INTER-AMERICANDEVELOPMENT BANK

LAC ENERGY & ENVIRONMENTCANADASEPTEMBER 2015

LAC Energy MatrixMillion Barrels of Oil equivalent per day, MBOe/d

World LAC North America Europe

Source: Energy Innovation Center at the IDB

Primary Supply 271,0 100.0% 15,8 5.8% 53,9 19.9% 34,7 12.8%Crude 85,9 31.7% 6,8 43.2% 21,1 39.3% 12,5 35.9%Natural Gas 57,0 21.0% 3,9 24.9% 14,8 27.4% 7,9 22.7%Coal 79,0 29.2% 0,8 5.0% 9,2 17.1% 5,8 16.6%Nuclear 12,9 4.8% 0,2 1.0% 4,7 8.8% 4,6 13.3%Biocombust. & Waste

26,9 10.0% 2,6 16.5% 2,2 4.1% 2,7 7.9%

Hydro 6,3 2.3% 1,3 8.2% 1,2 2.2% 0,6 1.7%Solar & Wind 1,5 0.6% 0,03 0.2% 0,3 0.6% 0,6 1.6%Geothermal 1,3 0.5% 0,2 1.0% 0,3 0.5% 0,1 0.3%

Source: http://www.worldbank.org% GDP

Net Oil Exporters(2014)

Oil Price Outlook

Source: IMF World Economic Outlook

Source: World Bank

Affordability: Estimated Electricity prices(US$ cents/kWh - 2011 )

Source: OLADE Electric Tariffs in LAC 2011, IEA Electricity Information 2012

Country Residential Industrial Country Residential Industrial

Argentina 2 3 Honduras 14 20Barbados 30 36 Jamaica 32 25Belize 22 17 Mexico 10 11Bolivia 9 16 Nicaragua 22 22Brazil 26 19 Panama 17 16Chile 21 15 Paraguay 8 5Colombia 19 20 Peru 13 6Costa Rica 14 13 Dominican

Rep.18 20

Cuba 23 10 Surinam 3 7Ecuador 9 6 Trinidad+

Tobago5 4

El Salvador

24 18 Uruguay 28 13

Grenada 32 28 Venezuela 2 1Guatemala 18 16Guyana 24 29 OECD Ave

201016 11

Haiti 35 40 USA Ave 2010

12 7

Reliability: Estimated LAC Electricity Losses

latest 5 year average (%)

Source: Jimenez, Serebrisky and Mercado 2014, IEA 2012

Country Losses Country LossesHaiti 60 Bolivia 14Dominican Republic 34 Guatemala 14Guyana 33 Panama 13Paraguay 32 Bahamas 12Venezuela 32 El Salvador 12Nicaragua 25 Belize 12Honduras 25 Costa Rica 10Jamaica 24 Chile 9Colombia 20 Surinam 8Uruguay 19 Peru 7Ecuador 19 Barbados 6Mexico 17 Trinidad+ Tobago 6Brazil 16 LAC Average 17Argentina 16 OECD Average 6

22

2324252627

Estimating Forecasting LAC-7

• Evaluated regional and country current & futurepatterns in Electricity installed capacity & generation• Sources of informationHistorical installed capacity and refinery capacity from

Energy Information Administration (EIA) Official data for future installed capacity, Projected installed capacity according to official expansion plans.

Rank Country Population GDP

(PPP)GDP(Nominal)

1 Brazil 204,519,000 3,259 1,9042 Mexico 121,006,000 2,224 1,2323 Colombia 48,218,000 683 4274 Argentina 43,132,000 953 5635 Peru 31,153,000 403 2186 Venezuela 30,620,000 546 2097 Chile 18,006,000 410 2648 Guatemala 16,280,000 79 509 Ecuador 16,279,000 182 10010 Cuba 11,260,000 212 7911 Haiti 10,994,000 19 912 Bolivia 10,520,000 70 3413 Dominican

Republic9,980,000 136

6214 Honduras 8,950,000 41

2015 Paraguay 7,003,000 62

3516 Nicaragua 6,514,000 30

1217 El Salvador 6,459,000 53

2918 Costa Rica 4,851,000 65

5319 Panama 3,764,000 83

4920 Uruguay 3,310,000 73

5821 Jamaica 2,889,187 25

16

Trinidad & Tobago

1,223,916 42 30

Guyana 735,554 6 3Suriname 573,311 9 5Belize 340,844 3 2Bahamas 321,834 11 8Barbados 277,821 7 4LAC 619,180,467 9,686 5,475LAC-7 496,654,000 8,478 4,817

Electricity Supply & Demand

Hydr Fossil Fuels (Gas, Diesel, Others (Biomass, Nuclear, Wind, Solar, o Coal) Geothermal)

Sources: 1986-2013 – IEA; 2013-2030 – INE/ENE

Hydro Fossil Fuels (Gas, Diesel, Coal)

Others (Biomass, Nuclear, Wind, Solar, Geothermal)

Projected Demand

0

500

1,000

1,500

2,000

2,500

3,000

2025202420232022202120202019201820172016201520142013201220112010200920082007200620052004200320022001200019991998199719961995199419931992199119901989198819871986198519841983198219811980

Actual Data Forecasts (official)LAC

Generation from hydro is 39% of total generation, while fossil fuels represent 55% of total generation and other sources account for 6%

By 2025, fossil fuel generation will be 59%, followed by hydrogeneration at 33%, and other sources will be 8% of total generation for Latin America. How will we pay for the investments required?

LAC Energy Matrix 2012Thousands of Barrels of Oil equivalent per day, kBOe/d68%

www.iadb.org/energydatabase

How IDB works with the private sector

Strengthening medium & large scale sustainable investments.

Supporting growth of small & medium enterprises.

Expanding access to finance, markets, basic services & green growth.

Financing innovative business models that serve the base of the pyramid

IDB’s financial products and services

Senior and subordinated loans Syndicated loans Partial credit guarantees Equity and quasi equity Capacity building & knowledge creation Partnerships

Who are IDB’s private sector clients

• Micro, small and medium enterprises

• Large corporates and state-owned enterprises

• Special purpose vehicles

• International and local banks

• Investment funds

• Microfinance institutions

Non-profitand other

organizations

CompaniesFinancial

Intermediaries

Industries & Services

Infrastructure

36%

33%

29%

Social Infrastructure

2%

Financial Markets

NSG Portfolio -- December 2014

Key NSG Lending PrioritiesEn

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En

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Tran

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Wat

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San

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Sustainability

Project Type: Eurus Wind Farm Project in Mexico

And largest operating wind project in the

Latin America.

Location: MexicoApproval: 2009Cost: US$600 millionIDB Loan: US$45 millionplus US$30 million CTF Sponsor: Acciona

EURUSFirst large scale wind farm in Mexico

EURUSFirst large scale wind farm in Mexico

Project Type: Hydroelectric Project in Costa Rica

B loan funded by institutional investors. Project will represent 10% of CR energy’s installed capacity

Location: Costa RicaApproval: 2010Cost: US$1.44 billionIDB Loan: US$200 million

Loan + GuaranteeSponsor: ICE

REVENTAZONInnovative financial structure

REVENTAZONInnovative financial structure

Project Type: First operational large wind farm in Uruguay

Bankability enhancements helped

mobilize investments in UR renewable energy (US$2.3 bn). Tracking

CO2 emissions through supply chain

Location: Uruguay

Approval: 2012

Cost: US$153 million

IDB Loan: US$42 million

Sponsor: Abengoa

PALMATIRCatalyzing non conventional renewable energy

PALMATIRCatalyzing non conventional renewable energy

Project Type: Corporate Loan EGP

Enel’s Bii Nee Stipa project will contribute

to Mexico’s goal of reducing 50 % of its

greenhouse gas emissions by 2020

Location: MexicoApproval: 2012Cost: US$169 millionIDB Loan: US$76 million

EGP MexicoSupporting EGP’s investments in a 74MW wind farm in Oaxaca, Mexico

EGP MexicoSupporting EGP’s investments in a 74MW wind farm in Oaxaca, Mexico

Project Type: Photovoltaic Solar Power in Atacama Desert

First large-scale solar power plants in Chile.

Contributing to reducing CO2

emissions by 56,000 tons per annum

Location: Atacama, Chile

Approval: 2013

Cost: US$82.7 million

IDB Loan: US$21 million + C2F 21 million

Sponsor: SolarPack

POZO ALMONTEGiving solar power a boost

POZO ALMONTEGiving solar power a boost

B Loan Program

Loan Loan AgreementAgreement

A + B A + B LoansLoans

B LoanB Loan

Participation Participation AgreementAgreement

ParticipantsParticipants BorrowerBorrowerIDBIDB

One loan agreement – IDB is lender of record and administers entire loan IDB and B Lenders as Senior Lenders Participation structure allows participants to benefit from IDB’s privileges and immunities

Canadian Climate Fund - C2F

“Mountain of Defeat” - High and uncertain costs for early commercial projects

IDB’s value proposition

oSector and financial expertise with regional knowledge oLong term financing with tailored repayment schedules oCompetitive financial products and termsoAbility to mobilize additional sources of financing or support: B loans, co-loans, China Funds, C2FoExemption from withholding taxes and de facto preferred creditor statusoEnvironmental and social leadershipoShared value, innovation, outreach and dissemination

Five things you need to know about the IDB and Sustainability

• We are delivering on our sustainability commitments: Thirty-three percent of IDB lending in 2014 targeted environmental sustainability, climate change initiatives and renewable energy, totaling US$4.4 billion.

• We are adding value to our projects through the implementation of safeguards, to minimize environmental and social harm and to maximize positive environmental and social outcomes of our work: 88% of projects with high environmental and social risks rated satisfactory in safeguard mitigation measures.

• We are implementing a new strategy and vision for sustainable infrastructure, one that sees a shift from infrastructure being a fixed asset to infrastructure that is planned, built, and maintained as a service for people.

• We innovate through special initiatives that support the sustainability agenda: we place an emphasis on urban sustainability through the Emerging and Sustainable Cities Initiative, and we continue to leverage support from the Climate Investment Funds, the GEF and various donor agencies.

• We are improving gender and diversity mainstreaming: incorporating gender related results and sex-disaggregated indicators into more of our projects, to ensure that the benefits are felt by all.

THANK YOU!