Energy Transition: Reforms, Investment and the Post-Paris Agenda Dr. Robert Ichord CEO, ICHORD VENTURES, LLC February 4, 2016

Presentation Main Topics Energy Market Trends and Projections Energy Investment and Finance Issues INDCS and the Post Paris Implementation

Energy Market Trends and Projections IEA WEO estimates that all the growth in primary energy ( 32%) to 2040 will be in the non- OECD countries which currently account for 57% of the total. China and India will continue to be key sources of growth, maintaining their combined share of nearly 50% of world primary energy and accounting for 60% of coal consumption. Highest rates of demand growth will be in Africa and Middle East. Slower growth in Chinese oil demand, increased US and other non- OPEC oil production and Saudi policies has meant lower prices for oil. Prices should stay low for several years compared to 4 years of historical high prices. Despite being only 3% of global primary consumption, renewables accounted for half of new world power generation capacity additions in BNEF projects continued fall in costs of solar and wind. IEA projects that the share of fossils fuels in the power sector will fall from 67% to 54% in 2040; BNEF sees faster transition to 41% with renewables accounting for 46% by Regions vary with Asia and Middle East higher in fossil fuels. W. Hemisphere as world energy superpower and Asia as dominant market and importer.

Energy Investment and Finance Issues IEA projects $ 68 trillion investment need to 2040 ($12.8 trillion for electric power in non-OECD alone) – critical need for private financing ; challenge is that funding needed in non-OECD countries SE4All Finance Committee: Sees need for $49 bilion per year for access; $ billion for renewables and $560 billion for energy efficiency to meet 2030 goals Problem is that institutional investors, managing $86 trillion in capital, see risks as too high in emerging markets where 80% of investment is needed.. Problem of soverign risks and overall governance and institutional capacity, especially in local financing sector; key obstacle is financial weakness of utilities as primary offtaker for generation investors Focus on risk-reduction :(1) green bonds; (2) DFI leveraging: (3) new insurance products; (4) aggregation vehicles Strong consensus on need to strengthen project preparaton and pipeline development. Also tap $5 trillion in pension and other funds in emerging markets such as Brazil, Malaysia, S. Africa, and Poland.

INDCS and Post Paris Implementation 1. Developing Action Strategies: Continue to develop LEDS and build capacity and support for target 2. Energy Pricing and Subsidy Reform: Need to address power sector as well as fossil fuel subsidies and develop effective social safety nets for low income groups 3. Improving the Enabling Environment: Develop sound legal and regulatory frameworks and financially viable utilities as well as improve transparency and governance 4. Better Leverage IFI and Donor Financing: Create new mechanisms/ instruments and ensure efficient use of Green Climate Fund resources. 5. Accelerate Commercialization of Decentralized Clean Technologies: Develop regulatory frameworks and aggregation facilities to promote private and SME development and local bank involvement for both urban and rural areas. 6. Transmission System Modernization and Expansion and Regional Energy Market Development: Ensure reliable and resilient electricity transmission systems and regulatory frameworks for economic cross border trade.