Transcript Slide 1

Global Climate Change Alliance:
Intra-ACP Programme
Training Module
Climate Change Finance
Module 3 – Multilateral and bilateral climate funds
Ms Isabelle Mamaty
Senior Expert
Climate Support Facility
An initiative of the ACP Group of States funded by the European Union
Module Structure
 Multilateral funds
o Climate Investment Fund (CIF)
o Clean Technology Fund (CTF)
o Global Energy Efficiency and Renewable Energy
Fund (GEEREF)
o Status of African Green Fund (AfGHF)
 bilateral funds
o International Climate Initiative (ICI) – Germany
o International Climate Fund (ICF) - United Kingdom
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Multilateral Funds
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Clean Technology Fund (CTF)
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Clean Technology Fund
 One of the four funding windows within the Climate
Investment fund (CIF) framework: multidonor fund
 Administered by World Band and implemented by
Multilateral Development Banks (MDB)
 CIF structure
o Clean Technology Fund
o Strategic Climate Fund :
 Forest Investments program
 Pilot Program for climate Resilience
 Scaling Up Renewable Energy program
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Clean Technology Fund
 Created in February 2008 and operational in
July 2008*
 Multi-donor Trust fund
 Administered by the World Bank
 No direct access: funds channelled through
MDBs: e.g African Development Bank, Asian
Development Bank, European Bank for
Reconstruction and Development, InterAmerican Development Bank, and World Bank
Group
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CTF Supported
Activities
 Power sector: Renewable energy and highly efficient
technologies to reduce carbon intensity
 Transport sector: efficiency and modal shifts
 Energy efficiency : buildings, industry and agriculture
At different levels
 Sectoral or sub-sectoral levels in a given country
 Sub-national levels (provinces/states/municipalities)
 Regional levels
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Eligibility for CTF
 Country access criteria
o ODA-eligibility (according to OECD/DAC
guidelines); and
o Existence of active multilateral development bank
(MDB) country program
 Project eligibility and level of financing are
assessed on potential « transformative » effects
and project viability in absence of concessional
finance
 Limit project amount: $50 millions
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How to access the CFT (1)
Public Sector
MDBs jointly assess interested eligible countries’ investment
potential to meet CTF investment criteria (above)
 Where there is a potential fit, MDBs conduct a joint mission with
other relevant development partners involving all stakeholders to
see how CTF may help finance scaled-up low carbon activities;
Under the leadership of the recipient country, an investment plan
(essentially MDBs “business plan”) is produced; and
CTF Trust Fund Committee reviews the investment plan with a
view to endorsing a resource envelope for programs/projects and
authorizing designated MDBs to proceed with development and
preparation of individual investment operations for CTF cofinancing
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How to access the CFT (2)
 Private Sector
o Private sector proposals are submitted in the form of
either
• individual large-scale projects (“Projects”); or
• program envelopes which aggregate several small and medium
sized projects each utilizing less than US$50 million of CTF funds
and all having a shared focus and objective (“Programs”).
o Proposals explain how the Projects and Programs are
expected to contribute towards the objective of achieving
transformational outcomes in a sector, sub-sector,
country, sub-national region, sub-region, or region while
demonstrating that these outcomes would not be
possible without support from the CTF
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Preparation of
investment plans
Access Requirements
Investment plans should:
- highlight how it is embedded into national development plans
- include low carbon objectives
- set out a pipeline of projects
Investment plan Criteria:
Public
- Potential GHG Emissions savings
- Cost effectiveness
- Demonstrations potential at scale
- Implementation potential
- Additional costs and risk premium
Private
- Financial stability
- Effective use of concessional finance
- Mitigation and market distortions
- Risks
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Global Energy Efficiency and
Renewable Energy Fund
(GEEREF)
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GEEREF Overview
Created in 2006 and operational in 2008
The Fund is administered by the European Investment Bank (EIB)
Funding objectives:
“Obtain benefits from accelerated deployment of energy efficiency
and renewable energy technologies. And achieve high leverage of
public finance by offering preferential returns to private funds.”
Funding available:
Pledged: $ 170 million
Deposited: $ 66 million
Approved: $ 77 million
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GEEREF Activities
Supported
GEEREF does not directly provide funding but three forms of assistance:
Technical Assistance
• Grants
• The aim of the facility is to
improve and facilitate the
development of investible
projects.
Co-financing
• Possible on a case-by-case
basis. Up to 30% of GEEREF’s
total commitments by
investors.
Investment
• “Fund of funds”
• Structured for both public
and private investors
• Invests in private equity
firms,
• The technical assistance
grant can go up to EUR 1
million
• Up to to €10 million equity
investment
• projects must focus on
renewable energy and
energy efficiency
production and/or
technologies
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GEEREF Areas of
intervention
Broad mix of projects promoting energy efficiency
and renewable energy technologies:
 Small hydro, biomass, and on-shore wind Cofiring solutions
 Manufacturing, energy service, trading and
micro finance venture
 Photovoltaic.
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GEEREF Eligibility
 Focus on project funding in countries that have
private sector engagement in their national
policies.
 Priority to small projects (less than EUR 10
million) as they are often neglected.
 Recipient countries must be eligible for Official
Development Assistance.
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GEEREF Funding
Accessibility
Development of
a new clean
energy
investment fund
Project
developers
Financial
institutions
Fund
management
companies
Expansion of
existing fund
Who can
apply?
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Developers of
clean energy
projects
GEEREF Funding
Procedures
Access Requirements and Procedural Issues
Proposals should:
 Present a financially sustainable business plan generating a fair return for
investors and a realistic pipeline.
 Specify environmental and socio-economic impacts.
 Focus on small and medium sized clean energy projects (< 30MW) and
companies.
 Require long-term patient investment capital.
 Locally grounded, professional fund management team, preferable with a
track record in the clean, energy sector, or at least the capacity to become
qualified or to liaise with other parties for that purpose.
No specific application window. Eligible applicants submit proposals to the
GEEREF management team
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African Green Fund (AfGF)
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What is the African Green
Fund (AfGF) ?
 Creation launched in 2009
 Interventions: Balance allocation between adaptation and
mitigation: transfer and deployment of low carbon
technologies (long-term GHG savings) + climate - proofing of
the continent’s investments
 Eligibility: The Bank’s Regional Member Countries, public
and private enterprises, NGOs, civil society, bilateral and
multi-lateral organizations (including other MDBs), African
regional organizations
 Funding: Grants, concessional loans and guarantees to
support public & private sector investments and build
capacity
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AfGF objectives of
the Fund
African Fund is part of the AfGF platform aims at addressing
the gaps in climate financing in Africa
Objectives: support country-owned and country-led climate compatible
development in Africa by financing public and private sector programs
including:
•Mobilise and facilitate access for its regional Member countries to
existing and external resources though ClimDev, CBF, AWF and SEFA,
and co-financing public and private programs ( in complement to CIFs,
GEF and Adaptation Fund)
•Promote direct and immediate access to fast –start funds for climate
mitigation and adaptation
•Support the development of climate resilient and low carbon programs
and projects
•Strengthen national institutions to enable them to build capacity for
direct access to the Fund
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Supported activities
 Adaptation
o Sustainable land and water resource management
o Building climate resilience in key economic sectors
o Supporting disaster management activities
 Mitigation
o Renewable energy and energy efficiency
o Sustainable transport
o Sustainable land and forestry management
 Cross-cutting activities: capacity building and
technology transfer
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Eligibility to AfGF
Eligibility criteria:
 development impact (climate-compatible
development, achievement of the MDGs
 Potential for cost-effective climate-resilient and
adaptation investments
 Potential for cost-effective GHG Emissions savings
 Potential to scale up climate-resilient and lowcarbon technologies
 Implementation potential
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AfGFF funding
procedures
 Step 1: preparation of a concept note (request for funding)
for approval
 Step 2: development , preparation and approval of
individual programs/projects by the implementing entity
using its internal processes
 Step 3: re-submission of a final project document to the
Governing Council
 Threshold for project size: to be provided
 Accreditation process: to be provided
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AFGF: way forward
 Consultation with key stakeholders including the African
Negotiators; Africa Group’s Representatives to the
Transitional Committee designing the Green Climate Fund;
AfDB Board members through a Seminar to seek views and
comments; Donors and potential contributors to the Fund;
the African Council of Ministers of Environment; and the
Civil Society and Private Sector;
 Submission to the AfDB Board of Directors for consideration
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Bilateral Funds
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International Climate Initiative (ICI) - Germany
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International Climate Initiative Overview
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Created in 2007 and made operational in 2008
The Fund is administered by the BMU of the Government of Germany
First period 2008-2011, extended beyond 2011
Provides support to climate change mitigation, adaptation and
biodiversity projects with climate relevance to help trigger private
investments of a greater magnitude :
o Support countries establishing economic structures that reduce GES
emissions;
o Support adaptation in countries that are especially vulnerable to
climate change; and
o Support measures for preservation and sustainable use of carbon
reservoirs/Reducing Emissions from Deforestation and Degradation
(REDD)
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ICI Requirements
 Eligible regions: Asia-Pacific, Africa, South and Central America, Small
Island Developing States, Least Developed Countries
 Priority to countries meeting ICI following criteria:
o Climate-friendly economy
 small and medium-sized newly industrialising countries with a high
greenhouse gas reduction potential
 consulting and capacity-building projects are preferred for the largest
newly industrialising countries
o Adaptation: countries/regions that are particularly vulnerable to
climate change
o Carbon sinks/REDD+: countries and regions that are particularly
relevant/suitable to carbon storage and biodiversity;
o Biodiversity: countries and regions particularly rich in biodiversity
and/or an important role in the international CBD processes
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ICI selection criteria
 Projects should be innovative (technologically,
economically, methodologically, Institutionally) and
integrated into national strategies
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Duplicability of results, prominence and multiplier effect;
Transferability of projects to the level of international climate
cooperation;
Significance of the partner country in cooperating with Germany, or
in the context of international negotiations;
Solidity and quality of concept, presentation, expected project
management and monitoring; and
Availability of self-financing, third party financing, and financial
leverage effect.
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ICI: Procedural Issues
The application window occurs once a year. It is a two
stage process:
Step 1: project outline submission to the Programme
Office.
Step 2: If approved, then applicant will receive forms to
enter a formal grant application with a detailed project plan
and a financing strategy.
Step 3: final review and decisions by the Ministry for
Environment, Nature Conservation and Nuclear Safety
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ICI in practice (1) :
Projects by theme
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ICI in practice (2):
Projects by region
International Climate Fund
(ICF) - United Kingdom
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ICF Overview
 Created in 2010 and operational in 2011 in replacement
to the Environmental Transformation Fund (ETF)
 Aims to support low carbon growth and adaptation in
developing countries.
 Projects: adaptation to climate change (50%), low
carbon development (30%) and forestry (20%)
 Period: 2011/12- 2014/15
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ICF Supported
activities
 Building global knowledge and evidence;
 Developing and scaling-up low-carbon and climate resilient
programs;
 Building capacity in the public and private sectors and
supporting country level action;
 Mainstreaming climate change into UK development aid.
 Catalysing private investment and climate finance flows to
developing countries through Climate Public Private
Partnership (CP3) and the Capital Markets climate Initiative
(CMCI)*
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ICF project criteria
Funds channelled through global multilaterally administered
programs based on the following principles :
 Consistency with the DAC definition of ODA;
 Consistency with UK agreements on aid effectiveness
(under the Paris Declaration);
 Open and transparent project performance;
 Choice of instrument; and
 Appropriate enabling environment.
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Procedures for ICF
funding
 Officials across Government are invited to develop project ideas
consistent with the ICF implementation Plan with country government.
These include officials both based in developing countries (usually
FCO and DFID) and in the UK (DECC, DFID & DEFRA).
 Development of project ideas into concept notes if accepted by ICF
Secretariat
 Decisions on development of the concept notes into business cases,
are taken by the ICF Board and delegated approval boards.
 no route through which an organisation outside of UK Government can
independently develop a project to be considered by the ICF Board. All
projects must have a UK Government sponsor
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Turning words into action
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Discussion
 Questions and answers
 Discussion and sharing of experiences in using
these funds and difficulties encountered
Have you ever developed a project in
your sector or at your level eligible to
these funds? what are the institutional
and capacity needs in your organisation
to do so?
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Where to get the
information?
Getting information : visit of different websites
Multilateral funds
o Climate Investment fund :
https://climateinvestmentfunds.org/cif/
o Clean Technology Fund (CTF):
https://climateinvestmentfunds.org/cif/
o GEEREF Website :http://www.geeref.com/pages/home
Bilateral funds
o International Climate Initiative (ICI) website:http://www.bmuklimaschutzinitiative.de/en/about_the_ici
o International Climate Fund (ICF)
websitehttp://www.decc.gov.uk/en/content/cms/tackling/intern
ational/icf/icf.aspx
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• Thank you
• Contact: Dr. Pendo MARO, ACP Secretariat
[email protected] or +32 495 281 494
www.gcca.eu/intra-acp