombia Technical assistance & free certification, Ecuador

25

0.5% lower interest rate, significantly longer tenor, free technical assistance

CASE STUDY: SONEVA FUSHI IN MALDIVES INSTALLED SOLAR AT NO COST

• Hotel partnered with Yingli Solar to buy

power from solar panels installed on their rooftops.

• Through PPA with Yingli, Soneva had no

initial costs but purchases power 40% cheaper than diesel generators.

Further Resource: Business Case for Sustainable Hotels

Benefits of on-site solar panels:

• 1. Decreasing installation costs
• 2. PPA structuring with no CapEx costs
• 3. Price security
• 4. Supply security

26

FINANCING MECHANISMS ________

27

MARKET CREATION ADVICE INVESTMENT

IFC’S OFFER FOR GREEN BUILDINGS ________

Long-term loans, warehousing facilities, guarantees and risk-sharing facilities, structured finance, green bonds Support in identifying investment pipeline, market intelligence, training for loan

• fficers & developers, sustained technical

advice, CAFI Tool, Green Mortgage Toolkit Global and local marketing campaigns, stakeholder education, capacity building, technical guidance, promotion of incentives

28 28

DIRECT INVESTMENT ________

GLOBAL OR REGIONAL BANKS HOTELS PROJECT SPONSOR LOCAL FINANCIAL INSTITUTIONS

29

Training on launching green real estate program; direct investment by IFC Self assessment to identify green measures; list of projects to bank Reporting on impacts; technical assistance agreement

VIA LOCAL FINANCIAL INSTITUTIONS ________

DFIS, INSTITUTIONAL INVESTORS HOTELS CERTIFICATION AS COMPLIANCE LOCAL FINANCIAL INSTITUTION CORPORATE REQUIREMENTS FROM BRANDS CENTRAL BANK

Credit lines; risk sharing; advisory assistance Training on launching green real estate program Self assessment to identify green measures; list of projects to bank Certificate serves as compliance mechanism for all stakeholders

30

MULTIPLE PROJECTS AGGREGATION SAVINGS PAY FOR UPGRADES

AGGREGATOR MODEL FOR REFURBISHMENTS ________

GLOBAL OR REGIONAL BANKS DFIS, INSTITUTIONAL INVESTORS

Self assessment to identify green measures Collaboration with IFC on platform set up Certificate serves as compliance mechanism for all stakeholders Direct investment, syndication

31

ISSUE GREEN BOND CERTIFY RESULTS & COMPLIANCE NEW PROJECTS, REFINANCE, REFURB

VIA CAPITAL MARKETS ________

BUYERS OF GREEN BOND

32

Education about green buildings

• pportunity

Advisory to set up green finance framework Self assessment for standard, impact reporting Pre-approved for use of proceeds green finance criteria

NEXT STEPS AND CALL TO ACTION

• Attend June 18 session for governments and

June 25 training on EDGE

• Receive technical training for staff or consultants
• Hire consultants already accredited by IFC
• Utilize marketing materials
• Utilize case studies for proof-of-concept
• Find banking incentives or government incentives
• Work with IFC on regional platforms and investment

33 33

www.edgebuildings.com