Infrastructure Crisis Facility – Debt Pool (ICF-DP)
ICF-DP was a time-limited Facility, set up in 2009 and closed to new business in 2015, providing long-tenor loans to support infrastructure projects which had become stranded by the global financial crisis
ICF-DP was established with a pledge of €500m from the Federal Republic of Germany via its DFI KfW. In addition to its work in sub-Saharan Africa and south-east Asia, ICF-DP operated in emerging markets in the Middle East, eastern Europe, Latin and Central America
Projects that reached Financial Close in 2015
Multiple countries Karadeniz
Guatemala Generadora San Mateo (GSM) and Generadora San Andres (GSA)
Achievements in 2015
In its final year of active operations, ICF-DP achieved financial close on three projects.
Amongst these, the Karadeniz project saw the completion of an innovative redesign of a ship to incorporate a power plant; the ship will sail to Indonesia, bringing power to 85,829 people in North Sulawesi and 174,227 people in Gorontalo who currently have no access to electricity.
The HKA project in Turkey will provide $30m finance to build four integrated waste management facilities collecting and using organic waste to produce a highly competitive fertiliser product. Separating organic and inorganic waste will reduce landfill and associated methane emissions.
Other notable highlights
In Ghana, the Takoradi thermal power plant expansion was completed and began to generate power. This expansion reduces the cost of electricity and removes the need for consumers to operate expensive, polluting diesel back-up generators.
In the Kurdistan Region of Iraq, ICF-DP committed $50m to Zakho, an 875MW natural gas-fired power plant located near the city of the same name. Although the region currently presents considerable challenges including the ongoing conflict in nearby Syria, it is for this reason that the project will deliver high development impact.
2016 and beyond
Over the next 12-15 months, ICF-DP will continue to disburse loans it has committed.
ICF-DP will now wind down over an extended period taking repayments on its existing long-tenor loans and returning these to KfW. Having received one extension of two years to the Debt Pool investment period which was driven by the donor, ICF-DP anticipates that KfW’s original pledge of €500m will be returned to the German taxpayer in its entirety by 2027.
Reviewing seven years of ICF-DP
Andrew Bainbridge is Chair of ICF-DP’s Board
ICF-DP is the only PIDG Facility to have been established with a finite lifespan and it ceased making commitments in December 2015 on time and as planned.
We are very proud of our achievements over the past seven years, in the wake of the global financial crisis. ICF-DP provided crucial ‘last-mile’ financing to support high-impact infrastructure projects which would otherwise have faltered or failed to progress.
Since its inception, ICF-DP has committed $555.3m, achieving financial close or repayment on 18 projects.
Its greatest exposure is in the transportation and power sectors; the projects in these sectors are expected to have a positive impact on the lives of 6.5 million people.
The power sector projects will allow 3.5 million people to access electricity, enhancing their ability to work, study and communicate.
Transportation projects supported by ICF-DP will allow a greater flow of goods and services, stimulating economic activity and supporting the maintenance of vital personal connections.
With the steady return of traditional lenders to the infrastructure market, we are pleased to have provided the bridge to a ‘new normal’.
Kurdistan Region of Iraq (KRI) Zakho Power Project
The KRI lies close to the border with Syria; although politically stable, its population has grown rapidly in recent years, with over one million migrants fleeing conflict in neighbouring areas. The region’s power deficit is exacerbated by its limited capacity to capture and pipe its considerable natural gas resource to customers. The 875MW Zakho Power Project will maximise the use of KRI’s natural gas, supplying vital power to a large population.
The principal private investor in the Zakho project is Unit NV of Turkey. ICF-DP has committed to loan $50m as part of a syndicate which also includes World Bank Group’s IFC, enabling the project, which could not otherwise attract commercial financing, to go ahead.
The Kurdistan Regional Government (KRG) has plans to build an extensive transmission network which will eventually allow KRI to become a power hub for the region; stimulating economic growth and generating foreign earnings from fuel exports.
Managing municipal waste and developing an innovative organo-mineral fertiliser business
The Government of Turkey is working to meet EU regulations on safe and sustainable waste disposal. HKA is the country’s first private solid waste management company, separating organic and inorganic municipal solid waste (MSW), reducing landfill and driving down methane emissions. The ICF-DP loan will support the construction phase of integrated waste management facilities across four municipalities, inclusive of MSW collection, sorting, and processing. For disposal of residues, the project will build a new 480,000-tonne sanitary landfill in the municipality of Bilecik.
Using the organic waste, HKA will produce a competitively-priced organo-mineral fertiliser. The project will also add 5MW of installed biogas power generation to the national grid and will facilitate recycling of appropriate products. Designed to be financially self-sustaining, HKA will sell the fertiliser, power and other products
The new organo-mineral fertiliser is designed for Turkish soils and has been proven to be superior to others on the market. HKA hopes to widen the use of its locally-produced soil-enriching product to maximise yields and incomes for smallholders and farmers. The product will reduce Turkey’s dependence on fertiliser imports and, due to its organic matter content, will prevent ground-water pollution by enabling plants to utilise nearly all of the chemical elements it contains.
The project is currently being certified against The Gold Standard, an international standard for high-quality emissions reductions projects established as part of the Clean Development Mechanism.
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