Funding commitments

The Program is fully funded. The results-based nature of the GET FiT Program is strongly dependent upon predictable and credible commitments from funders in order to prove successful. Further, it requires a certain degree of active follow-up and flexibility in order to maintain a healthy cash balance throughout the Program. To this end, four development partners have taken up the challenge and provided GET FiT with the necessary funding; Government of Norway, Government of UK (through DECC and DFID), Germany (BMZ, BMU) and the EU (through EU ITF).

To date some MEUR 91 (subject to exchange rate fluctuations as the Norwegian and the UK DECC funding are provided in Norwegian Krone and British Pounds respectively) have been committed to the Program. These funds are to be used by the Program management towards the overriding objectives. While the Steering Committee (where the donors are represented) provides policy guidance concerning implementation, the bulk of funding (commitments to developers) is subject to the decisions of the Investment Committee, supported by the Secretariat.

Notably, the Program’s capacity to support project developers is subject to an exchange rate risk. While GET FiT funds are made available in EUR, the GET FiT Premium Payments are calculated in USD (as the REFiT is denominated in USD). Hence, when the EUR depreciates relative to the USD, the capacity to support developers will be reduced and vice versa.  To ensure that GET FiT can fully meet its commitments with respect to premium payments to developers, the Developer Financing agreements are signed in EUR, the premium payment being fixed based on the exchange rate on the day of contract signature.  

The recent rapid depreciation of the EUR towards the USD means that a Developer Finance Agreement signed in January 2015 (EUR 1 = USD 1.15) costs GET FiT 12 % more in EUR than it would have in September 2014 (EUR 1 = USD 1.30 USD). In a scenario where the current EUR vs. USD level is maintained throughout signing of the remaining Developer Finance Agreements, the GET FiT budget would be able to support a portfolio of some 150 MW total capacity, as opposed to the original 170 MW target.  Even further depreciation of the EUR relative to the USD could potentially force an additional reduction of the portfolio. 

With the current EUR/USD exchange rate level, the commitments would not enable the GET FiT to fully achieve on several pre-defined key output indicators including MW, GWh and emission reductions.

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Table 2: Overall donor commitments to GET FiT. Net amounts are subject to current exchange rates and
deduction of management fees