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the broadcast is now starting all attendees are in listen-only mode thank you all for joining us today for our webinar on how cooling as a service is set to revolutionize the cooling industry invaded was either from the energy efficiency division of the International Energy Agency and I'm joined by my colleague Emily Mack Walter we will be moderating the webinar today I very much hope that you your families and friends are well and remain so we are in an unprecedented situation the IEA is hard at work on developing analysis and policy recommendations to support government's especially on how economic stimulus will be strategically used to support clean energy transitions we are very pleased today to have a positive stopping to share with you on innovative approach that can help accelerate the deployment of efficient and sustainable technologies and improve access to Cooley which in many parts of the world is increasingly essential to support health productivity and development we have some great speakers lined up for you today thomas from basel energy person basel a agency for sustainable energy will explain their cooling as a service concept provide us with insights of its origins and share lessons learned and experiences to date from a range of of pilots and demonstration projects that have been implemented around the world and give us an update on on what our future plans and opportunities and jim and peter from sustainable development Capital Limited will share their insights as investors and representatives of the financial community this will be followed by an opportunity for you to participate in the discussion by providing your questions more questions please use the chat box enter your questions please ask your questions in English you can also use this opportunity to give us suggestions improve the topics or or issues that you'd like to see covered in other webinars the webinar will be recorded and the presentation will be available online and we will be sending you an email with the link before I hand over to Thomas just a brief overview of the super efficient equipment and appliance deployment initiative the initiative brings together 19 member countries partners and the broad community of interested stakeholders to create opportunities to share experiences and learnings and development of measures to stimulate the development and deployment of efficient products it's an initiative under the clean energy ministerial that BIA is coordinating and while this is part of our webinar series of cooling we within cede cover a full range of equipment and an appliances and we are in the process of exploring opportunities to do similar webinar series they are focusing on other product categories see your feedback and suggestions and these would be interesting as well and three it is still currently in a phase of redesign which we started when the ia took over the coordination of the initiative last September we have a lot of good ideas on types of activities that could be useful to develop a vibrant community of our best practice and opportunities for knowledge sharing and again we welcome your views and your suggestions and now it's pleasure to hand it over to Thomas who will take us on a journey to understand how cooling is a service works and what benefits it can offer to us please Thomas thank you vida and to the International Energy Agency as a whole as well as to Peter and Jim for joining me as panelists here and to each other one of you of course you take the time to listen to our experience with this new business model next before I start I'd like to give some context about that based organization I work for which is a not-for-profit Foundation and a specialist partner of United Nations environments founded in 2001 we design develop and implement innovative business models financing structures and risk mitigation mechanisms to as incentivize investments in energy efficiency renewable energy and climate change solutions over the past three years we have increasingly focused on efficient cooling through various partnerships with the Kigali cooling efficiency program case app which is a philanthropy under climate works based in California and a 2018 we launched a cooling as a service initiative which aims to increase the adoption of more efficient cooling systems through the use of a new business model next video so to start with to give a sense of scale I'd like to show some data extracted from the future of : report actually prepared by the IEA and so first of all in 2018 air conditioning alone consumed 10% of the world's electricity across all sectors and this is a to triple by 2050 which means that air conditioning will consume as much electricity as China does in total today so this demand growth is due to economic development and population growth in particular in warm regions as well as to rising temperatures and many of the systems currently in operation also use refrigerants which which having a significant impact on climate change rather than their climate friendly alternatives next yeah the air conditioning market is set to grow steadily during the next years with households and companies investing around 210 billion u.s. dollar each year in new air commissions systems over the next 30 years and actually we see this as an opportunity because most of this capital could be invested in clean and efficient cooling if we managed to overcome some of the key market barriers next this diagram shows how the lifecycle cost of an air conditioning system is divided between the initial investment and the operating costs and you can see that actually the main component contributing to the lifecycle cost so the cooling equipment is electricity consumption the initial investment is only a small fraction so in other words the total cost of ownership of cooling system is most effectively reduced by installing the most efficient systems however despite the clear economic benefits of increasing energy efficiency for building owners and businesses investments in more and cleaner cooling are not being made at the scale expected and in fact they do from the future of cooling shows that customers purchase systems that are significantly less efficient than the best available technology so our question is why does this happen next and this can be explained by several factors that we have identified first customers are normally sensitive to purchase price even though energy cost savings would ultimately make up for the additional upfront cost second customers often lack trust in the performance of the equipment whether the promised savings will really be achieved and third customers prefer to invest in their core business but it are also exactly these reasons that gives space to the opportunity to transition to a much more appropriate business model that overcome all of these barriers that can create significant customer value next servitization or moving from selling products to selling services or really moving from a transaction model to a subscription model and in coolant we call this cooling as a service next and products so cooling as a service is a model that ism was presented to the global innovation lab for climate finance I had a reputable group of institutions and investors in government the private sector development finance and philanthropy who endorsed basically equal the service is one of the most innovative actual and scalable financial instruments of 2019 among more than 250 applicants and the way it works is customers pay for the cooling service per unit of cooling consumed instead of actually investing in the equipment and the technology provider owns the cooling system maintains it and covers all operational costs including electricity and water so this means it's in the providers own interest to install the equipment with highest efficiency as well as to offer excellent preventive maintenance to reduce the cost to deliver this service so what used to be a capital expensive for building owners now becomes an operational expense cooling as a service encourages the use of more efficient cooling equipment because of overall cost of this service will be lower for those technologies that have lower operating costs the the model includes different possible financial structures to enable recapitalisation of cast providers for example through special purpose vehicles or silly defect mechanism and in itself product as the service models are not new and are growing rapidly across industries many of no of you know the seraphs model since many years in which instead of selling coffee machines the company charges its customer per copy and similarly rolls-royce has been selling power by the hour since many years rather than selling the engines to airplanes and the solar sector of Power Purchase Agreements have really enabled the unexpectedly rapid uptake of photovoltaic technology by enabling customers to participate about hours of solar energy instead of having to invest in the solar panels essentially eliminating the performance risks perceived by customers and some companies now like Volvo are offering their cars and a service contracts and the MCM Schiphol Airport signed an agreement with Philips to receive lighting as a service banker out of lighting so in the air-conditioning sector more broadly cooling including refrigeration really currently at a brink of a revolution and servitization is now attracting significant attention across regions because the model has a potential to be a true game changer for the cooling industry making more efficient cool technologies more competitive and cheaper less efficient technologies next so this is just to show a little bit the differentiation between cooling as a source and other models there are many mechanisms available that these two are normally confused with cooling is a service the first one is what we call escrow models so it could be an S & S Co could be implementing cooling as a service that's not the issue but here I just want to make the difference between the typical shared savings and guaranteed savings energy performance contracts and casts because in the case of cash payments the the price per unit consumers agreed in advance as a function of actual usage and payments well and the EPC contracts energy performance contracts the payments depend on energy savings and this can create conflicts while in Cass's is not the case and district cooling is the case in which one large infrastructure is offering cooling to several buildings while cooling in services really offering or enabling one building to outsource the cooling service next the model has advantages for the main stakeholders involved which are basically cooling users suppliers as well as investors next for customers the model overcomes the key barriers that we raised before because the customer does not need to make the initial investment is no longer exposed to the performance risk of the equipment and can focus on its core business by fully outsourcing the coolant service next for technology providers they move to cooling as a service allows to create additional value for the customer and to fully deploy the potential of the technology because they are now operating it it can also generate predictable continuous and additional revenue streams throughout the product lifecycle and it is a strategic response to both trade wars which apply normally to goods rather than services and sustainability challenges by stimulating a circular economy in which assets are redesigned for long-term use next investors have green financing available and actually looking for projects to allocate these funds to and cooling in the services is it safe and easy to understand vehicle generate a pipeline for investors to create green portfolios because cash also enables fan insurers which can be banks or funds to invest in assets generating cash flows and Peter and Jim can get their perspective later on from an investment point of view next though and next again so without going too much into detail I'd like to show one a couple of financial structures that can enable this scale-up of cooling as a service because we have now providers offering a service and having to own the asset this first one is what we call sale and leaseback it's a form of asset-backed five minutes so after a solution provided signs one or more cooling as a service contracts with customers these assets which are now still owned by the solution provider can be sold to a bank and then leased back from that bank the contracts with the customers serve as an additional collateral to the bank and any applicable payment guarantee which could reduce default risk for the technology provider can also be endorse to the bank next and all the financial structures of course are possible this one is the more classical one it's based on project finance in which a special purpose vehicle there is set up which purchases the equipment from the technology provider and is the one signing the contract with the customers the next so what are we doing at pace so we are this NGO and we are working together with K SEP key gala coding efficiency program and we're leading the cooling deserves initiative to stimulate the markets to adopt this model so the initiative includes a couple of components first we have been developing tools to enable the model and these include cooling is a service contracts pricing models and financial structures to monetize cash projects second we are working with technology providers and investment funds to test and pilot the model in Latin America Africa and Asia thirdly we have created partnerships with different actors to establish the cooling in service alliance which today includes almost 40 organizations including global cooling system manufacturers such as dike in Johnson Controls trains investment funds such as this and and others and also organizations such as the world Green Building Council or sustainable energy for all who helped to spread the word about the model and finally our goal is also agreed as to spread the word about the model through events workshops webinars publications and for instance we had our first matchmaking events taking place earlier this year in South Africa of course with the global health situation we are planning we are going virtual planning a global II conference and cooling in the service and the aim of these conferences in these events is to bring together potential casts adopters providers and investors next one of the tools that we have developed is an economic model and you can see here some results that show that cooling service can actually be the most attractive scenario for customers these results can be found in the paper that we have developed with together with the global innovation lab for climate financing is available online on the lab website and the model itself will be made public this summer it will not be the exact same model will be a model that can be easily used by by the different stakeholders next on the world map this world map you can see were cooling in service is currently being implemented so we are supporting technology providers in the Caribbean in Dominican Republic Jamaica Grenada in Mexico in Costa Rica najin Tina in Nigeria and South African in India to implement the model we're also working closely with MGM another group who has been implementing the model in Colombia we know the company carrier base in Singapore is implementing the model in Singapore Malaysia India next if we're giving the oh this is a case study and I wanted to quickly show one model that has actually one building that has been receiving cooling as a service it was implemented by MGM in a back room it is a commercial building which has a highly efficient 580 tunnel Federation chiller installed and basically the actual amount of cool is that it's delivered to each user so to each office is measured the investment was fully carried on by MGM and the the monthly payments are so there's the two components one is the fixed component which the actual building operator is paying for the common spaces and there is a variety which each user is pain so this is the way it's structured and both clients and final user so there's savings achieved here which are u 1.2 gigawatt hour per year and a reduction of I think it was 440 maybe vida if you can just close that one 440 ton of co2 per year so this is a case study and there are also some existing cases in in Asia for instance in Singapore next so before giving the floor back to video and then to Peter and Jim I'd like to encourage you to get involved you can join the cooling as a source Alliance to roll out the model or to spread the word and build capacity about the opportunities and benefits of cooling as a service on the website casts - initiative or geek and which we will share later you can find more information about the mechanics of the model as well as a video explaining the model that you can share and now of course invite you as well to register to our newsletter to stay updated about the progress we have been doing a lot over the past year and the next year is going to be very exciting as well for this initiative mixed and thank you very much and you have my contact details here and I give the four back to p.m. thank you very much Thomas for this comprehensive overview and and showing how how this solution can can really overcome some of the the very persistent barriers that have been blocking investments in energy efficiency for decades and as I'm very pleased that we now have the opportunity also to hear from colleagues from the investment community to provide their their viewpoints and their experiences of working with with cooling as a service so with that I'll hand over to to Peter you because we can't hear you can you unmute yourself [Applause] to the audience please there without sweet we'll try to sort out that a slight technical glitch yeah online shortly hello can you hear me yes Peter oh great good not sure what happened there good morning everybody I'm very sorry for that that's eating up another couple of minutes of our time so I'll be very brief I'll quickly introduce Heston Cl and then talk a little bit about the commercial approach of cooling as a service that we're planning to implement and then Jim will talk a little bit more about the K set program that were involved with in Asia and Africa so if we burn to the first slide please leader so SQL is a specialist manager of investments into sustainable energy projects we send based out of London and we operate a number of funds and instruments around the world so in the UK where the manager of a listed company can see it which went onto the market in 2018 as a 100 million pound IPO and is now a 400 million can't come this has grown very quickly and is we think they only listed company that we know of that invests exclusively into and operates its elusively energy efficiency projects around the world we also have a fund in Ireland one out of Dublin that's co-financed by the government of Ireland and along with them a range of commercial investors out in New York with the Green Bank we run a similar energy efficiency fund and in Singapore working with the Singapore government we run a smaller fund that invests into energy efficiency projects in Singapore and all of those are based around the basic model of investing into demand-side or decentralized energy projects in order to reduce the requirement for the host to to the their house energy requirements from off grid from from from grid supplies either through production of their own decentralized sustainable energy things like cogeneration or rooftop solar PV or demand side measures in energy efficiency building management systems efficient lighting and so on and so forth next slide please feeder so very quickly looking at the basic commercial model this is in a way simpler form of one of the examples that Thomas explained and just to preface all of this the the basic commercial model here is energy efficiency as a service which is something that's been around for a long time in which ste CL is the leading specialist then we've implemented energy efficiencies the service projects around the world for many many years and this is the basic model it's very very straightforward and many of you will have seen something similar before we sit at the top of all of that as the manager of the funds and for each project we'll set up a special purpose vehicle in the domicile of the host and that that's the project vehicle that that runs have everything and so the host company will enter into an energy or a cooling services agreement with the SPV so there's a single point of contact for the house which is with the SPV and then the fund capitalizes the SPV with whatever is the appropriate capital structure a mixture of equity and debt and the SPV dividends back that investment their way of returns to the fund and then the SPV goes about the job of implant implementing the project by contracting an ESCO to fulfill the actual project construction and operation so we'll enter into an engineering performance contract so an engine performance contract with the ESCO and usually an O&M agree and providing for the operation and maintenance of the assets for the license the of the project which can be 10 15 or even 20 years and and then the ESCO has the advantage of a single contract point through itself as well and it doesn't have to find the funds as as we take care of all of that and the cooling is a service model is works in exactly the same way in that way as an as the energy efficiency as a service model so it's very natural area to move into for a company that's used to doing energy efficiency as a service next slide please and this slide looks at the kind of process that's involved with that and again many of you will be familiar with the kind of flow from feasibility through to build an O&M as part of a natural project finance cycle but the key point is that the fund through the SPV is a single point of responsibility taking care of all of that from start to finish with correspondingly taking all of the risks associated with that and the the key element that we're bringing to this as part of the kigali program what Jim will talk about is dealing with the first part of that start with the feasibility in the design and engineering and in our partnership with the with the K set program that's enabling us to cover that initial feasibility stage through investment grade audits for the funded by K SAP where we're working with selected SK partners to undertake the IGS and the initial design work then leading to B now to put a commercial energy services agreement or cooling it's a service agreement proposal in front of the of the client and they're moving to the right of of that we're going to the to the purely commercial phase if you like of the project working with a contracted ESCO to deal with the project management in construction and then the operation of maintenance through the life of the project and the you know the advantages of that approach are that we can bring everything down to a single point of contact through a party that's dealing with a lot of these projects around the world so we have the ability to bring in best-in-class delivery partners through efficient and and well we have as procurement processes which ensure that we get the best quality technical delivery and the most competitive terms and this is an area that for many hosts is a challenge that have different experience in procurement and very often are focused on delivering the lowest cost solution not necessarily the most effective in terms of energy efficiency or cooling efficiency particularly when we start to take into account matters like global warming potential of refrigerants and so and so forth so the way that procurement works around this model is crucial to ensuring that we can deliver on the objectives not just of cost saving but also the environmental benefits of no global warming refrigerants and reducing energy consumption over the life of the project beador I think we've got your pop up again with with the to-do list if you can just close that and also move on to the the next slide please thank you and as an investor or an investment manager this is really all about risks and understanding the risks I'm seeing who the appropriate party is to manage them and then mitigating them and this just sets out what those essential risks are and how how we approach that this the solution is that the the the SPV with the fund above it is responsible for taking on and managing all of these crucial risks so first of all the host credit risk well first of all the as an investment manager it's our job to understand what that basic credit quality is and make a decision in the first place about whether their host meets the the right credit performance levels that we need but we can also look at where it's a mitigating that with things like parent company guarantees or potentially risk participation guarantees where those are available that's a more complicated approach but we also look at how we can make smaller projects efficient by being able to replicate the commercial structure with under one parent company again with the parent company guarantee you know wearing probably wouldn't be so attractive more sensible to do that on a standalone basis with a single smaller project so there's a lot of consolidation and corporate structuring going on behind that host credit risk that we're very experienced in managing and then the next big area is the performance of the project because the essential characteristic of a cooling is a service agreement or an NG service agreement is that the SPV takes that delivery risk so if the if the cooling or the energy efficiency service is not delivered then the SPV doesn't get paid or get some reduced payment so how that is managed is through the contract structure with the underlying ESCO and the OEM delivery partners that the providing the underlying technology and what we would look to do is have a sort of back-to-back flow-through of those risk scrutiny PC and the OEM partner so to the extent that the PV has not been paid because of Anand delivery of the define performance parameter then we would be able to claim that back from the from the ESCO that's responsible for delivery in that performance or through the warranties with the OEM technology provider that's a straightforward concept is it's it's it's very important to look at how that works in practice because often exposure and liability of VPC you know an EM contract as a capped understand and so the commercial principles and it's it's only really important requirement of what we do to make sure that that matching performance risk is is nailed down in in the contracts and and that's something that we've got a lot of experience with and then the next category is technology risk and the really the trick here is did not do anything risky bluntly and we always rely on using commercially proven technologies with strong track record and with equipment warranties that we can backup insurance policies so really the technology risk is one that can be covered off by simply not taking unnecessary levels of technology risk and and that works very effectively because these technologies are well clothed and they work and it's and they're reliable and then finally operating and maintenance whiskey's absolutely crucial in particularly the cooling space because as many of you will know one of the crucial issues that's causing so many problems is that these types of assets are often left in place many years not run properly and operate some optimally so that they're far less efficient than that than they're supposed to be and need a lot more maintenance than they're supposed to need and that's often because in-house teams just don't attention to this and and treated as a as something that fix that needs to be fixed when it goes wrong but don't do enough preventative maintenance so if as the body is the entity that's liable for the lifelong operation of the asset according to contracted performance kpi's it's clearly necessary for us to cover that through a very well-structured operating and maintenance agreement with the appropriate counterparty that's obliged to deliver that performance year on year according to this to the KPIs of the set in the contract and that's achieved through effective preventative maintenance and an appropriate monitoring in these days mostly remotely which can predict or anticipate problems in effect before they happen and that that's really one of the crucial parts of the cooling as a service concept and that that operation and maintenance risk is carried by the SPV and the related O&M counterparty for the life of the project and is and that in each year of each day of the contract is something that is maintained and and creative attention is paid to that on an ongoing basis next slide please and then finally just to wrap up on this section a summary of the of the value proposition for that for the host and I think many of you on the scene they can't the diagram on the left or diagrams like that where the idea is that the annual service charge that the host pays is in some to some level fixed and is less than what they would otherwise be paying if they did nothing that's essentially the principle is applied here almost important to emphasize that the level of savings that typically achieved in a cooling project may not be so high that they fully fund the investment the crucial thing is what would the host alternative be if it had to replace all of the chillers on its own and and incur the cost for that so that differential between what they have to pay the ESCO through the service agreement and what they have to pay is not just against doing nothing because that often isn't going to be an option it's against what the alternative approach would be if they did that without the S coats and there's one important feature which I apologize I forgot to mention which is that the service charge can be structured so that it would be classified as an off-balance sheet investment by the House auditors and so it's it's treated purely isn't no an M payment and it doesn't incur any liabilities on the hosts balance sheet so in many cases the alternative is having to self fund the investment which might be a slightly lower cost of capital but it results in balance sheet liabilities for that funding but also and this is what's illustrated in the middle section in that situation that house would carry all of the construction commissioning and operational risks associated with the project whereas under the the ESCO model that that that we do at SDC el all of those risks are carried by SDC el and the client in effect has none I mean it only pays for the service that it receives and then just to summarize on the right and the other key point is that this is a single point of responsibility so the host only sees one contracting partner that's SDC how that takes responsibility for all of the project development and implementation operation through the investment grade audit right through to construction and then going into the operating phase where the service fees start being paid and we take responsibility for all of the OEM contracts on leith all of that the EPC contracts and managing all the various warranties that they're coming from the different technology suppliers so that's a brief summary of the what esten CL does the commercial approach and the value proposition for his clients and Jim's now going to explain a little bit about the partnership that we have with the Kigali cooling efficiency program and how that's being developed by us to to help fund cooling projects in in in Asia and Africa so it's huge in thank you Peter and good morning everybody if we could just quickly go to the next slide Peter what I'd like to frame for everybody is gonna be slightly different than what Thomas is outlined in terms of the cooling as a service model and Peter specific comments to sort of the finance and financial issues which which underpin the cooling as a service and and quickly give everybody an overview of what we're doing within this context of the cooling as a service model specific to the cooling the Kigali cooling efficiency program and I won't spend a lot of time on this because we want to save enough time for Question and Answer the the the Kigali cooling efficiency program has its antecedent r ally in the Montreal Protocol many of you will know it considered one of the most successful international agreements ever the kigali amendment to the Montreal Protocol is looking at the phase down of HFC or hydro fluorocarbons there was the production and the consumption and when we look at hf C's we're looking at this issue and Peter alluded to it of refrigerants and gases that are largely found in refrigeration air conditioning and then heat pump equipment which are thousands of times more harmful to the climate than co2 and could account for up to twenty percent of climate pollution by 2050 so when we look to and it's important to think about it when we look to this issue of global warming potential within what our activities are right now under the Kigali cooling efficiency program it is in fact a cornerstone of what we're trying to achieve within our grant and again I'll come back to that so the Kigali cooling efficiency program essentially it's a philanthropic initiative it represents donor capital being used in in in in in as catalytic capital to unleash private and public sector money our grant specifically is looking at Asia and Africa and for the purposes of today I'll speak really to our experience and our findings so far in Asia and I do want to just reference where we're looking as that last bullet point highlights its we're looking at the industrial and commercial operations of global companies or regional companies with operations in emerging markets and that gets to one of Peters first points there in that counterparty credit risk and that is important and that's something which right now we are we are facing in a couple of key countries in terms of our activities to date under Kigali to implement cooling as a service next slide please Vita I think this slide which some of you may or may not have seen is a fundamentally important slide to to what we are trying to do within the Kigali cooling efficiency program and the data is originally from IEA worked out by AE Abe some of you may be aware of a report that came out in December 2019 published by The Economist - Intelligence Unit in case up referred to as the the cooling imperative and you'll see from this slide simply the the the you know the seriousness of the cooling problem base made reference to 30% of electricity and cooling in Thomas referred to it rather in the early slide when you look at the the countries that are identified here for for SDC L our activity under the Kigali cooling efficiency program Indonesia China and India are three of our key countries that we're looking at in particularly Indonesia and when you look at this phenomenon of cooling degree days and the impact in 70 odd years 50 70 years of a warming climate and we overlay this this phenomena of urbanization and what we're really faced with is a perfect storm in terms of the the the use of refrigerants and refrigeration and air conditioning to to really to combat a world which is getting hotter and needs more cooling so on the next slide buta if you wouldn't mind this these comments in this warming the cooling imperative a warming climate or warming globe it really brings us through what are what we're seeing right now from specific to asia as an opportunity the asia cooling and energy efficiency fund and and sort of the the what we see a sort of some unique proposition to market opportunities is that we want to bring a new investment vehicle which is going to be focused on cooling an energy efficiency as well as distributed generation to be fair and with in asia we st CL as peter mentioned we we are a leading energy efficiency investment manager with public private partners or government backed institutional funds managed around the world so we have the experience and we believe that we can bring that experience to develop projects in the commercial sector in the industrial sector in terms of hospitality and healthcare data centers etc where we can act on the ground in Asia really at the intersection of the energy markets and the built environment and within this backdrop of a warming planet climate and a warming globe and the need to you need to address more efficient coal at cooling a key piece of the puzzle in in addressing this problem is going to be the mobilization of capital our initial portfolio right now the activities that we've the investment grade audits the Peter referred to that we funded have been in the hospitality sector the manufacturing sector and the real estate sector okay and we have as as of today we have approximately 23 projects that are at the IGA stage so they are in process of feasibility studies where we have completed and you're now moving towards financing stage and that is across five countries right now and various counterparties everything from multinational corporations to individual asset owners in an emerging market so for us the the the 23 projects represent really just the tip of the sphere of what we believe this opportunity to be and in fact our opportunity pipeline today we are looking at about 850 individual projects across 90 counterparties or 90 hosts and we think that that we think that that opportunity pipeline and that only reflects right now as I said about five countries but we think that that opportunity pipeline with the sort of execution on a few of our distribution strategies we think that that can grow significantly in the very near term again as Peters mentioned and I won't overemphasize it but we believe with the experience that we've garnered globally that we can bring into Asia the ability to deploy capital at a fun level into specific projects into countries very very competitively and the the pipeline that we're putting together I've listed there just a few of the key countries that were focused on right now Hong Kong Singapore Malaysia Indonesia Thailand but also development activity in the Philippines China as well as the Greater Mekong sub-region region and if I can ask you please to go to the next slide so the the the grant and Peter referred to it is really the is looking at this issue of investment great audits and deploying capital the donor capital to take that discussion off and in other words a phrase that you often hear is that you don't have to we don't have to engage in a host with regard to a capital allocation or a capex it is we're taking that discussion off of the table and what we're doing is we're delivering that through this as Peter's outlined and I won't repeat through that fully finance package where there's a single point of accessing a point of responsibility and the assumption of the various risks which are intrinsic to an energy efficiency or cooley an energy efficiency retrofit project are addressed and I think that it's important that we sort of just step back to for a second when we look at what we're doing in these countries it is really very very important that we work closely with ESCOs who are our professional experienced have regional but and possibly global platforms that that are are capable of supporting what we're trying to achieve in a given country in terms of cooling and energy efficiency opportunities but I'd also then like to say what's important about what we're doing and in terms of the Kigali cooling efficiency program and what I've termed the halo is that we're partnering with other case if grantees as well as global NGOs to develop these new cooling and energy efficiency opportunities whether it's obviously in this case now with base but entities such as the international tourism partnership with the the climate group or LBNL out of the United States where climate works these are global platforms and/or think tanks or or entities which operate in this cooling and energy efficiency space and it behooves us as stco as a private investor to partner with them and then I'd just add here the four sectors that were really focused on property real estate manufacturing health care and then sort of retail hospitality data centers etc and then I'd like to move quickly just to the last slide what we've tried to do here and in the interest of time is just summarize sort of some preliminary conclusions and what we're what we can sort of take away right now as we're 13 14 months into this journey one cooling in energy efficiency and Thomas alluded to this if not I commented on it it's it's probably the most cost effective way of reducing the greenhouse gas emissions all right improving energy infrastructure and I think what we what's important is that we're trying to improve the performance of these assets from a financial environmental and from an infrastructure perspective so the resilience of these assets I think what's also important to make is that there the statement there is a gap but there's also an opportunity in terms of funding so I do believe that and we as s DCL believe it's possible to allocate capital equity and debt to address the cooling and energy efficiency challenge another issue though that I think it's important to highlight we the EIU came out the Economist Intelligence Unit came out and they report talked about a hundred and thirty five billion dollar opportunity Thomas had larger numbers in Asia but elsewhere we still see an issue where solar is more sexy it's more it's more commonly understood it has more resonance whether that's with regard to Apple or simply putting rooftop on your solar you know rooftop solar on an asset it's tangible and it's seen when we talk about energy-efficient e cooling and energy efficiency we're talking about the guts of the basic and plant and equipment on a building and that's something which within Asia we are are trying to change we are trying to to make it better understood to asset owners that this is in fact a very fundamental way of reducing greenhouse gas emissions and improving their their financial performance a couple of other points that we'd we'd emphasize the development cycle right now in Asia with regard to closing of deals it's just taking too long and I think that part of that is related to the following one is just simply disconnects between the various silos within a business whether that's the engineering side versus finance versus sustainability the other is the cost of capital right a risk and reward issue and then what's important is that frankly in energy equivalent energy efficiency it's the investment numbers are typically relatively low it's this is not a large power station so then we come to our sort of our our final points that I'd like to make when we talk about this issue of refrigeration in gases absolutely fundamental and what we're trying to do in under the kigali Cooley efficiency program is improve that what we are seeing is the need for the manufacturers the global OMS who are producing these large chillers and and in a cooling equipment we need to see them attentive to the objectives and aspirations of ourselves as investors and as whole of the host to have more efficient technology our distribution strategies have been around the supply chain banks insurance companies and hospitality and we're seeing a significant amount of uptick with probably the least amount of attention to date coming from the insurance sector another conclusion we're seeing is the nexus between cooling and energy efficiency and indoor air quality and in certain countries such as Hong Kong and Philippines we believe that that'll be a fundamental part of our value proposition and then in conclusion the the kigali halo has been an absolute game pager changer for us in the region in terms of raising awareness about this cooling imperative and then last but not least we see that the cooling and energy efficiency amidst this pandemic situation it is hopefully counter cyclical and it hopefully we can bring capital to address sort of the basic issues in and around performance of assets we as an asset as an investor as an equity investor we believe that we we can move and partner with companies asset owners in the region to achieve a much a much more efficient asset at the end of the day and Vita I'll stop there in the interest of time and open it up hopefully for some some question and answer thank you so much Thomas and then Peter and Jim for these comprehensive presentations and an in-depth insights into the mechanics of cooling in service and and the opportunities where we're running a bit short on time so we'll have time for a couple of questions but Thomas is currently offered to also respond to the questions in writing so we'll be sending your confirmation later on one of the questions that we've gotten is about the presentation and the recording yes these will be available online and I will be sending you an email with a link that you can access so it's a time for a couple of questions as I said that Thomas and then colleagues so could you comment on why electricity prices included and how price fluctuations are managed yeah the thank you may be all oh I'll take that or I start with it the Christie press is included in the cooling as a service service to the client because this way the client is not exposed to the performance risk anymore if the technology provider is the one who is bearing the cost of the operation fully including electricity and there's a strong incentive for the technology provided to actually install the most efficient system because he'll be the one paying for these costs and also to offer maintenance preventative maintenance in such a way that the efficiencies always kept as the highest possible to minimize the cost to deliver this service to the client with regard to the fluctuation the price charged per ton of refrigeration should be indexed to electricity price so the fluctuation is not a risk that the technology provider or the SPV should be taking so the price is basically indexed to electricity prices maybe if I could just add a clarification on to that onto that I think Thomas has described it well that's only you can vary that approach little bit and actually normally we would seek to not carry the electricity supply and price risk commercially in one sense it doesn't make any difference because as long as it's appropriately indexed in the service charge then any variations in electricity price will flow through but you don't have to have the ESCO be the electricity via the host can continue to take the electricity supply and pay for it so long as the performance KPI is a set and the service agreement to ensure that the cooling assets or the energy generation assets of the case may be operate to the agreed energy efficiency performance levels that then you know the the the net result is the same as the service agreement provides for the efficiency to be to be achieved them with penalty payments if it isn't so you don't have to be paying for the electricity you can but it works both ways thank you and question around the sectors in which cooling as a service could could be possible with the commercial sector was mentioned but what about them supermarkets if the retail sector and the agricultural sector with with cold chain would would there be potentials also in these sectors real quickly comment on that so we launched an incubator early this year to support different companies in different to implement cooling as a service and a couple of the companies we work with are working with industrial refrigeration like supermarkets or with cold chain for instance for agriculture like cold rooms or critical grooms store food to enable farmers to access high-value markets and also education the cities universities so there are many different sectors that could be applicable and maybe Jim and Peter also want to comment on this yeah no absolutely from an Asia perspective as per the comments about a warming planet cold chain is a fundamental part of the the process and it's it's certainly our it's our it's our primary strategy with regard to Africa I'd add it's important and fundamentally important in fact not only for the agricultural sector so trying to get into that first mile but it's also important in terms of pharmaceutical and medicine distribution and so we are working right now in discussions with Asia's largest pharmaceutical distributor active across Indonesia and Vietnam and Philippines and other countries in the region ho need to have certain within the different categories of temperature requirements but need to have a at certain points for special medicine certainly the resilient and the appropriate cooling capability so that cold storage just Thomas is just referred to as absolutely very important great thanks so much so our ally wide applicability and an increasing scope and increasing experiences along a range of different sectors another question concluding is a service be combined with their energy efficiency improvements so other energy efficiency improvements energy efficiency in buildings and renovation works are there opportunities to combine now cooling as a service with other types of activities I'll come in on that one with a very very simple answer yes absolutely I mean that that's one of the great advantages in that approach works really well within the cooling as a service and energy efficiency service concept you know the contractors are there all of the credit works done all of the contract works been done and it makes absolute sense to look at all of these opportunities at the same time so so not just yes it can be but that's one of the one of the approaches that really works well right thank you and in terms of risk so we got a really good overview of how risks are managed but when it comes to assessment of technology risk how can new technologies break into this space and and what's required for the strong track record that was mentioned you know can I just into this one reader you know one of the key issues were seeing or for for that to answer that question bluntly is to see what kind of insurance programs the particular technology provider has and and in fact it's really becoming a bit the role of insurance in terms as a backstop to these performance guarantees that a new startup technology provider might provide is really one way to prequalify that technology provider I think that's going to be increasingly a part and parcel as new and emerging technologies come to the fore whether that's chiller optimization analytics etc there there's going to be an important role for the insurance industry to play in the development of that news or what all term clean tech technology and maybe if I make a compliment I totally agree with Jim and I also like to add here that cooling is a service really since the customer is purchasing the cooling service it doesn't really matter how the provider is delivering that service which means there's a lot of space for innovation for the provider for instance it might be but there's a big difference between electricity prices during the day during the night that it makes sense to install cold storage that there's a lot of different things that could be added that would enable the provider to reduce its cost to deliver the service and the provider has the freedom to basically use innovation and very often technology providers are the ones that best understand the impact of innovation rather than their customers or than the cooling users so it gives space to exploit this so final question so we heard about cooling as a service what are the possibilities of looking at other other services such as lighting for a service heating for as a service in the industrial context compressed air as a service would it be fundamentally different from the approach that we heard about today or are there almost unlimited possibilities to start offering everything as a service I'll just drive-in on that one I think and say yes I mean I think is little bit some of this the other question and that all of those different technologies can be wrapped up things to serve this approach and just I mean to emphasize one thing about it what what commercially we as SD CL or the RSPB would offer is availability so that's the essential service that's been provided is what that technology's been made available to provide heating cooling wherever the lighting and and all of those utilities if you like can be wrapped up into a service based approach so yes from a technology perspective yes from a commercial service based approach yes all of those things can be done at the same time it's very efficient to do it that way so that's what we always like to try and do thank you very much a little bit so I'd like to finalize the webinar on this positive note that yes a lot of things can be offered their services and as we heard today increasing number of projects are are underway new approaches are underway and the results are very promising we got a lot of questions and as I mentioned we will try to address some of these embraced at a later stage the webinar will be record is recorded and will be available online and the presentation will be available and I think that the interest from our participants today showed that this is a topic that we will need to revisit as as progress continues in in the area of cooling as a service and as some of the interesting projects and initiatives that we heard about today start to bear fruit and have some lessons learned that we can all draw from with that I'd like to end this webinar and wish you a good continuation and say thank you very much thank you everybody thank you next thank you