Risk sharing with Multilateral Financial Institutions in infrastructure and energy project financing : effect on capital relief for commercial banks

(Matsukawa and Habeck, 2007) analyse the main instruments for risk mitigation in infrastructure financing with Multilateral Financial Institutions (MFIs). Their review coincided with the global financial crisis of 2007-08, and is highly relevant in current times considering the sovereign debt crisis, the lack of available capital and the increases in bank regulation in Western economies. The current macroeconomic environment has seen a slowdown in the level of finance for infrastructure projects, as they pose a higher credit risk given their requirements for long term investments. The rationale for this work is to look for innovative solutions that are focused on the credit risk mitigation of infrastructure and energy projects whilst optimizing the economic capital allocation for commercial banks. This objective is achieved through risk-sharing with MFIs and looking for capital relief in project finance transactions. This research finds out the answer to the main question: "What is the impact of risk-sharing with MFIs on project finance transactions to increase their efficiency and viability?", and is developed from the perspective of a commercial bank assessing the economic capital used and analysing the relevant variables for it: Probability of Default, Loss Given Default and Recovery Rates, (Altman, 2010). An overview of project finance for the infrastructure and energy sectors in terms of the volume of transactions worldwide is outlined, along with a summary of risk-sharing financing with MFIs. A review of the current regulatory framework beneath risk-sharing in structured finance with MFIs is also analysed. From here, the impact of risk-sharing and the diversification effect in infrastructure and energy projects is assessed, from the perspective of economic capital allocation for a commercial bank. CreditMetrics (J. P. Morgan, 1997) is applied over an existing well diversified portfolio of project finance infrastructure and energy investments, working with the main risk capital measures: economic capital, RAROC, and EVA. The conclusions of this research show that economic capital allocation on a portfolio of project finance along with risk-sharing with MFIs have a huge impact on capital relief whilst increasing performance profitability for commercial banks. There is an outstanding diversification effect due to the portfolio, which is combined with risk mitigation and an improvement in recovery rates through Partial Credit Guarantees issued by MFIs. A stress test scenario analysis is applied to the current assumptions and credit risk model, considering a downgrade in the rating for the commercial bank (lender) and an increase of default in emerging countries, presenting a direct impact on economic capital, through an increase in expected loss and a decrease in performance profitability. Getting capital relief through risk-sharing makes it more viable for commercial banks to finance infrastructure and energy projects, with the beneficial effect of a direct impact of these investments on GDP growth and employment. The main contribution of this work is to promote a strategic economic capital allocation in infrastructure and energy financing through innovative risk-sharing with MFIs and economic pricing to create economic value added for banks, and to allow the financing of more infrastructure and energy projects. This work suggests several topics for further research in relation to issues analysed. (Matsukawa and Habeck, 2007) analizan los principales instrumentos de mitigación de riesgos en las Instituciones Financieras Multilaterales (IFMs) para la financiación de infraestructuras. Su presentación coincidió con el inicio de la crisis financiera en Agosto de 2007, y sus consecuencias persisten en la actualidad, destacando la deuda soberana en economías desarrolladas y los problemas capitalización de los bancos. Este entorno macroeconómico ha ralentizado la financiación de proyectos de infraestructuras. El actual trabajo de investigación tiene su motivación en la búsqueda de soluciones para la financiación de proyectos de infraestructuras y de energía, mitigando los riesgos inherentes, con el objeto de reducir el consumo de capital económico en los bancos financiadores. Este objetivo se alcanza compartiendo el riesgo de la financiación con IFMs, a través de estructuras de risk-sharing. La investigación responde la pregunta: "Cuál es el impacto de risk-sharing con IFMs, en la financiación de proyectos para aumentar su eficiencia y viabilidad?". El trabajo se desarrolla desde el enfoque de un banco comercial, estimando el consumo de capital económico en la financiación de proyectos y analizando las principales variables del riesgo de crédito, Probability of Default, Loss Given Default and Recovery Rates, (Altman, 2010). La investigación presenta las cifras globales de Project Finance en los sectores de infraestructuras y de energía, y analiza el marco regulatorio internacional en relación al consumo de capital económico en la financiación de proyectos en los que participan IFMs. A continuación, el trabajo modeliza una cartera real, bien diversificada, de Project Finance de infraestructuras y de energía, aplicando la metodología CreditMet- rics (J. P. Morgan, 1997). Su objeto es estimar el consumo de capital económico y la rentabilidad de la cartera de proyectos a través del RAROC y EVA. La modelización permite estimar el efecto diversificación y la liberación de capital económico consecuencia del risk-sharing. Los resultados muestran el enorme impacto del efecto diversificación de la cartera, así como de las garantías parciales de las IFMs que mitigan riesgos, mejoran el recovery rate de los proyectos y reducen el consumo de capital económico para el banco comercial, mientras aumentan la rentabilidad, RAROC, y crean valor económico, EVA. En escenarios económicos de inestabilidad, empeoramiento del rating de los bancos, aumentos de default en los proyectos y de correlación en las carteras, hay un impacto directo en el capital económico y en la pérdida de rentabilidad. La liberación de capital económico, como se plantea en la presente investigación, permitirá financiar más proyectos de infraestructuras y de energía, lo que repercutirá en un mayor crecimiento económico y creación de empleo. La principal contribución de este trabajo es promover la gestión activa del capital económico en la financiación de infraestructuras y de proyectos energéticos, a través de estructuras innovadoras de risk-sharing con IFMs y de creación de valor económico en los bancos comerciales, lo que mejoraría su eficiencia y capitalización. La aportación metodológica del trabajo se convierte por su originalidad en una contribución, que sugiere y facilita nuevas líneas de investigación académica en las principales variables del riesgo de crédito que afectan al capital económico en la financiación de proyectos.

Nonequlibrium particle and energy currents in quantum chains connected to mesoscopic Fermi reservoirs

We propose a model of nonequilibrium quantum transport of particles and energy in a system connected to mesoscopic Fermi reservoirs (mesoreservoir). The mesoreservoirs are in turn thermalized to prescribed temperatures and chemical potentials by a simple dissipative mechanism described by the Lindblad equation. As an example, we study transport in monoatomic and diatomic chains of noninteracting spinless fermions. We show numerically the breakdown of the Onsager reciprocity relation due to the dissipative terms of the model.

Particle and energy transport in quantum disordered and quasi-periodic chains connected to mesoscopic Fermi reservoirs

We study a model of nonequilibrium quantum transport of particles and energy in a many-body system connected to mesoscopic Fermi reservoirs (the so-called meso-reservoirs). We discuss the conservation laws of particles and energy within our setup as well as the transport properties of quasi-periodic and disordered chains.

Use of calculus of variations to determine the shape of hovering rotors of minimum power and its application to micro air vehicles

In this paper, calculus of variations and combined blade element and momentum theory (BEMT) are used to demonstrate that, in hover, when neither root nor tip losses are considered; the rotor, which minimizes the total power (MPR), generates an induced velocity that varies linearly along the blade span. The angle of attack of every blade element is constant and equal to its optimum value. The traditional ideal twist (ITR) and optimum (OR) rotors are revisited in the context of this variational framework. Two more optimum rotors are obtained considering root and tip losses, the ORL, and the MPRL. A comparison between these five rotors is presented and discussed. The MPR and MPRL present a remarkable saving of power for low values of both thrust coefficient and maximum aerodynamic efficiency. The result obtained can be exploited to improve the aerodynamic behaviour of rotary wing micro air vehicles (MAV). A comparison with experimental results obtained from the literature is presented.

STC power for 15MW of PV comparing nameplate, initial power and power after 4 years

To date, the majority of quality controls performed at PV plants are based on the measurement of a small sample of individual modules. Consequently, there is very little representative data on the real Standard Test Conditions (STC) power output values for PV generators. This paper presents the power output values for more than 1300 PV generators having a total installed power capacity of almost 15.3 MW. The values were obtained by the INGEPER-UPNA group, in collaboration with the IES-UPM, through a study to monitor the power output of a number of PV plants from 2006 to 2009. This work has made it possible to determine, amongst other things, the power dispersion that can be expected amongst generators made by different manufacturers, amongst generators made by the same manufacturer but comprising modules of different nameplate ratings and also amongst generators formed by modules with the same characteristics. The work also analyses the STC power output evolution over time in the course of this 4-year study. The values presented here could be considered to be representative of generators with fault-free modules.

Pressurized Irrigation Dealing with Water and Energy Efficiencies

En la conferencia se expone la situación en España de los riegos a presión considerando los condicionantes de escasez de agua y el precio de la energía.

On track for solar grade silicon through a siemens process-type laboratory reactor: operating conditions and energy savings

Polysilicon cost impacts significantly on the photovoltaics (PV) cost and on the energy payback time. Nowadays, the besetting production process is the so called Siemens process, polysilicon deposition by chemical vapor deposition (CVD) from Trichlorosilane. Polysilicon purification level for PV is to a certain extent less demanding that for microelectronics. At the Instituto de Energía Solar (IES) research on this subject is performed through a Siemens process-type laboratory reactor. Through the laboratory CVD prototype at the IES laboratories, valuable information about the phenomena involved in the polysilicon deposition process and the operating conditions is obtained. Polysilicon deposition by CVD is a complex process due to the big number of parameters involved. A study on the influence of temperature and inlet gas mixture composition on the polysilicon deposition growth rate, based on experimental experience, is shown. Moreover, CVD process accounts for the largest contribution to the energy consumption of the polysilicon production. In addition, radiation phenomenon is the major responsible for low energetic efficiency of the whole process. This work presents a model of radiation heat loss, and the theoretical calculations are confirmed experimentally through a prototype reactor at our disposal, yielding a valuable know-how for energy consumption reduction at industrial Siemens reactors.

Balanced scorecard to improve strategic management control at School of Mines and Energy, Universidad Politécnica de Madrid

We studied the situation in Spanish public universities regarding the use of the Balanced Scorecard (BSC), as an instrument of control and strategic management. Also, we studied its application to the School of Mines and Energy at Universidad Politécnica de Madrid. The main advantage of the BSC is that improves the organizational structure of the workplace and the achievement of the objectives that ensure long-term success. First we review the strategy for success used in the Spanish educational system and specifically in the Spanish public universities. Then using the BSC and applying the main strategic lines for the successful management of the School of Mines and Energy at Universidad Politécnica de Madrid. The strategic lines affect all the college groups and the success of the BSC tool is to increase communication between the faculties, personal auxiliary, students and society in general that make up the university. First we performed a SWOT analysis (DAFO in Spanish) there are proposed different perspectives that focus the long-term strategic objectives. The BSC is designed based on the strategic objectives that set the direction through using indicators and initiatives, the goals are achieved up to the programmed schedule. In the perspective of teaching, objectives are set to update facilities and increase partnerships with other universities and businesses, encouraging ongoing training of staff and improved coordination and internal communication. The internal process perspective aims at improving the marketing, the promotion of the international dimension of the school through strategic alliances, better mobility for students and professors and improved teaching and research quality results. It continues with improving the image of the school between customer?s perspective, the quality perceived by students and the loyalty of the teaching staff by retaining talent. Finally, the financial perspective which should contain costs without harming the quality, improving the employability of students and achieve relevant jobs at teaching and research through international measurement standards.

Construction cost and energy consumption resulting from energy retrofitting in an apartment building in Madrid (Spain).

This theoretical study analyzes the relation between the measures necessesary for the energy retrofitting of a residential building constructed in Madrid, their cost and the improvement of the energy rating of the dwellings. The aim of this work is to establish an evaluation methodology that allows developers and architects to obtain conclusions and orientates therm in the decisioin-making process. It will allow finding the most suitable cost-effective solutions in each case. This paper describes the methodology and the findings obtained. Energy retrofitting and the improvement of the energy behaviour of the building depend on the selection of the retrofitting solutions and also on the investment. In this case study to achieve the best energy rates it is necessary to improve the thermal performance of the envelope as well as the energy systems. Energy retrofitting means an increase in property value but it can't only be considered in economic terms. It is necessary to take into account unquantifiable aspects as increased comfort, improved sound insulation, livability, health, or the elimination of energy poverty situations.

Reduced carbon and energy footprint in highway operations: the Highway Energy Assessment (HERA) methodology

Global demand for mobility is increasing and the environmental impact of transport has become an important issue in transportation network planning and decision-making, as well as in the operational management phase. Suitable methods are required to assess emissions and fuel consumption reduction strategies that seek to improve energy efficiency and furthering decarbonization. This study describes the development and application of an improved modeling framework – the HERA (Highway EneRgy Assessment) methodology – that enables to assess the energy and carbon footprint of different highways and traffic flow scenarios and their comparison. HERA incorporates an average speed consumption model adjusted with a correction factor which takes into account the road gradient. It provides a more comprehensive method for estimating the footprint of particular highway segments under specific traffic conditions. It includes the application of the methodology to the Spanish highway network to validate it. Finally, a case study shows the benefits from using this methodology and how to integrate the objective of carbon footprint reductions into highway design, operation and scenario comparison.

Variable-density jet flows induced by concentrated sources of momentum and energy

The planar and axisymmetric variable-density flows induced in a quiescent gas by a concentrated source of momentum that is simultaneously either a source or a sink of energy are investigated for application to the description of the velocity and temperature far fields in laminar gaseous jets with either large or small values of the initial jet-to-ambient temperature ratio. The source fluxes of momentum and heat are used to construct the characteristic scales of velocity and length in the region where the density differences are of the order of the ambient density, which is slender for the large values of the Reynolds number considered herein. The problem reduces to the integration of the dimensionless boundary-layer conservation equations, giving a solution that depends on the gas transport properties but is otherwise free of parameters. The boundary conditions at the jet exit for integration are obtained by analysing the self-similar flow that appears near the heat source in planar and axisymmetric configurations and also near the heat sink in the planar case. Numerical integrations of the boundary-layer equations with these conditions give solutions that describe accurately the velocity and temperature fields of very hot planar and round jets and also of very cold plane jets in the far field region where the density and temperature differences are comparable to the ambient values. Simple scaling arguments indicate that the point source description does not apply, however, to cold round jets, whose far field region is not large compared with the jet development region, as verified by numerical integrations

A system of systems engineering approach to design new smarter and energy efficient products

The concept of smartness of energy efficient products and systems from a business perspective has been investigated by several authors. The problem of understanding, designing, engineering and governing these technologies requires new concepts. The emergence of these modern technologies causes a myriad of interconnected systems, which are working together to satisfy the necessities of modern life. The problem of understanding, designing, engineering, and governing these technologies requires new concepts. Development of System of System Engineering (SoSE) is an attempt by the systems engineering and science community to fulfill this requirement.

Graphene foam functionalized with electrodeposited nickel hydroxide for energy applications

The need of new systems for the storage and conversion of renewable energy sources is fueling the research in supercapacitors. In this work, we propose a low temperature route for the synthesis of electrodes for these supercapacitors: electrodeposition of a transition metal hydroxide–Ni(OH)2 on a graphene foam. This electrode combines the superior mechanical and electrical properties of graphene, the large specific surface area of the foam and the large pseudocapacitance of Ni(OH)2. We report a specific capacitance up to 900 F/g as well as specific power and energy comparable to active carbon electrodes. These electrodes are potential candidates for their use in energy applications.

Productive performance of brown-egg laying pullets from hatching to 5 weeks of age as affected by fiber inclusion, feed form, and energy concentration of the diet

The effects of fiber inclusion, feed form, and energy concentration of the diet on the growth performance of pullets from hatching to 5 wk age were studied in 2 experiments. In Experiment 1, there was a control diet based on cereals and soybean meal, and 6 extra diets that included 2 or 4% of cereal straw, sugar beet pulp (SBP), or sunflower hulls (SFHs) at the expense (wt/wt) of the whole control diet. From hatching to 5 wk age fiber inclusion increased (P < 0.05) ADG and ADFI, and improved (P < 0.05) energy efficiency (EnE; kcal AMEn/g ADG), but body weight (BW) uniformity was not affected. Pullets fed SFH tended to have higher ADG than pullets fed SBP (P = 0.072) with pullets fed straw being intermediate. The feed conversion ratio (FCR) was better (P < 0.05) with 2% than with 4% fiber inclusion. In Experiment 2, 10 diets were arranged as a 2×5 factorial with 2 feed forms (mash vs. crumbles) and 5 levels of AMEn (2,850, 2,900, 2,950, 3,000, and 3,050 kcal/kg). Pullets fed crumbles were heavier and had better FCR than pullets fed mash (P < 0.001). An increase in the energy content of the crumble diets reduced ADFI and improved FCR linearly, but no effects were detected with the mash diets (P < 0.01 and P < 0.05 for the interactions). Feeding crumbles tended to improve BW uniformity at 5 wk age (P = 0.077) but no effects were detected with increases in energy concentration of the diet. In summary, the inclusion of moderate amounts of fiber in the diet improves pullet performance from hatching to 5 wk age. The response of pullets to increases in energy content of the diet depends on feed form with a decrease in feed intake when fed crumbles but no changes when fed mash. Feeding crumbles might be preferred to feeding mash in pullets from hatching to 5 wk age.