Access to Sustainable Energy for LAC: Solutions to Regional Challenges Structured and Corporate Finance Department Rachel Robboy Pr. Investment Officer

2 Structured and Corporate Finance Department (SCF)  Created in 1995 to support private sector investment in the region  Track record of cooperation with multilaterals and other agency lenders as well as commercial banks  Over 120 projects; mobilized US$35.4 billion in investment costs  US$7.0 billion in direct IDB financing/guarantees  Priority to green projects that better serve the needs of smaller economies and projects that promote social inclusion  Strategy to lend to US$10 billion of climate friendly projects over next 5 years and 80% of all power projects to be in renewable energy

Facing the Challenges: Strategy to Support RE/EE through the Private Sector Short Term: Focus on the most effective investments and policies to close the gap between energy demand and supply  Construction and rehabilitation of renewable energy plants  Energy efficiency programs  Programmatic loans to support low carbon economies Medium Term: Implement projects and programs consistent with sustainable energy matrix that includes energy policy reformulation  Promote national policy shift  Implement large scale projects  Develop technical assistance programs  Continue to support private investors in the region

4 SCF Climate Change Portfolio Renewable/Energy  Eurus: MW wind farm in Oaxaca, Mexico  La Ventosa: 67.5 MW wind farm in Oaxaca, Mexico  Pando Monte Lirio: 2 run of the river 83.3 MW hydro power plants in Panama  EE GM: supports commercial bank financing for energy service companies in Brazil Green Banking  Bancomer: US$90 mm for “greening” Bancomer’s buildings in Mexico  Banco General: on-lending to build a “green portfolio” of MSME clients in Panama BioEnergy  Lacfin: US$150 mm regional facility to support sugar and biofuels industries  Energia Pacifico: 15.6MW biomass co-generation plant in Chile  Maple: Integrated ethanol production and supply project in Peru

SCF Financial Products Products and Terms  A-Loan: Direct loan from IDB’s own resources  A/B Loan: Participation of international banks and institutional investors. The IDB acts as Lender of Record and Administrative Agent for the entire A plus B loan facility  Guarantees: Credit enhancement from the IDB to allow borrowers access to better financing terms from domestic and foreign lenders or target institutional investors limited to investment grade obligations  Interest Rates: Fixed or floating interest rates over Libor. Spreads priced according to existing market conditions and reflecting the overall characteristics of the underlying transaction  Seniority: Senior and/or subordinated loans  Tenors: up to 30 years (average: years)  Currency: US$ Dollars and local currency, when hedging is available  Preparation and Execution Fees: Typical fees charged by commercial banks including analysis fees, up front and structuring fees

Transaction Cycle FINANCIAL CLOSING AND DISBURSEMENT INITIAL DESK ANALYSIS & ELIGIBILITY APPROVAL Letter of Interest & Mandate Letter NEGOTIATION OF TERMS AND CONDITIONS CREDIT AND BOARD APPROVAL DUE DILIGENCE Hiring of consultants (Independent Engineer, Environmental, Market, Legal, Financial, Integrity)

Selection and Contracting of Consultants REQUEST OF EXPRESSIONS OF INTEREST (Consultant Database & Others) Short List of Firms (Minimum 3) Request for Proposals Clarifications Submission of Proposals Opening and Evaluation of Proposals Selection Result and Notification Signing of a Consultant Service Agreement (CSA) between the Borrower, the Bank and the Consultant

Rachel Robboy Principal Investment Officer Infrastructure Division Structured and Corporate Finance Department