Disbursements projections

Committed disbursements from the GET FiT Program go towards four purposes; i) payments to approved projects, with 50 % paid at commercial operation date and 50% paid in the form of results based support over the first five years of operation, subject to actual production, ii) payments to consultants under the Technical Assistance Facility for ERA, iii) advisor and consultants for the overall management and monitoring of the Program, and iv) management fee to KfW. Figure 9 illustrates the real (up to and including 2014) and expected distribution of committed payments for the first 5-6 years of the Program. The projections are based on agreements signed with developers so far, status of approved projects and the current expectations regarding RFP Round 3 results. It is noted that consultant payments under the Technical Assistance Facility are relatively high in early years, while payments to project support are expected to take up the lion’s share of the disbursements by 2016. Given the expected timing of the current portfolio, some initial commercial operation date payments are expected already in early 2015 (bagasse projects) and significant commercial operation date payments are expected in 2016-2018. Due to the result based disbursement during first five years of operation, the last payments cannot be expected before 2023.

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Figure 9: Projected annual payments (premium payments and consultants) under GET FiT.
Current projections suggest funds will be exhausted by 2023


Figure 10 shows the relative shares of the various cost components under the GET FiT Program. Roughly 8 % of the overall funds are tied to management, implementation and the Technical Assistance Facility, while more than 90 % of the total commitments are expected to be disbursed as premium payments.  

Recent Program developments are likely to result in some adjustments to the current spending distribution. Specifically, consulting costs are likely to increase mainly due to:

  1. a higher number of projects being supported under the Program. Currently we estimate that a total of 20-251  projects will be supported, up from initially 12-15. This is due projects being on average smaller in terms of MW installed than in initial estimates and the inclusion of the four solar projects into the portfolio; and 
     
  2. a general increase in the demand for bilateral advice (elaborated in Chapter 2.6). 


Furthermore, it must be noted that due to the innovative design of the Program new issues are arising and are likely to continue to arise during implementation, e.g. the challenges with regard to interconnection and grid integration of the GET FiT projects, that have an impact on the consultancy costs.

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Figure 10 - GET FiT projected payment distribution. Approximately 90 % of commitments to GET FiT are projected
to be disbursed as premium payments