CLIMATE FINANCE

ACCELERATORNIGERIA

2018 ndash 2019

Webinar 2

Finance

Introduction

Hans Verolme

Climate Finance Accelerator ndash NigeriaWebinar 2 - Agenda

Introduction ndash Hans Verolme

How to ask questions

Attracting Private Capital through Blended

Finance

Lauren Carter

Blended Finance

Daniel Rossetto

Climate Mundial

QampA

Climate Finance Accelerator ndash Nigeria

Lauren Carter is a climate finance specialist based in Geneva who runs Invest4Climate a joint UNDP and World Bank initiative to crowd-in private investment for climate action in developing countries

Prior to joining UNDP she developed the private sector engagement strategy for the Green Climate Fundrsquos Private Sector Facility in partnership with the Centre for Clean Air Policy and Climate Finance Advisors

Lauren also served as the Director of Climate Finance Initiatives for a boutique advisory in Morocco where she guided the governmentrsquos engagement with the Green Climate Fund and other sources of climate finance

Working with government ministries multilateral development banks and private investors she developed a pipeline of bankable climate projects across the low-carbon transport renewable energy energy efficiency agriculture and land use sectors Lauren is also a specialist in private sector accreditation to the Green Climate Fund

Lauren Carter

Daniel Rossetto is Chief Executive of Climate Mundial one ofthe premier private sector climate finance and sustainabledevelopment firms

Daniel has pioneered on Paris Climate Bond (PCB) conceptdevelopment with the UNFCCC a financing concept that is nowbeing applied to fund registered projects across manycountries including The Gambia Kenya the Philippines andGhana

Climate Mundial is engaged in a global partnership with UNDPwhich includes support to developing counties to raise financefor NDCs

Daniel was author of a 2018 report for the Energy Commissionof Nigeria on domestic financial sector reforms to support gridconnected renewable energy investment

Prior to founding Climate Mundial Daniel was ExecutiveDirector for Environmental Markets at JP Morgan Chase

Daniel Rossetto

The ldquoHow to ask questionsrdquo slide

Please submit your question using the panel on the rightAttendee control panel

If your panel is minimised

click the orange button to

expand it

Type your question here

Attracting Private Capital

through Blended Finance

Lauren Carter

Attracting Private Capital through Blended Finance CLIMATE FINANCE ACCELERATOR NIGERIA

JANUARY 2019

copy L Carter Consulting LLC

Principles of blended financeDefinition

Blended finance is the strategic use of catalytic capital from public and philanthropic sources to mobilize additional private sector investment for sustainable development in emerging markets

Key Characteristics

bull Financial Return

bull Public Investment or Philanthropic Investment is Catalytic

bull Addresses 1 or more Sustainable Development Goals (SDGs)

Purpose

Blended finance allows organizations with different objectives to invest alongside each other while achieving their own objectives (whether financial return social impact or a blend of both)

copy L Carter Consulting LLC

Blended finance allows different types of investors to invest alongside each other while achieving their own objectives

Nigeriarsquos Climate Ambitions

bull Nigeria estimates in itrsquos 2015 INDC that financing its NDC ambitions will cost $142 billion USD while achieving $304 billion in economic benefits

bull Nigeria aims to have 13 GWs in off-grid solar in addition to improving the electricity grid

bullBlended finance investors (especially public or philanthropic funders) usually want to align their investments to country priorities and policies (see Nigerian NDC)

Source Nigerian Governmentcopy L Carter Consulting LLC

Introduction

Hans Verolme

Climate Finance Accelerator ndash NigeriaWebinar 2 - Agenda

Introduction ndash Hans Verolme

How to ask questions

Attracting Private Capital through Blended

Finance

Lauren Carter

Blended Finance

Daniel Rossetto

Climate Mundial

QampA

Climate Finance Accelerator ndash Nigeria

Lauren Carter is a climate finance specialist based in Geneva who runs Invest4Climate a joint UNDP and World Bank initiative to crowd-in private investment for climate action in developing countries

Prior to joining UNDP she developed the private sector engagement strategy for the Green Climate Fundrsquos Private Sector Facility in partnership with the Centre for Clean Air Policy and Climate Finance Advisors

Lauren also served as the Director of Climate Finance Initiatives for a boutique advisory in Morocco where she guided the governmentrsquos engagement with the Green Climate Fund and other sources of climate finance

Working with government ministries multilateral development banks and private investors she developed a pipeline of bankable climate projects across the low-carbon transport renewable energy energy efficiency agriculture and land use sectors Lauren is also a specialist in private sector accreditation to the Green Climate Fund

Lauren Carter

Daniel Rossetto is Chief Executive of Climate Mundial one ofthe premier private sector climate finance and sustainabledevelopment firms

Daniel has pioneered on Paris Climate Bond (PCB) conceptdevelopment with the UNFCCC a financing concept that is nowbeing applied to fund registered projects across manycountries including The Gambia Kenya the Philippines andGhana

Climate Mundial is engaged in a global partnership with UNDPwhich includes support to developing counties to raise financefor NDCs

Daniel was author of a 2018 report for the Energy Commissionof Nigeria on domestic financial sector reforms to support gridconnected renewable energy investment

Prior to founding Climate Mundial Daniel was ExecutiveDirector for Environmental Markets at JP Morgan Chase

Daniel Rossetto

The ldquoHow to ask questionsrdquo slide

Please submit your question using the panel on the rightAttendee control panel

If your panel is minimised

click the orange button to

expand it

Type your question here

Attracting Private Capital

through Blended Finance

Lauren Carter

Attracting Private Capital through Blended Finance CLIMATE FINANCE ACCELERATOR NIGERIA

JANUARY 2019

copy L Carter Consulting LLC

Principles of blended financeDefinition

Blended finance is the strategic use of catalytic capital from public and philanthropic sources to mobilize additional private sector investment for sustainable development in emerging markets

Key Characteristics

bull Financial Return

bull Public Investment or Philanthropic Investment is Catalytic

bull Addresses 1 or more Sustainable Development Goals (SDGs)

Purpose

Blended finance allows organizations with different objectives to invest alongside each other while achieving their own objectives (whether financial return social impact or a blend of both)

copy L Carter Consulting LLC

Blended finance allows different types of investors to invest alongside each other while achieving their own objectives

Nigeriarsquos Climate Ambitions

bull Nigeria estimates in itrsquos 2015 INDC that financing its NDC ambitions will cost $142 billion USD while achieving $304 billion in economic benefits

bull Nigeria aims to have 13 GWs in off-grid solar in addition to improving the electricity grid

bullBlended finance investors (especially public or philanthropic funders) usually want to align their investments to country priorities and policies (see Nigerian NDC)

Source Nigerian Governmentcopy L Carter Consulting LLC

Climate Finance Accelerator ndash NigeriaWebinar 2 - Agenda

Introduction ndash Hans Verolme

How to ask questions

Attracting Private Capital through Blended

Finance

Lauren Carter

Blended Finance

Daniel Rossetto

Climate Mundial

QampA

Climate Finance Accelerator ndash Nigeria

Lauren Carter is a climate finance specialist based in Geneva who runs Invest4Climate a joint UNDP and World Bank initiative to crowd-in private investment for climate action in developing countries

Prior to joining UNDP she developed the private sector engagement strategy for the Green Climate Fundrsquos Private Sector Facility in partnership with the Centre for Clean Air Policy and Climate Finance Advisors

Lauren also served as the Director of Climate Finance Initiatives for a boutique advisory in Morocco where she guided the governmentrsquos engagement with the Green Climate Fund and other sources of climate finance

Working with government ministries multilateral development banks and private investors she developed a pipeline of bankable climate projects across the low-carbon transport renewable energy energy efficiency agriculture and land use sectors Lauren is also a specialist in private sector accreditation to the Green Climate Fund

Lauren Carter

Daniel Rossetto is Chief Executive of Climate Mundial one ofthe premier private sector climate finance and sustainabledevelopment firms

Daniel has pioneered on Paris Climate Bond (PCB) conceptdevelopment with the UNFCCC a financing concept that is nowbeing applied to fund registered projects across manycountries including The Gambia Kenya the Philippines andGhana

Climate Mundial is engaged in a global partnership with UNDPwhich includes support to developing counties to raise financefor NDCs

Daniel was author of a 2018 report for the Energy Commissionof Nigeria on domestic financial sector reforms to support gridconnected renewable energy investment

Prior to founding Climate Mundial Daniel was ExecutiveDirector for Environmental Markets at JP Morgan Chase

Daniel Rossetto

The ldquoHow to ask questionsrdquo slide

Please submit your question using the panel on the rightAttendee control panel

If your panel is minimised

click the orange button to

expand it

Type your question here

Attracting Private Capital

through Blended Finance

Lauren Carter

Attracting Private Capital through Blended Finance CLIMATE FINANCE ACCELERATOR NIGERIA

JANUARY 2019

copy L Carter Consulting LLC

Principles of blended financeDefinition

Blended finance is the strategic use of catalytic capital from public and philanthropic sources to mobilize additional private sector investment for sustainable development in emerging markets

Key Characteristics

bull Financial Return

bull Public Investment or Philanthropic Investment is Catalytic

bull Addresses 1 or more Sustainable Development Goals (SDGs)

Purpose

Blended finance allows organizations with different objectives to invest alongside each other while achieving their own objectives (whether financial return social impact or a blend of both)

copy L Carter Consulting LLC

Blended finance allows different types of investors to invest alongside each other while achieving their own objectives

Nigeriarsquos Climate Ambitions

bull Nigeria estimates in itrsquos 2015 INDC that financing its NDC ambitions will cost $142 billion USD while achieving $304 billion in economic benefits

bull Nigeria aims to have 13 GWs in off-grid solar in addition to improving the electricity grid

bullBlended finance investors (especially public or philanthropic funders) usually want to align their investments to country priorities and policies (see Nigerian NDC)

Source Nigerian Governmentcopy L Carter Consulting LLC

Climate Finance Accelerator ndash Nigeria

Lauren Carter is a climate finance specialist based in Geneva who runs Invest4Climate a joint UNDP and World Bank initiative to crowd-in private investment for climate action in developing countries

Prior to joining UNDP she developed the private sector engagement strategy for the Green Climate Fundrsquos Private Sector Facility in partnership with the Centre for Clean Air Policy and Climate Finance Advisors

Lauren also served as the Director of Climate Finance Initiatives for a boutique advisory in Morocco where she guided the governmentrsquos engagement with the Green Climate Fund and other sources of climate finance

Working with government ministries multilateral development banks and private investors she developed a pipeline of bankable climate projects across the low-carbon transport renewable energy energy efficiency agriculture and land use sectors Lauren is also a specialist in private sector accreditation to the Green Climate Fund

Lauren Carter

Daniel Rossetto is Chief Executive of Climate Mundial one ofthe premier private sector climate finance and sustainabledevelopment firms

Daniel has pioneered on Paris Climate Bond (PCB) conceptdevelopment with the UNFCCC a financing concept that is nowbeing applied to fund registered projects across manycountries including The Gambia Kenya the Philippines andGhana

Climate Mundial is engaged in a global partnership with UNDPwhich includes support to developing counties to raise financefor NDCs

Daniel was author of a 2018 report for the Energy Commissionof Nigeria on domestic financial sector reforms to support gridconnected renewable energy investment

Prior to founding Climate Mundial Daniel was ExecutiveDirector for Environmental Markets at JP Morgan Chase

Daniel Rossetto

The ldquoHow to ask questionsrdquo slide

Please submit your question using the panel on the rightAttendee control panel

If your panel is minimised

click the orange button to

expand it

Type your question here

Attracting Private Capital

through Blended Finance

Lauren Carter

Attracting Private Capital through Blended Finance CLIMATE FINANCE ACCELERATOR NIGERIA

JANUARY 2019

copy L Carter Consulting LLC

Principles of blended financeDefinition

Blended finance is the strategic use of catalytic capital from public and philanthropic sources to mobilize additional private sector investment for sustainable development in emerging markets

Key Characteristics

bull Financial Return

bull Public Investment or Philanthropic Investment is Catalytic

bull Addresses 1 or more Sustainable Development Goals (SDGs)

Purpose

Blended finance allows organizations with different objectives to invest alongside each other while achieving their own objectives (whether financial return social impact or a blend of both)

copy L Carter Consulting LLC

Blended finance allows different types of investors to invest alongside each other while achieving their own objectives

Nigeriarsquos Climate Ambitions

bull Nigeria estimates in itrsquos 2015 INDC that financing its NDC ambitions will cost $142 billion USD while achieving $304 billion in economic benefits

bull Nigeria aims to have 13 GWs in off-grid solar in addition to improving the electricity grid

bullBlended finance investors (especially public or philanthropic funders) usually want to align their investments to country priorities and policies (see Nigerian NDC)

Source Nigerian Governmentcopy L Carter Consulting LLC

The ldquoHow to ask questionsrdquo slide

Please submit your question using the panel on the rightAttendee control panel

If your panel is minimised

click the orange button to

expand it

Type your question here

Attracting Private Capital

through Blended Finance

Lauren Carter

Attracting Private Capital through Blended Finance CLIMATE FINANCE ACCELERATOR NIGERIA

JANUARY 2019

copy L Carter Consulting LLC

Principles of blended financeDefinition

Blended finance is the strategic use of catalytic capital from public and philanthropic sources to mobilize additional private sector investment for sustainable development in emerging markets

Key Characteristics

bull Financial Return

bull Public Investment or Philanthropic Investment is Catalytic

bull Addresses 1 or more Sustainable Development Goals (SDGs)

Purpose

Blended finance allows organizations with different objectives to invest alongside each other while achieving their own objectives (whether financial return social impact or a blend of both)

copy L Carter Consulting LLC

Blended finance allows different types of investors to invest alongside each other while achieving their own objectives

Nigeriarsquos Climate Ambitions

bull Nigeria estimates in itrsquos 2015 INDC that financing its NDC ambitions will cost $142 billion USD while achieving $304 billion in economic benefits

bull Nigeria aims to have 13 GWs in off-grid solar in addition to improving the electricity grid

bullBlended finance investors (especially public or philanthropic funders) usually want to align their investments to country priorities and policies (see Nigerian NDC)

Source Nigerian Governmentcopy L Carter Consulting LLC

Attracting Private Capital

through Blended Finance

Lauren Carter

Attracting Private Capital through Blended Finance CLIMATE FINANCE ACCELERATOR NIGERIA

JANUARY 2019

copy L Carter Consulting LLC

Principles of blended financeDefinition

Blended finance is the strategic use of catalytic capital from public and philanthropic sources to mobilize additional private sector investment for sustainable development in emerging markets

Key Characteristics

bull Financial Return

bull Public Investment or Philanthropic Investment is Catalytic

bull Addresses 1 or more Sustainable Development Goals (SDGs)

Purpose

Blended finance allows organizations with different objectives to invest alongside each other while achieving their own objectives (whether financial return social impact or a blend of both)

copy L Carter Consulting LLC

Blended finance allows different types of investors to invest alongside each other while achieving their own objectives

Nigeriarsquos Climate Ambitions

bull Nigeria estimates in itrsquos 2015 INDC that financing its NDC ambitions will cost $142 billion USD while achieving $304 billion in economic benefits

bull Nigeria aims to have 13 GWs in off-grid solar in addition to improving the electricity grid

bullBlended finance investors (especially public or philanthropic funders) usually want to align their investments to country priorities and policies (see Nigerian NDC)

Source Nigerian Governmentcopy L Carter Consulting LLC

Attracting Private Capital through Blended Finance CLIMATE FINANCE ACCELERATOR NIGERIA

JANUARY 2019

copy L Carter Consulting LLC

Principles of blended financeDefinition

Blended finance is the strategic use of catalytic capital from public and philanthropic sources to mobilize additional private sector investment for sustainable development in emerging markets

Key Characteristics

bull Financial Return

bull Public Investment or Philanthropic Investment is Catalytic

bull Addresses 1 or more Sustainable Development Goals (SDGs)

Purpose

Blended finance allows organizations with different objectives to invest alongside each other while achieving their own objectives (whether financial return social impact or a blend of both)

copy L Carter Consulting LLC

Blended finance allows different types of investors to invest alongside each other while achieving their own objectives

Nigeriarsquos Climate Ambitions

bull Nigeria estimates in itrsquos 2015 INDC that financing its NDC ambitions will cost $142 billion USD while achieving $304 billion in economic benefits

bull Nigeria aims to have 13 GWs in off-grid solar in addition to improving the electricity grid

bullBlended finance investors (especially public or philanthropic funders) usually want to align their investments to country priorities and policies (see Nigerian NDC)

Source Nigerian Governmentcopy L Carter Consulting LLC

Principles of blended financeDefinition

Blended finance is the strategic use of catalytic capital from public and philanthropic sources to mobilize additional private sector investment for sustainable development in emerging markets

Key Characteristics

bull Financial Return

bull Public Investment or Philanthropic Investment is Catalytic

bull Addresses 1 or more Sustainable Development Goals (SDGs)

Purpose

Blended finance allows organizations with different objectives to invest alongside each other while achieving their own objectives (whether financial return social impact or a blend of both)

copy L Carter Consulting LLC

Blended finance allows different types of investors to invest alongside each other while achieving their own objectives

Nigeriarsquos Climate Ambitions

bull Nigeria estimates in itrsquos 2015 INDC that financing its NDC ambitions will cost $142 billion USD while achieving $304 billion in economic benefits

bull Nigeria aims to have 13 GWs in off-grid solar in addition to improving the electricity grid

bullBlended finance investors (especially public or philanthropic funders) usually want to align their investments to country priorities and policies (see Nigerian NDC)

Source Nigerian Governmentcopy L Carter Consulting LLC

Blended finance allows different types of investors to invest alongside each other while achieving their own objectives

Nigeriarsquos Climate Ambitions

bull Nigeria estimates in itrsquos 2015 INDC that financing its NDC ambitions will cost $142 billion USD while achieving $304 billion in economic benefits

bull Nigeria aims to have 13 GWs in off-grid solar in addition to improving the electricity grid

bullBlended finance investors (especially public or philanthropic funders) usually want to align their investments to country priorities and policies (see Nigerian NDC)

Source Nigerian Governmentcopy L Carter Consulting LLC

Nigeriarsquos Climate Ambitions

bull Nigeria estimates in itrsquos 2015 INDC that financing its NDC ambitions will cost $142 billion USD while achieving $304 billion in economic benefits

bull Nigeria aims to have 13 GWs in off-grid solar in addition to improving the electricity grid

bullBlended finance investors (especially public or philanthropic funders) usually want to align their investments to country priorities and policies (see Nigerian NDC)

Source Nigerian Governmentcopy L Carter Consulting LLC

State of Blended FinanceRegion

Source State of Blended Finance 2018 Convergence copy L Carter Consulting LLC

State of Blended FinanceDeal Size

bull 314 Deals in 2017

bull More than $100 billion mobilized to date

bull Median ticket size is $56 million

bull Largest percentage of deals are between $10 ndash 25 million

Source State of Blended Finance 2018 Convergence copy L Carter Consulting LLC

State of Blended FinanceDeal Type

Funds

bull Most common (55)

bull Includes equity funds debt funds and funds-of-funds

Projects

bull Large deals

bull Usually infrastructure

Companies

bull Often SMEs or Social Businesses in need of early stage grant funding and capacity building

Facilities

Bonds notes

Source State of Blended Finance 2018 Convergence copy L Carter Consulting LLC

State of Blended FinanceEnergy

Source State of Blended Finance 2018 Convergence copy L Carter Consulting LLC

Example Structures for Blended Finance

Source State of Blended Finance 2018 Convergence

copy L Carter Consulting LLC

Source A Resource for Structuring Blended Finance Vehicles The GIIN

32

1

copy L Carter Consulting LLC

Case Studies for Blended Finance

Blended concessional finance can address a variety of development issues without demanding market-level compensation for example by providing

bullMore risk capital in the form of equity subordinated loans or preferred shares to improve the risk profile for senior lenders

bullBelow market interest payments to improve the overall project profitability

bullPartial credit guarantees to lower risk for lenders and ensure an appropriate risk-adjusted return to the project

bullPortfolio risk sharing to reduce the risk of losses for bank or fund portfolios (eg for SMEs)

bullBelow market loans to provide liquidity and cost support for banks to support excluded high costhigh risk segments (eg female entrepreneurs)

bullGuarantees and credit enhancements for fund structures to mitigate risk and attract institutional investors

bullGrants that provide critical investment support in high risk situations or address higher initial costs with innovative technologies

Source DFI Working Group on Blended Concessional Finance for Private Sector Projects copy L Carter Consulting LLC

Blending Approaches

Different types of deals require different blending approaches bull Funds most commonly benefit from concessional capital and technical assistance fundsbull Projects are most likely to receive a guarantee complemented by technical assistance and bull Companies (often social enterprises) are most likely to receive concessional capital or design-grant

funding for business model proof of concept or improvement

Source State of Blended Finance 2018 Convergence copy L Carter Consulting LLC

2

2

Sources of Blended Finance NigeriaEnergyAg

FundsMeridiam Infra Africa FundAxepoint CapitalMPC CapitalChina Africa Development FundMacquarieActisClimate Investor OneAfrica Infrastructure Investment Managers

Family OfficesWye Holdings

Platforms Climate PlaceIRENA Project NavigatorConvergence

State of Blended FinanceDeal Size

bull 314 Deals in 2017

bull More than $100 billion mobilized to date

bull Median ticket size is $56 million

bull Largest percentage of deals are between $10 ndash 25 million

Source State of Blended Finance 2018 Convergence copy L Carter Consulting LLC

State of Blended FinanceDeal Type

Funds

bull Most common (55)

bull Includes equity funds debt funds and funds-of-funds

Projects

bull Large deals

bull Usually infrastructure

Companies

bull Often SMEs or Social Businesses in need of early stage grant funding and capacity building

Facilities

Bonds notes

Source State of Blended Finance 2018 Convergence copy L Carter Consulting LLC

State of Blended FinanceEnergy

Source State of Blended Finance 2018 Convergence copy L Carter Consulting LLC

Example Structures for Blended Finance

Source State of Blended Finance 2018 Convergence

copy L Carter Consulting LLC

Source A Resource for Structuring Blended Finance Vehicles The GIIN

32

1

copy L Carter Consulting LLC

Case Studies for Blended Finance

Blended concessional finance can address a variety of development issues without demanding market-level compensation for example by providing

bullMore risk capital in the form of equity subordinated loans or preferred shares to improve the risk profile for senior lenders

bullBelow market interest payments to improve the overall project profitability

bullPartial credit guarantees to lower risk for lenders and ensure an appropriate risk-adjusted return to the project

bullPortfolio risk sharing to reduce the risk of losses for bank or fund portfolios (eg for SMEs)

bullBelow market loans to provide liquidity and cost support for banks to support excluded high costhigh risk segments (eg female entrepreneurs)

bullGuarantees and credit enhancements for fund structures to mitigate risk and attract institutional investors

bullGrants that provide critical investment support in high risk situations or address higher initial costs with innovative technologies

Source DFI Working Group on Blended Concessional Finance for Private Sector Projects copy L Carter Consulting LLC

Blending Approaches

Different types of deals require different blending approaches bull Funds most commonly benefit from concessional capital and technical assistance fundsbull Projects are most likely to receive a guarantee complemented by technical assistance and bull Companies (often social enterprises) are most likely to receive concessional capital or design-grant

funding for business model proof of concept or improvement

Source State of Blended Finance 2018 Convergence copy L Carter Consulting LLC

2

2

Sources of Blended Finance NigeriaEnergyAg

FundsMeridiam Infra Africa FundAxepoint CapitalMPC CapitalChina Africa Development FundMacquarieActisClimate Investor OneAfrica Infrastructure Investment Managers

Family OfficesWye Holdings

Platforms Climate PlaceIRENA Project NavigatorConvergence

State of Blended FinanceDeal Type

Funds

bull Most common (55)

bull Includes equity funds debt funds and funds-of-funds

Projects

bull Large deals

bull Usually infrastructure

Companies

bull Often SMEs or Social Businesses in need of early stage grant funding and capacity building

Facilities

Bonds notes

Source State of Blended Finance 2018 Convergence copy L Carter Consulting LLC

State of Blended FinanceEnergy

Source State of Blended Finance 2018 Convergence copy L Carter Consulting LLC

Example Structures for Blended Finance

Source State of Blended Finance 2018 Convergence

copy L Carter Consulting LLC

Source A Resource for Structuring Blended Finance Vehicles The GIIN

32

1

copy L Carter Consulting LLC

Case Studies for Blended Finance

Blended concessional finance can address a variety of development issues without demanding market-level compensation for example by providing

bullMore risk capital in the form of equity subordinated loans or preferred shares to improve the risk profile for senior lenders

bullBelow market interest payments to improve the overall project profitability

bullPartial credit guarantees to lower risk for lenders and ensure an appropriate risk-adjusted return to the project

bullPortfolio risk sharing to reduce the risk of losses for bank or fund portfolios (eg for SMEs)

bullBelow market loans to provide liquidity and cost support for banks to support excluded high costhigh risk segments (eg female entrepreneurs)

bullGuarantees and credit enhancements for fund structures to mitigate risk and attract institutional investors

bullGrants that provide critical investment support in high risk situations or address higher initial costs with innovative technologies

Source DFI Working Group on Blended Concessional Finance for Private Sector Projects copy L Carter Consulting LLC

Blending Approaches

Different types of deals require different blending approaches bull Funds most commonly benefit from concessional capital and technical assistance fundsbull Projects are most likely to receive a guarantee complemented by technical assistance and bull Companies (often social enterprises) are most likely to receive concessional capital or design-grant

funding for business model proof of concept or improvement

Source State of Blended Finance 2018 Convergence copy L Carter Consulting LLC

2

2

Sources of Blended Finance NigeriaEnergyAg

FundsMeridiam Infra Africa FundAxepoint CapitalMPC CapitalChina Africa Development FundMacquarieActisClimate Investor OneAfrica Infrastructure Investment Managers

Family OfficesWye Holdings

Platforms Climate PlaceIRENA Project NavigatorConvergence

State of Blended FinanceEnergy

Source State of Blended Finance 2018 Convergence copy L Carter Consulting LLC

Example Structures for Blended Finance

Source State of Blended Finance 2018 Convergence

copy L Carter Consulting LLC

Source A Resource for Structuring Blended Finance Vehicles The GIIN

32

1

copy L Carter Consulting LLC

Case Studies for Blended Finance

Blended concessional finance can address a variety of development issues without demanding market-level compensation for example by providing

bullMore risk capital in the form of equity subordinated loans or preferred shares to improve the risk profile for senior lenders

bullBelow market interest payments to improve the overall project profitability

bullPartial credit guarantees to lower risk for lenders and ensure an appropriate risk-adjusted return to the project

bullPortfolio risk sharing to reduce the risk of losses for bank or fund portfolios (eg for SMEs)

bullBelow market loans to provide liquidity and cost support for banks to support excluded high costhigh risk segments (eg female entrepreneurs)

bullGuarantees and credit enhancements for fund structures to mitigate risk and attract institutional investors

bullGrants that provide critical investment support in high risk situations or address higher initial costs with innovative technologies

Source DFI Working Group on Blended Concessional Finance for Private Sector Projects copy L Carter Consulting LLC

Blending Approaches

Different types of deals require different blending approaches bull Funds most commonly benefit from concessional capital and technical assistance fundsbull Projects are most likely to receive a guarantee complemented by technical assistance and bull Companies (often social enterprises) are most likely to receive concessional capital or design-grant

funding for business model proof of concept or improvement

Source State of Blended Finance 2018 Convergence copy L Carter Consulting LLC

2

2

Sources of Blended Finance NigeriaEnergyAg

FundsMeridiam Infra Africa FundAxepoint CapitalMPC CapitalChina Africa Development FundMacquarieActisClimate Investor OneAfrica Infrastructure Investment Managers

Family OfficesWye Holdings

Platforms Climate PlaceIRENA Project NavigatorConvergence

Example Structures for Blended Finance

Source State of Blended Finance 2018 Convergence

copy L Carter Consulting LLC

Source A Resource for Structuring Blended Finance Vehicles The GIIN

32

1

copy L Carter Consulting LLC

Case Studies for Blended Finance

Blended concessional finance can address a variety of development issues without demanding market-level compensation for example by providing

bullMore risk capital in the form of equity subordinated loans or preferred shares to improve the risk profile for senior lenders

bullBelow market interest payments to improve the overall project profitability

bullPartial credit guarantees to lower risk for lenders and ensure an appropriate risk-adjusted return to the project

bullPortfolio risk sharing to reduce the risk of losses for bank or fund portfolios (eg for SMEs)

bullBelow market loans to provide liquidity and cost support for banks to support excluded high costhigh risk segments (eg female entrepreneurs)

bullGuarantees and credit enhancements for fund structures to mitigate risk and attract institutional investors

bullGrants that provide critical investment support in high risk situations or address higher initial costs with innovative technologies

Source DFI Working Group on Blended Concessional Finance for Private Sector Projects copy L Carter Consulting LLC

Blending Approaches

Different types of deals require different blending approaches bull Funds most commonly benefit from concessional capital and technical assistance fundsbull Projects are most likely to receive a guarantee complemented by technical assistance and bull Companies (often social enterprises) are most likely to receive concessional capital or design-grant

funding for business model proof of concept or improvement

Source State of Blended Finance 2018 Convergence copy L Carter Consulting LLC

2

2

Sources of Blended Finance NigeriaEnergyAg

FundsMeridiam Infra Africa FundAxepoint CapitalMPC CapitalChina Africa Development FundMacquarieActisClimate Investor OneAfrica Infrastructure Investment Managers

Family OfficesWye Holdings

Platforms Climate PlaceIRENA Project NavigatorConvergence

Source A Resource for Structuring Blended Finance Vehicles The GIIN

32

1

copy L Carter Consulting LLC

Case Studies for Blended Finance

Blended concessional finance can address a variety of development issues without demanding market-level compensation for example by providing

bullMore risk capital in the form of equity subordinated loans or preferred shares to improve the risk profile for senior lenders

bullBelow market interest payments to improve the overall project profitability

bullPartial credit guarantees to lower risk for lenders and ensure an appropriate risk-adjusted return to the project

bullPortfolio risk sharing to reduce the risk of losses for bank or fund portfolios (eg for SMEs)

bullBelow market loans to provide liquidity and cost support for banks to support excluded high costhigh risk segments (eg female entrepreneurs)

bullGuarantees and credit enhancements for fund structures to mitigate risk and attract institutional investors

bullGrants that provide critical investment support in high risk situations or address higher initial costs with innovative technologies

Source DFI Working Group on Blended Concessional Finance for Private Sector Projects copy L Carter Consulting LLC

Blending Approaches

Different types of deals require different blending approaches bull Funds most commonly benefit from concessional capital and technical assistance fundsbull Projects are most likely to receive a guarantee complemented by technical assistance and bull Companies (often social enterprises) are most likely to receive concessional capital or design-grant

funding for business model proof of concept or improvement

Source State of Blended Finance 2018 Convergence copy L Carter Consulting LLC

2

2

Sources of Blended Finance NigeriaEnergyAg

FundsMeridiam Infra Africa FundAxepoint CapitalMPC CapitalChina Africa Development FundMacquarieActisClimate Investor OneAfrica Infrastructure Investment Managers

Family OfficesWye Holdings

Platforms Climate PlaceIRENA Project NavigatorConvergence

Case Studies for Blended Finance

Blended concessional finance can address a variety of development issues without demanding market-level compensation for example by providing

bullMore risk capital in the form of equity subordinated loans or preferred shares to improve the risk profile for senior lenders

bullBelow market interest payments to improve the overall project profitability

bullPartial credit guarantees to lower risk for lenders and ensure an appropriate risk-adjusted return to the project

bullPortfolio risk sharing to reduce the risk of losses for bank or fund portfolios (eg for SMEs)

bullBelow market loans to provide liquidity and cost support for banks to support excluded high costhigh risk segments (eg female entrepreneurs)

bullGuarantees and credit enhancements for fund structures to mitigate risk and attract institutional investors

bullGrants that provide critical investment support in high risk situations or address higher initial costs with innovative technologies

Source DFI Working Group on Blended Concessional Finance for Private Sector Projects copy L Carter Consulting LLC

Blending Approaches

Different types of deals require different blending approaches bull Funds most commonly benefit from concessional capital and technical assistance fundsbull Projects are most likely to receive a guarantee complemented by technical assistance and bull Companies (often social enterprises) are most likely to receive concessional capital or design-grant

funding for business model proof of concept or improvement

Source State of Blended Finance 2018 Convergence copy L Carter Consulting LLC

2

2

Sources of Blended Finance NigeriaEnergyAg

FundsMeridiam Infra Africa FundAxepoint CapitalMPC CapitalChina Africa Development FundMacquarieActisClimate Investor OneAfrica Infrastructure Investment Managers

Family OfficesWye Holdings

Platforms Climate PlaceIRENA Project NavigatorConvergence

Blending Approaches

Different types of deals require different blending approaches bull Funds most commonly benefit from concessional capital and technical assistance fundsbull Projects are most likely to receive a guarantee complemented by technical assistance and bull Companies (often social enterprises) are most likely to receive concessional capital or design-grant

funding for business model proof of concept or improvement

Source State of Blended Finance 2018 Convergence copy L Carter Consulting LLC

2

2

Sources of Blended Finance NigeriaEnergyAg

FundsMeridiam Infra Africa FundAxepoint CapitalMPC CapitalChina Africa Development FundMacquarieActisClimate Investor OneAfrica Infrastructure Investment Managers

Family OfficesWye Holdings

Platforms Climate PlaceIRENA Project NavigatorConvergence

2

2

Sources of Blended Finance NigeriaEnergyAg

FundsMeridiam Infra Africa FundAxepoint CapitalMPC CapitalChina Africa Development FundMacquarieActisClimate Investor OneAfrica Infrastructure Investment Managers

Family OfficesWye Holdings

Platforms Climate PlaceIRENA Project NavigatorConvergence

2

Sources of Blended Finance NigeriaEnergyAg

FundsMeridiam Infra Africa FundAxepoint CapitalMPC CapitalChina Africa Development FundMacquarieActisClimate Investor OneAfrica Infrastructure Investment Managers

Family OfficesWye Holdings

Platforms Climate PlaceIRENA Project NavigatorConvergence

Sources of Blended Finance NigeriaEnergyAg

FundsMeridiam Infra Africa FundAxepoint CapitalMPC CapitalChina Africa Development FundMacquarieActisClimate Investor OneAfrica Infrastructure Investment Managers

Family OfficesWye Holdings

Platforms Climate PlaceIRENA Project NavigatorConvergence

Annex

bull Blended Finance Funders bull Guidelines for Blended Finance Structure by Instrumentbull Additional Resources bull Questions

copy L Carter Consulting LLC

Blended Finance Funders

copy L Carter Consulting LLC Source State of Blended Finance 2018 Convergence

Blended Finance FundersPublic Investors with Development Mandates

copy L Carter Consulting LLC Source State of Blended Finance 2018 Convergence

Blended Finance FundersDFIs and MDBs

copy L Carter Consulting LLC Source State of Blended Finance 2018 Convergence

Blended Finance FundersImpact Investors

copy L Carter Consulting LLC Source State of Blended Finance 2018 Convergence

Blended Finance FundersPrivate Investors

copy L Carter Consulting LLC Source State of Blended Finance 2018 Convergence

1

1

3

3

Additional Resources bull DFI Working Group on Blended Finance

bull OECD DAC Blended Finance Principles

bull State of Blended Finance Convergence

bull A Resource for Structuring Blended Finance Vehicles The GIIN

bull Making Blended Finance Work for the Sustainable Development Goals

Blended Finance Funders

copy L Carter Consulting LLC Source State of Blended Finance 2018 Convergence

Blended Finance FundersPublic Investors with Development Mandates

copy L Carter Consulting LLC Source State of Blended Finance 2018 Convergence

Blended Finance FundersDFIs and MDBs

copy L Carter Consulting LLC Source State of Blended Finance 2018 Convergence

Blended Finance FundersImpact Investors

copy L Carter Consulting LLC Source State of Blended Finance 2018 Convergence

Blended Finance FundersPrivate Investors

copy L Carter Consulting LLC Source State of Blended Finance 2018 Convergence

1

1

3

3

Additional Resources bull DFI Working Group on Blended Finance

bull OECD DAC Blended Finance Principles

bull State of Blended Finance Convergence

bull A Resource for Structuring Blended Finance Vehicles The GIIN

bull Making Blended Finance Work for the Sustainable Development Goals

Blended Finance FundersPublic Investors with Development Mandates

copy L Carter Consulting LLC Source State of Blended Finance 2018 Convergence

Blended Finance FundersDFIs and MDBs

copy L Carter Consulting LLC Source State of Blended Finance 2018 Convergence

Blended Finance FundersImpact Investors

copy L Carter Consulting LLC Source State of Blended Finance 2018 Convergence

Blended Finance FundersPrivate Investors

copy L Carter Consulting LLC Source State of Blended Finance 2018 Convergence

1

1

3

3

Additional Resources bull DFI Working Group on Blended Finance

bull OECD DAC Blended Finance Principles

bull State of Blended Finance Convergence

bull A Resource for Structuring Blended Finance Vehicles The GIIN

bull Making Blended Finance Work for the Sustainable Development Goals

Blended Finance FundersDFIs and MDBs

copy L Carter Consulting LLC Source State of Blended Finance 2018 Convergence

Blended Finance FundersImpact Investors

copy L Carter Consulting LLC Source State of Blended Finance 2018 Convergence

Blended Finance FundersPrivate Investors

copy L Carter Consulting LLC Source State of Blended Finance 2018 Convergence

1

1

3

3

Additional Resources bull DFI Working Group on Blended Finance

bull OECD DAC Blended Finance Principles

bull State of Blended Finance Convergence

bull A Resource for Structuring Blended Finance Vehicles The GIIN

bull Making Blended Finance Work for the Sustainable Development Goals

Blended Finance FundersImpact Investors

copy L Carter Consulting LLC Source State of Blended Finance 2018 Convergence

Blended Finance FundersPrivate Investors

copy L Carter Consulting LLC Source State of Blended Finance 2018 Convergence

1

1

3

3

Additional Resources bull DFI Working Group on Blended Finance

bull OECD DAC Blended Finance Principles

bull State of Blended Finance Convergence

bull A Resource for Structuring Blended Finance Vehicles The GIIN

bull Making Blended Finance Work for the Sustainable Development Goals

Blended Finance FundersPrivate Investors

copy L Carter Consulting LLC Source State of Blended Finance 2018 Convergence

1

1

3

3

Additional Resources bull DFI Working Group on Blended Finance

bull OECD DAC Blended Finance Principles

bull State of Blended Finance Convergence

bull A Resource for Structuring Blended Finance Vehicles The GIIN

bull Making Blended Finance Work for the Sustainable Development Goals

1

1

3

3

Additional Resources bull DFI Working Group on Blended Finance

bull OECD DAC Blended Finance Principles

bull State of Blended Finance Convergence

bull A Resource for Structuring Blended Finance Vehicles The GIIN

bull Making Blended Finance Work for the Sustainable Development Goals

1

3

3

Additional Resources bull DFI Working Group on Blended Finance

bull OECD DAC Blended Finance Principles

bull State of Blended Finance Convergence

bull A Resource for Structuring Blended Finance Vehicles The GIIN

bull Making Blended Finance Work for the Sustainable Development Goals

3

3

Additional Resources bull DFI Working Group on Blended Finance

bull OECD DAC Blended Finance Principles

bull State of Blended Finance Convergence

bull A Resource for Structuring Blended Finance Vehicles The GIIN

bull Making Blended Finance Work for the Sustainable Development Goals

3

Additional Resources bull DFI Working Group on Blended Finance

bull OECD DAC Blended Finance Principles

bull State of Blended Finance Convergence

bull A Resource for Structuring Blended Finance Vehicles The GIIN

bull Making Blended Finance Work for the Sustainable Development Goals

Additional Resources bull DFI Working Group on Blended Finance

bull OECD DAC Blended Finance Principles

bull State of Blended Finance Convergence

bull A Resource for Structuring Blended Finance Vehicles The GIIN

bull Making Blended Finance Work for the Sustainable Development Goals

QuestionsbullKey challenges in accessing capital

bullWhat instruments or resources are you looking for

Blended Finance

Daniel Rossetto

Climate Mundial

QampA

CFANigeriaclimateadvisersnet

Blended Finance

Daniel Rossetto

Climate Mundial

QampA

CFANigeriaclimateadvisersnet

QampA

CFANigeriaclimateadvisersnet