Transcript Innovative Financing Options for Climate Change-related

Innovative Financing Options for
Climate Change-related
Transfer and Development of Technologies
Paul van Aalst
September 27, 2004
EGTT – Montreal
[email protected]
EGTT - Montreal - 23
September 2004
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Guten Morgen !
NO !
E = mc2
YES !!
“Neue Kombinationen”
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Program
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Introduction
Secrets of Innovative Financing
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Key Words
Linkages
“Loud – Long – Legal”
Barriers and how to deal with them
Examples and what YOU can do
Cases and how these apply
Tools to take away
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Key Words for “Access”
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Access to financing depends on:
Added value for stakeholders
 Transparent, Accountable, Credible
 Sustainability: not just the environment
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 Nothing
New; No Secrets
 No rocket science
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CC - Financing Characteristics
Scale
Term
Focus &
revenuebasis
Parties
involved
Adaptation
Mitigation
Very large (as of USD 5 million but often
over USD 50 million)
> 20 yrs
•
Costs, including R&D and capacity
building and other expenses that
may not lead directly to investment
projects
•
Investments with no or little direct
revenues, but sometime with
opportunity for taxes and levies
Medium (USD 1-5 million) – very large
(over USD 50 million)
5 – 25
•
Costs to prepare for start projectrelated investments
•
Investments with some or good
opportunities for revenues from
transaction benefits (e.g. Energy
feed-in tariffs, toll, cost reduction)
or from public sources (levies and
specific taxes).
Traditionally publicly financed and
increasingly a role and opportunity for
private sector.
Varying from income self-financing
through revenue streams via publicprivate partnerships to public
financing.
Driven by public sector, private sector
subcontracts or implements.
Financing Mostly public ranging from grants from
multilateral funds, to national R&D
budgets, to levies and specific taxes.
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Quantify Added Value
Return
Components
Project-phases
Climate
Change
return
Social
return
Economic
returns
A: Research
Other
returns
Total
(financial)
return
%/$
A
B: Development
B
C: Pilot Implementation
C
D: Commercial
Implementation
Total
D
A+B+C+D
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Accountable + Transparent
Sustainability
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… accountability and transparency in sustainable development
performance.
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… stepping up the development of bank products addressing
environmental, social and ethical issues;
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… validating the bank's sustainable development strategy
through dialogue with both internal and external stakeholders.
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… actively support initiatives and businesses in clean or
renewable energy technologies.
Source: ABN AMRO (leader in the Dow Jones Sustainability
indexes. (Quotes from a one-pager)
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Barriers
MACROLEVEL BARRIERS : COUNTRY
Country risk
Limited financial infrastructure
Weak, uncertain and unbalanced economic situation
Limited legal infrastructure
MESOLEVEL BARRIERS : SECTOR OR THEME
“First-time” effect
Regulatory framework
Cross subsidies / unfavourable taxation
Limited knowledge infrastructure or business infrastructure
MICROLEVEL BARRIERS : PROJECT
Capacity in local implementing and other stakeholders
Project- and site-related data
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General financing instruments
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Project finance
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Public Private Partnership (PPP)
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Build–Operate–Transfer (BOT)
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Export Credit Agencies (ECAs)
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Grants and subsidies
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Climate change related financing
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Multilateral and Intergovernmental
organizations
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Global Environment Facility (GEF) – Climate
Change Programme
• Special Climate Change Fund (SCCF)
• Least Developed Countries Fund (LDCF)
• Adaptation Fund (AF)
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World Bank - Carbon Financing
United Nations Environment Programme
(UNEP)
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Climate change related financing (2)
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Country-based instruments
Carbon Trust (United Kingdom)
 Green Financing (the Netherlands)
 Energy for Rural Transformation
(Uganda)
 Polish National Fund for Environmental
Protection (Poland)
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Climate change related financing (3)
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Other financing models
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E+Co
REEEP
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Deal brokers and market facilitators
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Financing instruments under construction
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JREC European Union-Patient Capital Initiative
The Netherlands EBRD Carbon Fund
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Cases:
AT Biopower
 Poland Efficient Lighting Project
(PELP)
 Canada Biodiesel Project:
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Buses in Toronto
 Garbage trucks in Winnipeg
 Cruise boats in Montreal
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Guidelines for innovative financing
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Tool 1: Added value for stakeholders
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Tool 2: Linkages to other themes
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Tool 3: Loud, Long, Legal – an effective
policy framework
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“Danke sehr
und
auf
Wiedersehen”
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