mitigation financing guidebook_1st draft

Guidebook on Financing Sources and their Application for Climate Change Mitigation

Actions in Development Countries

1st Draft

January 2012

Guidebook on Financing Options for Mitigation Actions in Developing Countries

Draft Final Report Page i December 2011

TABLE OF CONTENTS

EXECUTIVE SUMMARY ....................................................................................................................................... 1

BACKGROUND ........................................................................................................................................................... 1 OBJECTIVES ............................................................................................................................................................... 1 SUMMARY OF APPROACH ......................................................................................................................................... 1 SUMMARY OF FINANCING SOURCES ......................................................................................................................... 2 MAJOR FINDINGS ...................................................................................................................................................... 2

SECTION 1 ‐ INTRODUCTION ............................................................................................................................... 5

1.1 PROJECT BACKGROUND .................................................................................................................................. 5 1.2 OBJECTIVES ...................................................................................................................................................... 5 1.3 INFORMATION SOURCES ................................................................................................................................. 5 1.4 THE NEED FOR CLIMATE FINANCE ................................................................................................................... 6 1.5 CURRENT LANDSCAPE FOR CLIMATE FINANCE ................................................................................................ 6

1.5.1 Overview ................................................................................................................................................ 6 1.5.2 Multilateral and Bilateral Financing Sources ......................................................................................... 7 1.5.3 Private Financing Sources ...................................................................................................................... 8

1.6 TYPES OF FINANCING ....................................................................................................................................... 8 1.7 DETAILED INFORMATION ON FINANCING SOURCES........................................................................................ 9

SECTION 2 – MULTILATERAL AND BILATERAL FINANCING SOURCES .................................................................... 9

2.1 MULTILATERAL FINANCING SOURCES ............................................................................................................. 9 2.1.1 Introduction ........................................................................................................................................... 9 2.1.2 International Agencies ........................................................................................................................... 9 2.1.3 Multilateral Financial Institutions ........................................................................................................ 13

2.2 SPECIAL FUNDS FOR CLIMATE CHANGE MITIGATION .................................................................................... 16 2.2.1 Clean Technology Fund ........................................................................................................................ 16 2.2.2 Strategic Climate Fund ......................................................................................................................... 16 2.2.3 Global Energy Efficiency and Renewable Energy Fund (GEEREF) ......................................................... 17 2.2.4 Renewable Energy and Energy Efficiency Partnership (REEEP) ............................................................ 18 2.2.5 Other Special Climate Funds ................................................................................................................ 18

2.3 CARBON FUNDS ............................................................................................................................................. 20 2.4 BILATERAL FINANCING SOURCES ................................................................................................................... 22

2.4.1 Introduction ......................................................................................................................................... 22 2.4.2 Major BFIs ............................................................................................................................................ 22 2.4.3 Financing Approaches Used by BFIs ..................................................................................................... 23 2.4.4 Role of BFIs in Special Climate Funds ................................................................................................... 24 2.4.5 Examples of Leading BFIs ..................................................................................................................... 25

2.5 CHARACTERISTICS OF MULTILATERAL AND BILATERAL FINANCING SOURCES .............................................. 28 2.5.1 Geographic Focus ................................................................................................................................. 28 2.5.2 Focus on Technologies and Sectors ...................................................................................................... 32 2.5.3 Funding Sources ................................................................................................................................... 33 2.5.4 Financing Objectives ............................................................................................................................ 34 2.5.5 Financing Mechanisms ......................................................................................................................... 34 2.5.6 Management and Governance ............................................................................................................ 36

2.6 REQUIREMENTS OF FINANCING SOURCES ..................................................................................................... 38 2.6.1 Qualifying Projects/Programs .............................................................................................................. 38 2.6.2 Eligibility Conditions ............................................................................................................................. 38


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2.6.3 Project/Program Evaluation Criteria .................................................................................................... 38 2.6.4 Guidelines and Procedures for Fund Disbursement ............................................................................. 39 2.6.6 Measurement, Reporting and Verification Procedures ........................................................................ 39

SECTION 3 – PRIVATE FINANCING SOURCES FOR MITIGATION ACTIONS ............................................................. 42

3.1 OVERVIEW OF PRIVATE FINANCING .............................................................................................................. 42 3.1.1 Introduction ......................................................................................................................................... 42 3.1.2 Risk vs. Return Considerations ............................................................................................................. 42 3.1.3 Types of Private Sector Financing ........................................................................................................ 43 3.1.4 Debt Financing ..................................................................................................................................... 43 3.1.5 Equity Financing ................................................................................................................................... 44

3.2 DEBT FINANCING FROM BANKS AND FINANCIAL INSTITUTIONS ................................................................... 45 3.3 PRIVATE FINANCING SOURCES FOR MITIGATION FINANCE ........................................................................... 46

3.3.1 Introduction ......................................................................................................................................... 46 3.3.2 Special Private Sector Funds ................................................................................................................ 48 3.3.3 Venture Capital and Private Equity Funds ........................................................................................... 49 3.3.4 Pension Funds ...................................................................................................................................... 51 3.3.5 Other Private Sector Financing Sources ............................................................................................... 52

3.4 PRIVATE SECTOR CARBON FINANCE .............................................................................................................. 54

SECTION 4 – PUBLIC‐PRIVATE PARTNERSHIPS FOR FINANCING MITIGATION ACTIONS ........................................ 57

4.1 PUBLIC‐PRIVATE PARTNERSHIPS ................................................................................................................... 57 4.2 PPPS FOR FINANCING CLIMATE CHANGE MITIGATION ..................................................................................... 57 4.3 PPPS IN ENERGY EFFICIENCY FINANCING ....................................................................................................... 58 4.4 LEVERAGING PRIVATE CAPITAL THROUGH PPPS ............................................................................................ 59 4.5 BONDS AND DEBT PRODUCTS ....................................................................................................................... 60 4.6 OTHER EXAMPLES OF PPPS ............................................................................................................................ 61

4.6.1 Special Funds for Climate Change Mitigation ...................................................................................... 61 4.6.2 Carbon Funds ....................................................................................................................................... 62 4.6.3 Private Sector Funds ............................................................................................................................ 62

SECTION 5 ‐ KEY ELEMENTS OF PROJECT PROPOSALS AND GUIDELINES FOR PREPARATION ............................... 65

5.1 OVERVIEW ..................................................................................................................................................... 65 5.2 KEY ELEMENTS OF PROJECT PROPOSALS ....................................................................................................... 65

5.2.1 Proposals to MFIs and BFIs .................................................................................................................. 65 5.2.2 General Proposal Requirements .......................................................................................................... 66 5.2.3 Illustrative Detailed Requirements ‐ GEF PIF ........................................................................................ 66

5.3 EVALUATION OF THE FINANCING PROPOSALS .............................................................................................. 68 5.4 DEVELOPMENT OF THE BASELINE .................................................................................................................. 68 5.5 RISK ASSESSMENT .......................................................................................................................................... 70 5.6 JUSTIFYING THE FINANCING NEED ................................................................................................................ 71

SECTION 6 – CONCLUDING REMARKS ................................................................................................................ 74

6.1 SUMMARY OF FINANCING SOURCES ............................................................................................................. 74 6.2 SUMMARY OF THE PROPOSAL REQUIREMENTS OF DIFFERENT FINANCING SOURCES .................................. 74 6.3 SUMMARY OF GUIDELINES FOR POTENTIAL APPLICANTS ............................................................................. 75

APPENDIX I – ABBREVIATIONS AND ACRONYMS ................................................................................................ 77

APPENDIX II ‐ DETAILED INMFORMATION ON FINANCING SOURCES .................................................................. 80

A. MULTILATERAL FINANCING SOURCES ........................................................................................................ 7

A.1 MULTILATERAL FINANCIAL INSTITUTIONS (MFI) .................................................................................... 7


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ADB CLEAN ENERGY FINANCING PARTNERSHIP FACILITY (CEFPF) .......................................................................................... 8 ADB ENERGY EFFICIENCY INITIATIVE (EEI) ........................................................................................................................ 10 ADB ENERGY FOR ALL INITIATIVE .................................................................................................................................... 12 AFDB CONGO BASIN ECOSYSTEMS CONSERVATION SUPORT PROGRAM (PACEBCO) ............................................................... 15 CARIBBEAN CATASTROPHE RISK INSURANCE FACILITY .......................................................................................................... 19 CENTRAL AMERICAN BANK FOR ECONOMIC INTEGRATION (CABEI) ....................................................................................... 21 CLEAN ENERGY FOR DEVELOPMENT INVESTMENT FRAMEWORK ............................................................................................ 24 CLIMATE AND DEVELOPMENT KNOWLEDGE NETWORK ........................................................................................................ 26 CLIMATE FINANCE INNOVATION FACILITY (CFIF) ................................................................................................................ 30 EAST AFRICAN DEVELOPMENT BANK (EADB) ................................................................................................................... 33 EBRD (EUROPEAN BANK FOR RECONSTRUCTION AND DEVELOPMENT) CLIMATE CHANGE FINANCE ............................................. 36 EIB (EUROPEAN INVESTMENT BANK) ............................................................................................................................... 39 EIB CLIMATE CHANGE TECHNICAL ASSISTANCE FACILITY ...................................................................................................... 45 END‐USER FINANCE FOR ACCESS TO CLEAN ENERGY TECHNOLOGIES IN SOUTH AND SOUTH‐EAST ASIA (FACET) ........................... 47 GEF (GLOBAL ENVIRONMENT FACILITY) CLIMATE CHANGE TRUST FUND ................................................................................ 50 GEF SMALL GRANTS PROGRAMME ................................................................................................................................. 55 GLOBAL CLIMATE CHANGE ALLIANCE (GCCA) ................................................................................................................... 59 IDB ‐ SUSTAINABLE ENERGY AND CLIMATE CHANGE INITIATIVE (SECCI) ................................................................................ 63 IFC PARTIAL CREDIT GUARANTEES .................................................................................................................................. 65 IFC RISK SHARING FACILITY ........................................................................................................................................... 67 IFC SECURITIZATIONS ................................................................................................................................................... 69 INTERNATIONAL TROPICAL TIMBER ORGANIZATION (ITTO) .................................................................................................. 71 LATIN AMERICAN CARBON, CLEAN AND ALTERNATIVE ENERGIES PROGRAMME (PLAC+E) ......................................................... 74 PARTNERSHIP FOR MARKET READINESS (PMR) ................................................................................................................. 77 PLANET BANKING PROGRAM .......................................................................................................................................... 79 PRIVATE FINANCING ADVISORY NETWORK (PFAN) ............................................................................................................ 81 SUSTAINABLE TRANSPORT INITIATIVE ............................................................................................................................... 84 UNDP GREEN COMMODITIES FACILITY ............................................................................................................................ 86 UNEP GREEN ECONOMY INITIATIVE (GEI) ....................................................................................................................... 88 UNEP RENEWABLE ENERGY ENTERPRISE DEVELOPMENT (REED) ......................................................................................... 90 UN‐REDD PROGRAM (REDUCED EMISSIONS FROM DEFORESTATION AND FOREST DEGRADATION) ............................................. 93 WORLD BANK ‐ ASIA SUSTAINABLE AND ALTERNATIVE ENERGY PROGRAM (ASTAE) ................................................................ 97 WORLD BANK ‐ ENERGY SECTOR MANAGEMENT ASSISTANCE PROGRAM (ESMAP) ................................................................. 99 WORLD BANK GREEN BONDS ....................................................................................................................................... 102 WORLD BANK GROUP CATASTROPHIC RISK MANAGEMENT ............................................................................................... 105 WORLD BANK ‐ INTERNATIONAL DEVELOPMENT ASSOCIATION (IDA) .................................................................................. 108 WORLD BANK/IREDA ‐ INDIAN RENEWABLE ENERGY DEVELOPMENT AGENCY LOAN PROGRAM .......................................... 111 WORLD BANK ‐ MULTILATERAL INVESTMENT GUARANTEE AGENCY ..................................................................................... 114

A.2 – SPECIAL CLIMATE FUNDS ........................................................................................................................ 120

ADB CLEAN ENERGY PRIVATE EQUITY INVESTMENT FUNDS ............................................................................................... 121 ADB CLIMATE CHANGE FUND (CCF) ............................................................................................................................. 123 AFDB CONGO BASIN FOREST FUND .............................................................................................................................. 126 AFDB SUSTAINABLE ENERGY FUND FOR AFRICA (SEFA) ................................................................................................... 129 BNDES AMAZON FUND ............................................................................................................................................. 131 BULGARIA ENERGY EFFICIENCY FUND (BEEF) .................................................................................................................. 136 CARIBBEAN DEVELOPMENT BANK (CDB) ‐ SPECIAL DEVELOPMENT FUND ............................................................................ 139 CLEAN TECHNOLOGY FUND (CTF) ................................................................................................................................. 143 CLIMDEV‐AFRICA SPECIAL FUND (CDSF) ....................................................................................................................... 146 E+CO CAREC FUND .................................................................................................................................................... 149 FOREST INVESTMENT PROGRAM (FIP) ........................................................................................................................... 152 GEF ‐ LEAST DEVELOPED COUNTRIES FUND (LDCF) ......................................................................................................... 157 GLOBAL FACILITY FOR DISASTER REDUCTION AND RECOVERY (GFDRR)................................................................................ 159


Draft Final Report Page iv December 2011

GLOBAL ENERGY EFFICIENCY AND RENEWABLE ENERGY FUND (GEEREF) ............................................................................. 163 GREEN CLIMATE FUND (GCF) ...................................................................................................................................... 167 IDB ‐ INFRASTRUCTURE FUND (INFRAFUND) ................................................................................................................... 169 IDB GROUP ‐ MULTILATERAL INVESTMENT FUND (MIF) ................................................................................................... 171 IDB REGIONAL FUND OF AGRICULTURAL TECHNOLOGY (FONTAGRO) ............................................................................... 174 IMF ‐ GREEN FUND ................................................................................................................................................... 177 INDONESIA CLIMATE CHANGE TRUST FUND ..................................................................................................................... 179 MEDITERRANEAN INVESTMENT FACILITY (MIF) ............................................................................................................... 183 NORDIC DEVELOPMENT FUND ...................................................................................................................................... 186 PILOT PROGRAM FOR CLIMATE RESILIENCE (PPCR) .......................................................................................................... 189 RENEWABLE ENERGY AND ENERGY EFFICIENCY PARTNERSHIP (REEEP) ................................................................................ 192 SCALING‐UP RENEWABLE ENERGY PROGRAM FOR LOW‐INCOME COUNTRIES (SREP) ............................................................. 194 SPECIAL CLIMATE CHANGE FUND (SCCF) ....................................................................................................................... 198 SEED CAPITAL ASSISTANCE FACILITY (SCAF) ................................................................................................................... 201 UNDP/SPAIN MDG ACHIEVEMENT FUND ..................................................................................................................... 205

A.3 CARBON FUNDS ................................................................................................................................. 208

ADB ASIA PACIFIC CARBON FUND (APCF) AND FUTURE CARBON FUND (FCF) ..................................................................... 209 ADB CARBON MARKET INITIATIVE (CMI)....................................................................................................................... 213 AFDB AFRICAN CARBON SUPPORT PROGRAM (ACSP) ..................................................................................................... 215 AFRICAN CARBON ASSET DEVELOPMENT FACILITY (ACAD) ................................................................................................ 218 CARBON FINANCE FOR AGRICULTURE, SILVICULTURE, CONSERVATION, AND ACTION AGAINST DEFORESTATION ............................ 223 EIB‐KFW CARBON PROGRAM II ................................................................................................................................... 225 EIB POST‐2012 CARBON CREDIT FUND ......................................................................................................................... 228 FOREST CARBON PARTNERSHIP FACILITY (FCPF) .............................................................................................................. 230 MULTILATERAL CARBON CREDIT FUND (MCCF) .............................................................................................................. 234 UNDP/MDG CARBON FACILITY .................................................................................................................................. 238 WORLD BANK CARBON FUNDS AND FACILITIES ................................................................................................................ 241 WORLD BANK CARBON PARTNERSHIP FACILITY (CPF) ....................................................................................................... 243

B. BILATERAL FINANCING SOURCES ............................................................................................................ 246

AFD – FRENCH DEVELOPMENT AGENCY ......................................................................................................................... 247 AUSAID ‐ COMMUNITY BASED CLIMATE CHANGE ACTION GRANTS ..................................................................................... 252 AUSTRIAN DEVELOPMENT COOPERATION (ADC) ENERGY AND ENVIRONMENT PARTNERSHIP PROGRAM .................................... 259 DANIDA (DANISH INTERNATIONAL DEVELOPMENT AGENCY) ............................................................................................ 265 GUYANA REDD + INVESTMENT FUND (GRIF) ................................................................................................................. 268 INTERNATIONAL CLIMATE FUND (FORMERLY ETF‐IW) ...................................................................................................... 271 INTERNATIONAL CLIMATE INITIATIVE (GERMANY) ............................................................................................................. 275 INTERNATIONAL FOREST CARBON INITIATIVE (IFCI) .......................................................................................................... 278 JAPAN BANK FOR INTERNATIONAL DEVELOPMENT (JBIC) .................................................................................................. 281 JICA ‐ JAPAN’S FAST START FINANCE ............................................................................................................................. 284 JAPAN ‐ THE HATOYAMA INITIATIVE (JAPAN) ................................................................................................................. 286 KFW ‐ KREDITANSTALT FUR WIEDERAUFBAU ................................................................................................................... 289 KFW CHILE ‐ CORFO CREDIT LINE PROGRAM ............................................................................................................... 292 KFW ‐ FUND SOLUTIONS FOR CLIMATE FINANCE.............................................................................................................. 294 OPIC ‐ OVERSEAS PRIVATE INVESTMENT CORPORATION ................................................................................................... 297 USAID – GLOBAL CLIMATE CHANGE INITIATIVE............................................................................................................... 301

C. PRIVATE FINANCING SOURCES ............................................................................................................... 304

AFRICA ENTERPRISE CHALLENGE FUND: RENEWABLE ENERGY & ADAPTATION TO CLIMATE TECHNOLOGIES ................................. 305 ATP PENSION FUND ................................................................................................................................................... 308 CALIFORNIA PUBLIC EMPLOYEES’ RETIREMENT SYSTEM (CALPERS) ..................................................................................... 310 CAPITAL MARKET CLIMATE INITIATIVE (CMCI) ................................................................................................................ 313


Draft Final Report Page v December 2011

CHINA ENVIRONMENT FUND (CEF) ............................................................................................................................... 315 FIDEME AND EUROFIDEME 2 .................................................................................................................................. 317 FE CLEAN ENERGY GROUP INC. .................................................................................................................................... 320 INSTITUTIONAL INVESTORS GROUP ON CLIMATE CHANGE (IIGCC) ...................................................................................... 322 INVESTOR NETWORK ON CLIMATE RISK (MANAGED BY CERES) ........................................................................................... 324 INVESTOR GROUP ON CLIMATE CHANGE AUSTRALIA/NEW ZEALAND (IGCC) ........................................................................ 326 LONG‐TERM INVESTORS CLUB ...................................................................................................................................... 329 MMA RENEWABLE VENTURES (MMARV) .................................................................................................................... 331 NEFCO CARBON FINANCE FUND .................................................................................................................................. 333 PGGM (THE PENSION FUND FOR THE DUTCH HEALTHCARE SECTOR) ................................................................................... 336 P8 GROUP ............................................................................................................................................................... 338 X PRIZE – ENERGY AND ENVIRONMENT PRIZE GROUP ....................................................................................................... 340

APPENDIX III – GUIDANCE AND TEMPLATE FOR PREPARING GOOD PROPOSALS TO FUNDING SOURCES .............. 7


Draft Final Report Page 1 December 2011

EXECUTIVE SUMMARY

BACKGROUND This Guidebook has been prepared by the UNEP Risoe Centre (URC) as a part of its Technology Needs Assessment (TNA) project, which represents activities in developing countries to identify national mitigation and adaptation technology priorities and to develop Technology Action Plans (TAPs) for mitigation of GHG emissions. The countries participating in the TNA project need to have sufficient knowledge of the broad spectrum of potential financing sources for mitigation projects and the eligibility criteria and information requirements required by such sources. This Guidebook has been prepared to provide information on financing sources that are likely to be relevant for providing needed resources to implement the TAPs.

OBJECTIVES The objective of this Guidebook is to provide information to help TNA countries better identify and access financial resources for mitigation projects included in their national TAPs. The primary emphasis is on multilateral and bilateral sources of financing; but the guidebook also includes an overview of private funding sources and public-private partnerships (PPPs).

Given the very different financial needs and strategies associated with mitigation vis-à-vis adaptation, the guidebook exclusively discusses financing for mitigation actions in developing countries. As the international negotiations on post-2012 are still going on and the financing arrangements for developing countries are still evolving, this guidebook focuses primarily on existing financing options.

The target audience for the Guidebook is national experts/consultants within the country TNA teams that consist of a broad range of stakeholders from government institutions, non-government organizations, local banks and financial institutions, and the private sector.

SUMMARY OF APPROACH This Guidebook was developed primarily by desk research using a wide range of information sources. These included databases on financing sources such as the World Bank/UNDP Climate Finance Options Database, the Overseas Development Institute’s Climate Funds Update, and the World Bank’s Report on Green Infrastructure Finance. In addition a large number of reports on climate finance were reviewed to identify financing sources relevant to climate change mitigation.

Information on the financing sources was compiled in a standard format and reviewed and analyzed to categorize the financing sources. For the multilateral and bilateral financing sources, the available information was used to define their major characteristics (such as geographic focus, technology/sector focus, funding sources, financing objectives, financing mechanisms, and management and governance). In addition, the requirements of these financing sources for the preparation of the proposals were defined.

The project also included a review of available information on private financing sources and public-private partnerships (PPPs) for financing mitigation projects.



SUMMARY OF FINANCING SOURCES The major sources of financing for climate change mitigation projects include multilateral, bilateral and private financing sources.

Multilateral financing sources include multilateral development banks (MDBs), such as the World Bank; agencies of the United Nations, such as UNDP and UNEP; and special international agencies created by these MDBs (such as the Global Environment Facility) in collaboration with various national governments; (which are together referred herein to as multilateral financial institutions or MFIs). The MFIs have established a number of special funds for climate change mitigation, such as the Climate Investment Funds (CIFs) administered by the World Bank – the Clean Technology Fund (CTF) and the Strategic Climate Fund. In addition, the MFIs have established a number of Carbon Funds to facilitate the sale of the certified emission reduction (CER) credits from mitigation projects.

Bilateral financing institutions (BFIs) are created and directed by a national government for the purpose of giving aid or investing in targeted development projects and programs in developing countries and emerging markets. BFIs carry out the mandates given to them by the national governments which are based on the strategic objectives of the governments and their focus on specific geographic areas and technologies.

Private financing sources, which are increasingly being involved in financing climate change mitigation projects, include a wide range of local and international banks and financial institutions, venture capital and private equity funds, pension funds and some special funds created to address climate change mitigation. Private financing sources also include carbon finance companies.

Many of the public (multilateral and bilateral) financing sources seek to leverage increased financing from private sources. To accomplish this, a number of public-private partnerships have been established. PPPs are designed to leverage private flows to fill funding gaps, transfer service delivery risks, and improve the cost effectiveness of service delivery.

MAJOR FINDINGS The major findings of this Guidebook are summarized below:

• The number of financing sources (multilateral, bilateral and private) is very large. This Guidebook has identified over 100 sources.

• These sources finance a wide range of mitigation projects in developing countries worldwide. The total amount of mitigation financing in 2009-2010 was about US$ 92.5 billion.

• While all these sources are designed to finance climate change mitigation projects, there are differences in their specific objectives, target geographic areas, technology and sector focus, financing mechanisms used, and proposal requirements. Most financing sources address a wide range of mitigation technologies, the most common being renewable energy and energy efficiency. Some of the sources are more narrowly focused, such as on forestry.

• One of the most important financing sources is the Global Environment Facility (GEF), established in 1991 as the financing arm of the United Nations Framework Convention



for Climate Change. GEF works closely with 10 partner MFIs and provides grant financing for a large number of mitigation projects in developing countries. GEF has also established a number of special funds for mitigation.

• Many mitigation financing initiatives have been undertaken by the MDBs and UN agencies, who also act as implementing agencies for GEF. These MFIs have also created a number of special funds for financing climate change mitigation projects.

• BFIs have been very active in mitigation financing. Some of the largest BFIs, such as JICA, KfW, and AfD have large programs for mitigation financing and work in as many as 100 countries.

• Private financing sources are playing an important role in mitigation financing. A lager amount of private financing for mitigation projects is already being deployed as debt financing from local banks and financial institutions. Other forms of financing are becoming available, from venture and equity funds, pension funds and special private funds targeted at mitigation finance.

• Many carbon funds have been created by MFIs to help monetize the GHG savings from mitigation projects. There are also a number of private carbon finance companies. However, the total amount of financing provided from carbon credits is small relative to the other financing sources.

• The specific proposal requirements of the financing sources vary, but in general, they require certain basic information on the proposed project or program. The general proposal requirements and the main elements of a proposal for mitigation financing are common and have been identified in this Guidebook.

• This Guidebook will be useful in helping a country interested in developing a proposal for climate change mitigation financing to identify the potential financing sources and get a general idea of their characteristics and requirements. It is recommended that additional source-specific information be identified to understand the specific proposal requirements and the evaluation process and criteria that will be used to make the funding decision. It will also be useful to look at prior proposals funded by the specific source to understand how to develop some of the needed information such as definition of the baseline and risk assessment and management.



SECTION 1 INTRODUCTION



SECTION 1 - INTRODUCTION

1.1 PROJECT BACKGROUND The UNEP Risoe Centre (URC) is implementing a Technology Needs Assessment (TNA) project as a part of the Strategic Program on Technology Transfer supported by the Global Environment Facility (GEF). The TNA project represents activities in developing countries to identify national mitigation and adaptation technology priorities and to develop Technology Action Plans (TAPs) defining the evolving needs for equipment, techniques, practical knowledge, and skills necessary to mitigate GHG emissions and to reduce their vulnerability to the adverse impacts of climate change. In order to meet these objectives, the TNA countries need to have sufficient knowledge of the broad spectrum of potential financing sources both for mitigation and adaptation projects, and the eligibility criteria and information requirements required by such sources. This Guidebook on financing options for climate change mitigation projects has been prepared by the UNEP Risoe Centre to provide information on financing sources that are likely to be relevant for providing needed resources to implement the country developing TAPs.

1.2 OBJECTIVES The objective of this Guidebook is to provide information to help TNA countries better identify and access financial resources for implementation of their national TAPs. The primary emphasis is on multilateral and bilateral sources of financing; but the guidebook also includes an overview of private funding sources and public-private partnerships (PPPs).

Given the very different financial needs and strategies associated with mitigation vis-à-vis adaptation, the guidebook exclusively discusses financing for mitigation actions in developing countries. As the international negotiations on post-2012 are still going on and the financing arrangements for developing countries are still evolving, this guidebook focuses primarily on existing financing options. Brief explanations of potential future financing arrangements are included where appropriate.

The target audience for the Guidebook is national experts/consultants within the country TNA teams that consist of a broad range of stakeholders from government institutions, non-government organizations, local banks and financial institutions, and the private sector. The guidebook is intended to be an essential source of information on financing sources for climate change mitigation actions/projects for these experts /consultants.

1.3 INFORMATION SOURCES

This Guidebook was developed using a wide range of information sources. These included databases on financing sources such as the World Bank/UNDP Climate Finance Options database,1 the Overseas Development Institute’s Climate Funds Update,2 and the World Bank’s

1 World bank/UNDP, http://www.climatefinanceoptions.org/cfo/index.php 2 Overseas Development Institute, http://www.climatefundsupdate.org



Report on Green Infrastructure Finance.3 In addition a large number of reports on climate finance were reviewed to identify financing sources relevant to climate change mitigation.4

1.4 THE NEED FOR CLIMATE FINANCE The Intergovernmental Panel on Climate Change (IPCC)5 and the Stern Review6 pointed out in 2007 that investments in climate change mitigation are well below the likely costs of no action to combat climate change. The United Nations Framework Convention on Climate Change (UNFCCC) has estimated that global additional investment and financial flows of USD 200 – 210 billion annually will be necessary by 2030 to return global greenhouse gas (GHG) emissions to current levels.7

At the United Nations Climate Change Conference in Copenhagen in 2009, government leaders from developed and developing nations emphasized their strong political will to urgently combat climate change in accordance with the principle of common but differentiated responsibilities and respective capabilities. It was emphasized that scaled-up, new and additional, predictable and adequate funding, as well as improved access to financing, was needed for the developing countries, and in the context of meaningful mitigation actions and transparency on implementation, developed countries committed themselves to a goal of jointly mobilizing an additional US$100 billion a year by 2020 to address the needs of developing countries.8

The Secretary-General of the United Nations established the High-level Advisory Group on Climate Change Financing in February 2010. The Advisory Group concluded that it is challenging but feasible to meet this goal, by accessing funding from a wide variety of sources, public and private, bilateral and multilateral, including alternative sources of finance, the scaling up of existing sources and increased private flows.9

These and other studies have pointed out that a large part of the needed financing is for developing countries that do not have adequate internal resources to meet these needs. Therefore multilateral and bilateral financing is needed as well as mechanisms for leveraging private financing.

1.5 CURRENT LANDSCAPE FOR CLIMATE FINANCE

1.5.1 Overview A recent study by the Climate Policy Initiative (CPI) estimated the current finance flow for climate change mitigation and adaptation. This project assessed the current status of the climate finance landscape, mapping its magnitude and nature along the life cycle of finance flows, i.e. the sources of finance, intermediaries involved in distribution, financial instruments, and final uses. The information was compiled from a wide range of sources, from international

3 The World Bank, Research Report on Leading Initiatives and Literature Related to Green Infrastructure Finance,

August 2011. 4 See Bibliography. 5 IPCC, Climate Change 2007, Mitigation Summary for Policy-Makers, 200, www.ipcc.ch 6 Stern, N., The Economic of Climate Change: The Stern Review, Cambridge, 2006. 7 UNFCCC, Investment and Financial Flows to address Climate Change, October 2007 8 Germanwatch and Wuppertal Institute, Funding Sources for International Climate Policy, March 2009. 9 United Nations, Report of the Secretary-General’s High-level Advisory Group on Climate Change Financing,

5 November 2010



organizations like the OECD, to private sector sources like Bloomberg NEF, as well as NGOs like the Overseas development Institute (ODI).

The study estimated that the total amount of financing in 2009/2010 to support low-carbon, climate-friendly development activities was about USD 97 billion per annum.10 The vast majority of this amount (about 95% or USD 92.5 billion) was for mitigation activities with only a small percentage (5%) devoted to adaptation. The sources of financing are summarized in Table 1.1 below:

Table 1.1 – Financing of Mitigation Activities, 2009-201011

FINANCING SOURCE AMOUNT (Million USD) % OF TOTAL

Multilateral Financial Institutions 13,886 15.0%

Bilateral Financial Institutions 19,127 20.7%

Dedicated Climate Funds 2,428 2.6%

Carbon Offsets 2,250 2.4%

Philanthropy 240 0.3%

Private Financing Sources 54,600 59.0%

Total 92,531 100.0%

Source: Climate Policy initiative, The Landscape of Climate Finance, Venice, October 2011

1.5.2 Multilateral and Bilateral Financing Sources As seen in table 1.1, the largest proportion of mitigation financing is provided by bilateral financial institutions or BFIs (20.7%), with multilateral financial institutions (MFIs) in second place (15%). These international financial institutions IFIs provide a wide range of funding for mitigation actions, generally through national government agencies or development banks rather than direct financing to end users. The types of financing include grants, concessional loans, market rate loans, and loan guarantees, with a very small amount of equity financing (through specially created equity funds). Table 1.2 lists the major MFI and BFI sources.

Some of the IFIs have created dedicated climate funds that provide a small portion (2.6%) of the financing. Carbon finance, mostly through the CDM and JI mechanisms contributes only about 2.4% of the total.

10 Climate Policy initiative, The Landscape of Climate Finance, Venice, October 2011 11 While the total amount of 92.5 billion USD shown in Table 1.1 (or the 97.0 billion USD including adaptation)

compares favorably with the USD 100 billion committed at the Copenhagen Summit, it should be noted that much of this amount represents funding already available prior to Copenhagen and that the Summit pointed out the need for additional $100 billion.



In addition, the MFIs and BFIs have established a number of special funds that provide financing for mitigation projects. Examples include the Renewable Energy and Energy Efficiency Partnership (REEEP), Global Energy Efficiency and Renewable Energy Fund (GEEREF), the World Bank Carbon Finance Facility (Carbon Fund), Climate Technology Fund (CTF), Seed Capital Assistance Facility (SCAF), ADB Climate Change Fund (CCF), etc.

Table 1.2 – Illustrative Multilateral and Bilateral Financing Sources

MULTILATERAL FINANCING SOURCES BILATERAL FINANCING SOURCES

Global Environment Facility (GEF)

The World Bank

European Bank for Reconstruction and Development (EBRD)

Asian Development Bank (ADB)

European Investment Bank (EIB)

African Development Bank (AfDB)

United Nations Development Program (UNDP)

United Nations Environment Program (UNEP)

Inter-American Development Bank (IDB)

International Finance Corporation (IFC)

Nordic Environment Development Fund

Kreditanstalt fur Wiederaufbau (KfW)

Agence Francaise du Developpement (AfD)

Japan International Cooperation Agency (JICA)

International Climate Initiative (Germany)

Norwegian Agency for development Cooperation

Danish International Development Agency (DANIDA)

Swedish International Development Agency (SIDA)

Canadian International development Agency (CIDA)

Department of International Development (DfID)

Australian Aid Agency (AusAID)

Section 2 of this report discusses multilateral and bilateral financing sources including the special funds.

1.5.3 Private Financing Sources The largest amount of financing is from private sources, such as local banks and financial institutions (public and private). Most of this is in the form of debt (corporate finance, project financing, mezzanine financing, or refinancing) with some amount as project equity financing. Many of the financing programs designed by the MFIs and BFIs focus on leveraging private debt and equity capital for mitigation project financing.

Private financing also includes venture capital funds, private equity funds, infrastructure funds, private carbon funds, and pension funds.

Section 3 of this report discusses the characteristics of private financing sources and presents some case studies of private financing of mitigation projects.

1.6 TYPES OF FINANCING As indicated above, the different financing sources provide different types of financing. Table 1.3 provides an illustrative overview of the various types of financing and the organizations that typically provide such financing.



Table 1.3 – Types of Financing Provided by Various Financing Sources

Type of Financing Typically Provided By

Grants MFIs, BFIs, Climate Funds

Subsidies MFIs, BFIs, Climate Funds

Concessional Loans MFIs, BFIs, Climate Funds

Market Rate Loans MFIs, BFIs, Climate, Banks/FIs

Loan or Credit Guarantees MFIs, BFIs, Climate Funds

Carbon Credit Revenues MFIs, Climate Funds, Private Carbon Funds

Corporate Loans Banks/FIs

Project Debt Financing Banks/FIs, Climate Funds, Venture Funds, Infrastructure Funds, Equity Funds

Mezzanine Financing Banks/FIs, Venture Funds, Pension Funds

Re-Financing Banks/FIs, Venture Funds, Equity Funds, Pension Funds

Project Equity Financing Banks/FIs, Climate Funds, Venture Funds, Equity Funds

Corporate Equity Venture Funds, Equity Funds, MFIs (e.g. IFC)

1.7 DETAILED INFORMATION ON FINANCING SOURCES Appendix II of this report contains detailed information on multilateral, bilateral and private financing sources. The information is organized in a standard format and provides the following (where available):

• Name of Financing Source • Sponsoring Organization • Address • Key Contact • Objectives • Region/Country Focus • Sector Focus • Technology Focus • Type of Funding Support • Management/Governance

• Proposal/Application Requirements • Eligibility Criteria • Proposal evaluation Criteria • When and How to Apply • Procedures for Fund Disbursement • Size of Funding Source • Funding Limit for Individual

Projects • Monitoring/Evaluation Procedures • Sources for Further Information



SECTION 2

MULTILATERAL AND BILATERAL FINANCING SOURCES



SECTION 2 – MULTILATERAL AND BILATERAL FINANCING SOURCES

2.1 MULTILATERAL FINANCING SOURCES

2.1.1 Introduction Multilateral financing sources include multilateral development banks (MDBs), special international agencies created by these MDBs (such as the Global Environment Facility) in collaboration with various national governments, and multilateral funds (which are together referred herein to as multilateral financial institutions or MFIs). The MFIs have multiple governing members, including both borrowing developing countries and developed donor countries, and raise funds from a variety sources, including capitalization from governments and borrowing programs, as well as income from loans. MFIs provide financial support and technical assistance for economic and social development activities in developing countries.

This Section first provides an overview of international agencies, followed by MDBs and the special funds.

2.1.2 International Agencies The two major international agencies providing financing for climate change mitigation actions are the United Nations (UN) and the Global Environment Facility (GEF),12 which was created as the financing arm of the United Nations Framework Convention for Climate Change or UNFCCC13. Various agencies of the UN are active in mitigation financing. These include the United Nations Development Program (UNDP),14 the UN Environment Program (UNEP),15 UN Foundation (UNF),16 UN-REDD Program (Reduced Emissions from Deforestation and Forest Degradation),17 and the UNFCCC. These agencies have created a number of special funds which are discussed in the section on Special Climate Funds below.

2.1.2.1 The Global Environment Facility (GEF) GEF was established in 1991 and has the longest track record of financing climate change mitigation and adaptation programs and projects. The funding for GEF in its Fourth Cycle (2006-2010), provided by 39 countries, amounted to USD 1 billion. The current GEF funding cycle (Fifth Replenishment) has commitments of USD 889 million.18

The GEF partnership includes 10 agencies: the UN Development Program; the UN Environment Program; the World Bank; the UN Food and Agriculture Organization; the UN Industrial Development Organization; the African Development Bank; the Asian Development Bank; the European Bank for Reconstruction and Development; the Inter-American Development Bank; and the International Fund for Agricultural Development.

12 Global Environment Facility, www.thegef.org 13 UNFCCC www.unfccc.org 14 United Nations Development Program, www.undp.org 15 United Nations Environment Program, www.unep.org 16 United Nations Foundation, www.unf.org 17 UN-REDD, www.un-redd.org 18 Overseas Development Institute, Climate Finance Fundamentals: The Evolving Global Climate Finance

Architecture, November 2011.



In the current cycle, the GEF has the following major Focus Areas:19

• Biodiversity • Climate Change (Mitigation and Adaptation) • Chemicals • International Waters • Land Degradation • Sustainable Forest Management • Ozone Layer Depletion

It should be noted that since 2004 97% of GEF financing has been devoted to climate change mitigation.20

The GEF also works on several cross-cutting issue and programs, including Results & Learning, Earth Fund and Public Private Partnerships, Capacity Development, Small Grants Program, and Country Support Program. The GEF generally works in collaboration with an implementation agency (such as, for example, The World Bank, UNDP, or EBRD) and funds grants to developing countries for climate-related projects. The criteria used by the GEF for project financing are shown in Box 1.

The GEF projects are developed by host countries in cooperation with one or more of the 10 GEF Agencies. An application can be made by submitting a Project Identification Form (PIF) to the GEF secretariat through a GEF Agency with an endorsement letter of the Operational Focal Point of the host country. Additional information on GEF financing is provided in Appendix II.

2.1.2.4 The UNFCCC Clean Development Mechanism (CDM)

The Kyoto Protocol of the U.N. Framework Convention on Climate Change includes provisions for a Clean Development Mechanism (CDM), which gives monetary value to GHG reduction credits (known as certified emission reductions or CERs) achieved through projects implemented in developing countries.21 These CERs can be sold to buyers in developed countries interested in 19 Global Environment Facility, GEF-5 Focal Area Strategies, January 2011 20 Overseas Development Institute, Climate Finance Fundamentals: Mitigation Finance, November 2011. 21 World Bank, Carbon Finance, Project Cycle, http://go.worldbank.org/P3OAVIT6Q0

Box 1 – GEF Project Eligibility Criteria • Undertaken in an eligible country consistent with national priorities

and programs. • Addresses one or more of the GEF Focal Areas, improving the

global environment, or advance the prospect of reducing risks to it. • Consistent with the GEF operational strategy. • Seeks GEF financing only for the agreed-on incremental costs on

measures to achieve global environmental benefits • Involves the public in project design and implementation • Is endorsed by the government(s) of the country/ies in which it will

be implemented Source: Global Environment Facility, GEF-5 Focal Area Strategies, January

2011



meeting their compliance requirements for meeting carbon reduction targets cost-effectively. CDM creates a market mechanism, for trading of CERS under cap and trade systems (such as the EU Emissions Trading System).22 Figure 2.1 illustrates the CDM.

Figure 2.1 – CER Trading Under the Clean Development Mechanism

Source: El Khamlichi, Samira, Leveraging Energy Efficiency Actions with Carbon

Finance. The World Bank, 2010

By October 2011, a total of 3,497 CDM projects were registered: 2,862 in Asia and the Pacific, 553 in Latin America and the Caribbean, 71 in Africa, and 14 in Eastern Europe. Emerging economies have been the primary beneficiaries of the CDM, and these CDM projects are expected to produce some 1.5 billion tons of carbon dioxide equivalent (CO2e) in emission reductions. The economic benefits of carbon finance under CDM can be quite large and it has been estimated that carbon finance in 2009/2010 was about USD 2.2 billion.23

CDM projects must qualify through a rigorous public registration and issuance process designed to ensure real, measurable, and verifiable emission reductions that are additional to what would have occurred without the project. The mechanism is overseen by the CDM Executive Board. In order to be considered for registration, a project must first be approved by the designated national authority for the country. To apply for CERs, a mitigation project must apply a “baseline and monitoring methodology” that has been preapproved by the CDM Executive Board at the UNFCCC. 24 An illustration of the CDM project cycle is provided in Box 2.

Recently, UNFCCC approved the concept of programmatic CDM, also known as Program of Activities (PoA), which can combine several small projects (also called CPA) in a spatial and temporal (up to 28 years) scale without defining more than one CPA in the beginning.25 This

22 EU Emissions Trading System, Application of the Emissions Trading Directive to EU Member States, Technical

Report 2008-13, www.eea.europa.eu 23 Climate Policy initiative, The Landscape of Climate Finance, Venice, October 2011 24 A description of the process and a listing of the approved methodologies can be found on the UNFCCC CDM web

site, 25 UNEP, A Primer of CDM Programme of Activities, UNEP Risø Centre on Energy, Climate and Sustainable

Development, 2009

Industrialized country with an emissions cap

Baseline emissions

Baseline Scenario

Developing country/economy in

transition with no emissions cap

EmissionReductions (ERs)

Project em

issions

Project Scenario

Emissions target

Purchase of allowances

Developing country/economy in transition benefits from technology

and financial flows

ER

Purchase of ERs

Domestic action



approach is likely to be useful for smaller-scale mitigation projects (such as lighting efficiency projects). It should be noted, however, that CDM financing generally provides only a small portion of the total project financing needs and is available only after the measurement and verification of actual mitigation impacts. Therefore, its value is primarily as supplemental financing rather than being the primary financing source for mitigation projects.

Box 2: Steps in the World Bank Carbon Finance Unit (CFU) Project Cycle Project Idea Note (PIN): Potential projects are submitted to the CFU in the form of a PIN. The PIN consists of a 6-page form that is then quickly analyzed by the Bank. Early Notification and Letter of Endorsement (LoE): In the case that a third-party project sponsor submits the PIN, the Bank will contact the host country to ensure that it is aware of both the project and the follow-up responsibilities required under the Kyoto Protocol. Host Country Committee Memorandum of Understanding (HCC MOU): Signing an MOU enables a host country to join the HCC and attend members’ meetings. Carbon Finance Document (CFD): Formerly known as the Project Concept Note (PCN), the CFD is an intermediate document that provides enough information on the project that the Fund Management Committee is able to review and clear the project for further development. Letter of Intent (LoI): By signing this letter, the project entity commits itself to repaying project costs if it does not proceed to negotiate an Emission Reductions Purchase Agreement. World Bank Due Diligence: All projects are subject to an Integrated Safeguard Policies review and an Environmental Assessment (EA). Baseline Study and Monitoring Plan: During this stage, the project entity is required to outline pre-implementation baseline conditions. Furthermore, the project entity must establish a means of monitoring savings earned during the project cycle. Letter of Approval (LoA): The host country formally approves the project and confirms that the project assists the host country in achieving sustainable development. Project Design Document (PDD): This document enables the operational entity to determine that the project has (a) met approval by all parties, (b) would result in emissions reductions, and (c) has an appropriate baseline and monitoring plan. Validation: The CFU engages an independent validator who must agree that (a) emissions reductions are additional to the baseline, (b) the MP is sufficient, and (c) the emission reductions have a high chance of being certified under the Kyoto Protocol. Pre-Negotiations Workshop: This event brings together all involved parties to ensure fairness in the process of negotiating a Host Country Agreement and an Emissions Reduction Purchase Agreement (ERPA). Negotiations/Host Country Agreement/ERPA: The final terms of the ERPA are agreed between the CFU, project sponsor, and host country. The project sponsor then signs the ERPA, and the host country signs the corresponding Host Country Agreement. Post-Negotiations Workshop: The CFU may use this workshop to share “best practices” learned from the project with a wider group of CFU constituents, as well as other host countries. Initial Verification: The CFU contracts a verifier who confirms that the project is ready to generate certifiable ERs. Monitoring: The project operator is responsible for implementing the MP, which allows the project entity to calculate the emissions reductions generated by the project. Verification and Certification: The verifier will issue a certificate, which confirms that the ERs have been achieved in compliance with applicable CDM rules. Transfer of Emission Reductions: The CFU will pay for ERs as agreed upon in the ERPA and the ERs are transferred in accordance with the ERPA and Host Country Agreement. Source: World Bank, Carbon Finance, Project Cycle, http://go.worldbank.org/P3OAVIT6Q0



With the recent agreement in Durban at COP 17 to continue the Kyoto Protocol and CDM beyond 2012, CDM is likely to provide increasing financing options for mitigation projects.26

2.1.3 Multilateral Financial Institutions The term Multilateral Financial Institutions (MFIs) refers to Multilateral Development Banks (MDBs) and other banks and funds (including sub-regional development banks) that provide loans to developing countries. MDBs include the World Bank Group (which consists of the International Bank for Reconstruction and Development, International Development Association, International Finance Corporation, and Multilateral Investment Guarantee Agency) and four Regional Development Banks:

• African Development Bank • The Asian Development Bank • The European Bank for Reconstruction and Development • The Inter-American Development Bank Group

Several other banks and funds that lend to developing countries are also identified as multilateral development institutions, and included under the broad category of Multilateral Financial Institutions (MFIs). These differ from the MDBs in that they have less broad ownership and membership structure or focus on special sectors or activities. Among these are:

• The European Investment Bank (EIB) and The European Commission (EC) • The Nordic Development Fund (NDF) and The Nordic Investment Bank (NIB) • Islamic Development Bank • The OPEC Fund for International Development (OPEC Fund)

A number of Sub-Regional Banks, established for development purposes, are also classified as MFIs, as they are owned by a group of countries (typically borrowing members and not donors). Among these are banks such as Corporacion Andina de Fomento (CAF); Caribbean Development Bank (CDB); Central American Bank for Economic Integration (CABEI); East African Development Bank (EADB); and West African Development Bank.

While the MFIs were originally organized to focus on economic development and poverty reduction, they are now increasingly incorporating climate change into their core lending operations. However, some of these (Islamic Development Bank, OPEC Fund, and West African Development Bank) have not engaged in climate change mitigation activities and are not discussed further in this report.

MFI generally provide loans to national governments for a wide range of programs and projects under very liberal terms. The loans are guaranteed by the government. During the last 10 to 15 years, there have been a large number of MFI loans related to climate change mitigation. Complete listings of these projects can be obtained from the web sites of the MFIs.

It should be noted that while most MFI loans are sovereign loans with repayments guaranteed by national governments, some MFIs have also been engaged in other forms of financing, including (i) sub-sovereign or non-sovereign guarantee loans to local, provincial or state governments (for example, the Asian Development loan to the Indonesia Exim Bank for clean energy finance);27 (ii) loan or credit guarantees, provided to commercial banks and financial institutions to invest in 26 United Nations Framework Convention on Climate Change, http://unfccc.int 27 Asian Development Bank, Proposed Loan and Administration of Technical Assistance Grant to Indonesia Exim

Bank, Project No. 44906, March 2011.



climate change mitigation projects (for example, the IFC partial risk guarantee programs in Eastern and Central Europe)28; and (iii) and loans (and sometimes equity investments) in private firms some arms of the MFIs (such as the UN Foundation’s Seed Capital Assistance Facility,29 and the International Finance Corporation’s Sustainable Energy Finance Facility).30

The MFIs have also established Special Climate Funds to finance mitigation projects. These are discussed below.

Table 2.1 shows the major MFIs and some of their climate change mitigation programs.

Table 2.1 – Multilateral Financial Institutions

NAME GEOGRAPHIC COVERAGE

MAJOR ACTIVITIES

The World Bank (IDA & IBRD) Worldwide

Substantially increased its lending for climate change mitigation activities; Established and operates Carbon Finance Facility and Carbon Partnership Fund; Responsible for managing a number of special climate funds including the Clean Technology Fund and Strategic Climate Fund; Has introduced the concept of Green Bonds to support mitigation activities

International Finance Corporation (IFC)

Worldwide

Private sector arm of the World Bank Group; Finances debt and equity for private firms; Created the sustainable finance facility; Designed and implemented Partial Risk Guarantee Programs and other risk‐sharing facilities

Multilateral Investment Guarantee Agency (MIGA)

Worldwide

promote foreign direct investment (FDI) into developing countries to help support economic growth, reduce poverty, & improve people's lives; guarantees against losses, and it provides environmental and social expertise in its major sectors of focus.

Asian Development Bank Asia

Substantial commitments to increased financing of climate change mitigation; Established and operates a number of funds and financing facilities, including Clean Energy Finance Partnership, Energy for All, Energy Efficiency Initiative, Clean Energy Private Equity Partnership and Climate Change Fund

28 IFC, in cooperation with GEF, successfully issued partial credit guarantees for energy efficiency and renewable

energy projects under the Hungarian Energy Efficiency Co-Financing Program (HEECP) and the Commercializing Energy Efficiency Finance (CEEF) program. See Danish Management group. (2010). Danish Management Group, Final Process and Impact Evaluation, Commercializing Energy Efficiency Finance (CEEF) and Hungarian Energy Efficiency Co-Financing Program (HEECP), Report submitted to IFC, February 2010

29 GEF and UN Foundation, Seed Capital Assistance Facility (SCAF), http://scaf-energy.org/about/introduction.html 30 International Finance Corporation, http://www.ifc.org/ifcext/globalfm.nsf/Content/Financial+Products



African Development Bank (AfDB)

Africa

Has committed to increasing climate change mitigation financing; Established the Sustainable Energy Fund for Africa and the Congo Basin Ecosystems Conservation Program

European Investment Bank (EIB) EU and Central and Eastern Europe

Substantial commitments to environmental sustainability and financing of climate change mitigation; Established and operates a number of funds and financing facilities, including Climate Change Technical Assistance Facility, EIB KfW carbon Program, and Post‐2012 Carbon Credit Facility


EU and Central and Eastern Europe

Has had an environment mandate since its inception and there is strong Senior Management recognition an support of sustainable energy and climate change; Established and operates the EBRD Carbon Fund and the Multilateral Carbon Credit Fund

Inter‐American Development Bank (IDB)

Latin America

Established the Sustainable Energy and Climate Change Initiative (SECCI) to mainstream RE, EE, and carbon finance for mitigation and adaptation; Also operates the Infrastructure Fund and the IDB Multilateral Investment Fund, both of which are now financing mitigation investments

Corporacion Andina de Fomento (CAF)

Latin America

Established the Latin American Carbon Clean and Alternative Energy Program (PLAC+E); Strong focus on RE and EE and partnership with KfW for equity investment in Clean Energy Also established Clean Technology Fund

Central American Bank for Economic Integration (CABEI)

Central America

Promotes the integration and balanced economic and social development of Central American countries; Focuses on RE, EE, biofuels and rural electrification

East African Development Bank (EADB)

East Africa

Promotes sustainable socio‐economic development in East Africa by providing development finance, and advisory services; Is now increasing financing of mitigation projects

Source: Compiled by Authors from various reports from the Overseas Development Institute and UNEP, and the web sites of these MFIs. Additional detail is provided in Appendix II.



2.2 SPECIAL FUNDS FOR CLIMATE CHANGE MITIGATION Recognizing that substantial funding beyond CDM financing is needed for mitigation, the MFIs, in partnership with national governments, BFIs, and Regional Development Banks, have established a number of special funds to support mitigation efforts in developing countries. Prominent amongst these are the two main the Climate Investment Funds (CIFs) administered by the World Bank – the Clean Technology Fund (CTF) and the Strategic Climate Fund (which consists of 3 major funds – see below). The European commission has launched the Global Energy Efficiency and Renewable Energy Fund (GEEREF), and a group of 350 partners including 45 governments as well as a range of private companies and international organizations have established the Renewable Energy and Energy Efficiency Partnership (REEEP). These 4 funds are briefly reviewed below, followed by a listing of some of the other special climate funds.

2.2.1 Clean Technology Fund The principal features of the CTF are:31

• Utilizing MDB capabilities to leverage private and public resources for low carbon investments;

• Promoting environmental and development co-benefits to demonstrate how low carbon technologies can contribute to national development goals and strategies;

• Providing concessional financing with a grant element tailored to cover the identifiable additional costs of the investment necessary to make the project viable.

The CTF seeks to have transformational impacts by supporting investment programs that (i) constitute a dominant part of countries’ low carbon development strategies;(ii) shape the course of markets for technology deployment; and/or (iii) Transcend GHG emissions savings objectives by providing broader development and environmental benefits. The total funding of the CTF is USD 4.6 billion, and all of the pledged resources have now been committed to 15 investment programs in large developing country economies. The investment programs have focused on renewable energy (both grid-based and off-grid), energy efficiency (in buildings, industry and agriculture, and modal shifts and efficiency improvement in transport.

2.2.2 Strategic Climate Fund The Strategic Climate Fund (SCF) serves as an overarching fund to support targeted programs with dedicated funding to pilot new approaches with potential for scaled-up, transformational action aimed at a specific climate change challenge or sectoral response. Targeted programs under the SCF include:

2.2.2.1 Program for Scaling-Up Renewable Energy in Low Income Countries (SREP),

SREP was approved in May 2009, is aimed at demonstrating the economic, social and environmental viability of low carbon development pathways in the energy sector by creating new economic opportunities and increasing energy access through the use of renewable energy. The principal objectives of SREP are to:

• Serve as a model in assisting low income countries to foster a transformational change to low carbon pathways by exploiting renewable energy potential

31 See World Bank, Clean Technology Fund, http://www.climateinvestmentfunds.org



• Overcome economic and non-economic barriers to scale up private sector investments to achieve SREP objectives

• Highlight economic, social and environmental co-benefits of RE programs • Enable blended financing from multiple sources to enable scaling up of RE programs • Facilitate knowledge sharing and exchange of international experience and lessons.

2.2.2.2 The Forest Investment Program (FIP) FIP was approved in May 2009, aims to support developing countries’ efforts to reduce emissions from deforestation and forest degradation by providing scaled-up bridge financing for readiness reforms and public and private investments. It will finance programmatic efforts to address the underlying causes of deforestation and forest degradation and to overcome barriers that have hindered past efforts to do so.

FIP objectives are to: • Initiate and facilitate steps towards transformational change in developing countries’

forest related policies and practices. • Facilitate the leveraging of additional and sustained financial resources for REDD,

through a possible UNFCCC forest mechanism, leading to an effective and sustained reduction of deforestation and forest degradation, thereby enhancing the sustainable management of forests.

• Pilot replicable models to generate understanding and learning of the links between the implementation of forest-related investments, policies and measures and long-term emission reductions and conservation, sustainable management of forests and the enhancement of forest carbon stocks in developing countries.

2.2.2.3 The Pilot Program for Climate Resilience (PPCR) PPCR was approved in November 2008, was the first Program under the SCF to become operational. It aims to pilot and demonstrate ways in which climate risk and resilience may be integrated into core development planning and implementation. In this way, the PPCR provides incentives for scaled-up action and initiates transformational change.

PPCR supports: • Funding for technical assistance to enable developing countries to build upon existing

national work to integrate climate resilience into national and sectoral development plans. • Funding public and private sector investments indentified in national or sectoral

development plans or strategies addressing climate resilience.

2.2.3 Global Energy Efficiency and Renewable Energy Fund (GEEREF) The Global Energy Efficiency and Renewable Energy Fund (GEEREF) is a Public-Private Partnership (PPP) launched by the European Commission in 2006 to maximize the leverage of public funds.32 Structured as a “Fund-of-Funds”, GEEREF invests in private equity funds that provide equity finance to small and medium-sized project developers and enterprises. The $169.5 million pledged to the GEEREF is administered by the European Investment Bank. Funding for four commercial renewable energy investment funds in Asia, South Africa and Latin America has been approved to date. 32 Global Energy Efficiency and Renewable Energy Fund (GEEREF), http://geeref.com/



GEEREF’s focus is on renewable energy, including but not limited to small hydro, solar, wind, biomass and geothermal; and energy efficiency, including but not limited to waste heat recovery, energy management in buildings, cogeneration of heat and power, energy storage and smart grids. GEEREF does not directly provide funding to renewable energy and energy efficiency projects or enterprises, but rather invests in private equity funds that specialise in providing equity finance to small and medium-sized project developers and enterprises (SMEs). These private funds must have a pipeline of environmentally and financially sustainable projects and must meet strict investment criteria in order to qualify for GEEREF funding.

2.2.4 Renewable Energy and Energy Efficiency Partnership (REEEP) REEEP was established to facilitate the transformation of energy systems by accelerating the uptake of renewables and energy efficiency technology, to reduce carbon emissions, increase energy security, and improve access to sustainable energy for the poor worldwide. Its principal objective is to develop the market for sustainable energy by:

• Assisting governments in creating favorable regulatory and policy frameworks, and • Promoting innovative finance and business models to activate the private sector

While REEEP is a global fund, its current focus is on Brazil, China, India, Indonesia and South Africa, as well as a small number of projects in Sub-Saharan Africa. REEEP funds projects using a competitive bidding process. Proposals can be made by governments, regulators and development financial institutions (DFIs), as well as NGOs and private firms.

2.2.5 Other Special Climate Funds A large number of other climate funds have been established by various international organizations. For example, GEF has established the Least Developed Countries Fund (LDCF to address the needs of the 48 least developed countries. Most of the MDBs have established special climate funds to address mitigation issues in their member countries. These include:

• Asian development Bank • African Development Bank • Caribbean Development Bank • Inter-American Development Bank • International Monetary Fund

In addition special climate funds have been established by E&Co, the Nordic Development Fund, UNDP, UNEP, and the UN Foundation. Some of the funds, such as the Seed Capital Assistance Facility (SCAF), provide seed financing to early stage clean energy enterprises and projects.

Table 2.2 highlights some of the characteristics of the special climate funds.



Table 2.2 – Examples of Special Climate Funds

FUND NAME OPERATED BY FUNDING AMOUNT FOCUS

Clean Technology Fund The World Bank $4.5 Bi l ionDevelopment and deployment of low‐

carbon technologiesSREP ‐ Sca l ing‐up Renewable Energy

The World Bank $318 mil l ionAss is t low income countries develop low

carbon strategy

Forest Investment Program The World Bank $578 mil l ionTrans formatiomnal change in forest pol icies of developing countries

Pi lot Program for Cl imate Res i l ience

The World Bank $ 1 bi l l ionDemonstrate pol icies for integrating

cl imate i s sues in development planning

GEEREF GEEREF Secretariat €108 mil l ionCut greenhouse gas emiss ions and

increase access to sus ta inable energy

REEEPREEEP International

Secretariat$318 mil l ion

∙ Ass is t governments in creating favorable regulatory and pol icy frameworks

ADB Clean Energy Private Equity Funds

As ian Development Bank

$100 mil l ionCata lyze increased investment in clean

energy projects

ADB Cl imate Change FundAs ian Development

Bank$40 mil l ion

Faci l i tate increased investment in cl imate change mitigation

AfDB Congo Bas in Forest Fund

African Development Bank

GBP 100 mil l ionSupport innovative fotres t mnanagement

and reduce fores t degradationAfDB Susta inable Energy

Fund for AfricaAfrican Development

Bank$57 mil l ion

Enhance the commercia l viabi l i ty and bankabi l i ty private sector projects

BNDES Amazon FundBNDES ‐ Brazi lan

Development Bank$127 mil l ion

Preservation and susta inable use of fores ts in the Amazon Biome.

Bulgaria Energy Efficiency Fund

Management Team selcted by the Donors

$18 mil l ionFinancing of viable EE projects , resulting in

substantia l reduction GHG emiss ions

CLIM‐DEV Africa Specia l Fund

African Development Bank

$136 mil l ionStrengthen the ins ti tutional capacity to

formulate and implement effective cl imate‐sens i tive pol icies .

E&Co. CAREC Fund E & Co. N/APromote the use of renewable energy

technologiesGEF Least Developed

Countries FundGlobal Environment

Facility$169 mil l ion

Address cl imate change i s sues of leas t developed countries

IDB Multi la tera l Investment Fund

Inter‐American Development bank

$600 mil l ionSupport increased competi tiveness of SMEs

related to cl imate changeIndones ia Cl imate Chane

Trus t FundICCTF Secrtariat $5.4 mil l ion

Achieve Indones ia ’s goals of a low carbon economy

Mediterranean Inves tment faci l i ty

UNEP $10 mil l ionDevelop a vibrant, susta inable renewable

energy market system

Nordic Development FundNordic Development Fund Secretariat

€ bi l l ionFaci l i tate cl imate change investments in

low‐income countries

Seed Capital Assitance Facility

Global Environment Facility

$10.5 millionProvide seed financing to early stage clean

energy enterprises and projects

Special Climate Change Fund

Global Environment Facility

$110 millionSupport technology trans fer projects and programs for susta inable development

UNDP/Spain MDG Fund UNDP $90 mil l ionSupport pol icies and programs that promise s igni ficant and measurable

impact on select MDGs



2.3 CARBON FUNDS As a result of the Kyoto Protocol and the resulting Clean Development Mechanism (CDM) under the UNFCCC, it has been possible to monetize the carbon savings from climate change mitigation actions using the carbon markets. However, the transaction costs of working with the cap and trade systems and related markets can sometimes be high, particularly for smaller projects. Some of the MFIs have therefore created mechanisms to facilitate the sale of the certified emission reduction (CER) credits from mitigation projects.

One of the best examples is the World Bank’s Carbon Funds and Finance Facilities which purchase the carbon credits from the reduction of greenhouse gas emissions by emitters in developing countries. The World Bank carbon finance covers a wide range of sectors, including projects relating to renewable energy, energy efficiency, urban infrastructure, waste management, pollution abatement, forestry, and water resource management.33 The WB carbon finance facility offers possible upfront payments of up to 25% of transaction amount and in some cases covered post-2012 purchases. The facility also may pay for carbon asset development costs in deserving cases.

Other carbon funds established by MFIs include:

• Asian Development Bank (ADB) – ADB’s Carbon Market Initiative (CMI) includes the Asia Pacific Carbon Fund (APCF) and Future Carbon Fund (FCF), established and managed by ADB to co-finance CDM projects by securing a portion of the expected future certified emission reductions (CERs) from CDM-eligible projects in exchange for upfront finance. CMI also provides technical support for CDM projects through the Technical Support Facility and marketing support for carbon credits through the Credit Marketing Facility (CMF).

• African Development Bank (AfDB) – The AfDB’s Africa Carbon Support Program assists in the development of appropriate project preparation documentations including Project Information Notes (PIN) and Project Design Documents (PDD); supports the development of regional grid emission factor(s); and assists project owners to successfully commercialize the carbon potential of projects.

• The Carbon Partnership Facility (CPF), developed by the World Bank in collaboration with Governments of Spain, Norway and Italy, the European Commission and Endesa SA and E.ON Carbon Sourcing North America LLC to establish the Carbon Asset Development Fund which is purchasing carbon credits from projects in a number of developing countries.

• EIB-KfW Carbon Program II – This Program represents an opportunity for selling and purchasing carbon emission credits in least developed countries (LDCs) which are especially vulnerable to the effects of climate change while being responsible only for a very low level of GHG emissions. It also facilitates credits to be regulated under their post- 2012 successor program(s).

• Multilateral Carbon Credit Fund (MCCF), sponsored by EIB and EBRD, with sovereign participants including Finland, Belgium (Flanders), Ireland, Luxembourg, Spain and Sweden, and private participants CEZ (Czech Rep.), Endesa (Spain), Gas Natural (Spain), PPC (Greece), Union Fenosa (Spain) and Zeroemissions (Spain). The

33 The World Bank, www.carbonfinance.org



MCCF is one of the few carbon funds dedicated specifically to countries from Central Europe to Central Asia.

• The UNDP MDG Carbon Facility, sponsored by UNDP and Fortis Bank, targets projects in (i) countries which are either under-represented in carbon finance, and/or (ii) which achieve outcomes which contribute to the host’s Millennium Development Goals. UNDP works with project developers towards emission reductions and then partners with buyers (either private sector or government) to purchase the credits generated by the project.

The key characteristics of these funds are shown in Table 2.3

Table 2.3 – Carbon Funds

.

FUND NAME OPERATED BY FUND SIZE CHARACTERISTICS

ADB Asia‐Pacific Carbon Fund

Asian Development Bank $152 millionUpfront financing of Up to 75% of expected CER

volume

ADB Future Carbon Fund Asian Development Bank $115 millionUpfront financing of Up to 50% of expected CER

volume.AfDB African Carbon

Market Support ProgramAsian Development Bank N/A Assists in the development of PINs and PDDs

African Carbon Asset Development Facil ity

UNEP $87 mill ionTechnical assistance, transaction cost sharing,

and financial institution outreachCarbon Finance for

Agriculture, Silviculture, Fonds Français pour

l 'Environnement Mondial€2.3 mill ion

Capacity building, project development, knowledge management.

EIB‐KfW Carbon Program II European Investment Bank €100 million Purchase carbon credits form LDCs vulnerable

to climate changeEIB Post‐2012 Carbon

Credit FundEuropean Investment Bank €125 million Purchase CERs with vintages 2013‐2020

Forest Carbon Partnership Facil ity (FCPF)

The World Bank $160 millionAssist in preparing for a large‐scale reduction of emissions from deforestation and land

degradation Multi lateral Carbon Credit

Fund (MCCF)European Investment Bank €208.5 mill ion

Carbon fund dedicated specifically to countries from Central Europe to Central Asia

UNDP/MDG Carbon Facility UNDP Project‐specificPromote emission reduction projects which contribute to the Millennium Development

Goals

World Bank Carbon Funds and Facil ities

The World Bank $2.5 bil l ionPossible upfront payment (up to 25% of

transaction amount) and some possible post‐2012 purchase.

World Bank Carbon Partnership Facil ity (CPF)

The World Bank N/AProvision of carbon finance for the long‐term

(post‐2012 period)



2.4 BILATERAL FINANCING SOURCES

2.4.1 Introduction A bilateral financing institution (BFI) is a financing organizations created and directed by a national government for the purpose of giving aid or investing in targeted development projects and programs in developing countries and emerging markets. BFIs carry out the mandates given to them by the national governments which are based on the strategic objectives of the governments and their focus on specific geographic areas and technologies.

Many OECD countries also have bilateral development cooperation agencies whose activities are often similar to those of BFIs. However, these types of institutions differ in mandate and purpose, to the extent that BFIs exist as banks, with a profit as well a development objective, while the development cooperation agencies often provide grants to developing countries. Furthermore, bilateral development cooperation agencies generally fall under the auspices of “development” ministries, while BFIs are generally under finance ministries. Despite differences in mandate and purpose, development cooperation agencies and BFIs share many considerations with respect to their climate portfolios, and both have integrated climate change considerations into their regular operations.

Bilateral financing institutions (BFIs) have for decades played a key role in providing aid and investments to developing countries. They have over the last 10 to 15 years integrated climate finance into their development activities and are now very significant agents in delivering finance for climate change.

Since the BFIs design their financing strategies and programs based on the strategic framework set by their respective national governments, they generally operate independently of each other. However, in some cases, they have collaborated with multilateral financing institutions and other BFIIs in financing programs for specific countries or in creating special climate funds.

2.4.2 Major BFIs A list of the major BFIs is provided in Box 3. These organizations are members of the OECD Development Assistance Committee (DAC). Most of these (but not all) have some programs for financing climate change mitigation. Examples of some of the leading BFIs are provided later in this Section. Additional information on the BFIs that have climate change mitigation activities is provided in Appendix 2 of this report.

In addition to the BFIs shown in Box 3, other agencies of various governments have also provided financing for climate change mitigation, or contributed to special funds for mitigation. For example the Italian Ministry Of Environment, Land and Sea has helped establish the Mediterranean Investment Facility in collaboration with UNEP.34

It should be noted that in recent years some non-members of OECD DAC, have established bilateral aid programs for lesser developed nations. These include some of the newer members of the EU (such as the Czech Republic, Hungary and Poland; countries engaged in “South-South” cooperation, such as China, India, Brazil and South Africa; and Arab countries, such as Saudi Arabia and the United Arab Emirates (UAE).35 However, most of this aid has not focused on

34 See Unep, http://www.unep.org/climatechange/finance/LoanProgrammes/MEDREP/tabid/29557/Default.aspx 35 OECD Development Cooperation Directorate, Beyond the DAC: The Welcome Role of Other Providers in

Development Finance, DCD Issues Brief, May 2010.



climate change mitigation and these development financing sources are therefore not addressed further in this report.

2.4.3 Financing Approaches Used by BFIs The financing mechanisms used by BFIs are generally similar to those used by the MFIs. They mainly include concessional loans, market-based (non-concessional) loans, and grants. Concessional loans (which represent the majority of BFI financing) are provided to improve the economic attractiveness of mitigation projects and to leverage financing from commercial financial institutions. Market-based financing is provided when the projects are economically attractive but there are limitations on the availability of funds. Grants from BFIs are not too common. These may be provided in cases where mitigation projects are unlikely to be implemented with conventional financing or with concessional loans.

Figure 2.2 illustrates the distribution of the financing mechanisms for mitigation projects from some of the leading BFIs.

Box 3 – List of Bilateral Financing Institutions

• Agence Francaise de Developpement (AfD) • Australian Agency for International Development (AusAID) • Austrian Development Agency (ADA) • Canadian International Development Agency (CIDA) • Danish Development Agency (DANIDA) • Department for International Development (DFID) – U.K. • Department for International Development Cooperation (Finland) • Deutsche Gesellschaft für Internationale Zusammenarbeit GmbH (GIZ) • Ireland Development Cooperation • Japan International Cooperation Agency (JICA) • Kreditanstalt fur Wiederaufbau (KfW) • Netherlands Development Cooperation • New Zealand Official Development Assistance (NZODA) • Norwegian Agency for Development Cooperation • Swedish International Development Cooperation Agency (SIDA) • U.S. Agency for International Development (USAID)

Source: Compiled by Authors



Figure 2.2 – Distribution of Financing Mechanisms from Leading BFIs

Source: UNEP, Bilateral Finance Institutions and Climate Change, 2010.

2.4.4 Role of BFIs in Special Climate Funds Many bilateral agencies have participated in the establishment of special funds for climate change mitigation. For example, the Clean Technology Fund, managed and operated by the World Bank, includes contributions from Australia, France, Germany, Japan, Spain, Sweden, the United Kingdom, and the United States. The E&Co CAREC fund includes contributions from Belgium, Finland and the Netherlands, and Germany and Norway are major contributors to the GEEREF.

Table 2.4 provides examples of the participation of various countries in selected special funds for climate change mitigation.

Table 2.4 – Examples of BFI Participation in Special Funds for Climate Change Mitigation

FUND PARTICIPATING COUNTRIES

Clean Technology Fund Australia, France, Germany, Japan, Spain, Sweden, United Kingdom, United States

Caribbean Development Bank – Special Development Fund

Canada, France, Germany, Italy, United Kingdom

E&Co. CAREC Fund Belgium, Finland, Netherlands

GEEREF Germany, Norway

IDB – Multilateral Investment Fund 39 donor countries from Latin America and the Caribbean, North America, Europe and Asia

Indonesia Climate Change Trust Fund United Kingdom, Australia, Sweden

Mediterranean Investment Facility Italy

Nordic Development Fund Denmark, Finland, Iceland, Norway and Sweden

UNDP/Spain MDG Achievement Fund

Spain



BFIs have also participated in the establishment of carbon funds. In Germany, the Government established the KfW Carbon Fund (now KfW Entwicklungsbank) which has concluded the purchase of 8 million carbon credits from 12 countries. KfW has also partnered with the European Investment Bank to establish the EIB-KfW carbon Program and the Post-2012 Carbon Credit Fund, the first fund to purchase carbon credits beyond the initial limit of the Kyoto Protocol.

The Nordic Environment Finance Company (NEFCO) operates two carbon funds – the NEFCO Carbon Fund and the Baltic Sea Region testing Ground Facility (TGF). Both of these are structured as public-private partnerships for purchasing carbon credits from mitigation projects.

The Japan International Cooperation Agency (JICA) provides funding to the World Bank Carbon Finance Facility to assist developing countries in accessing the carbon markets.

2.4.5 Examples of Leading BFIs This section provides an overview of the mitigation financing programs of three of the largest bilateral financing institutions.

2.4.5.1 Japan International Cooperation Agency (JICA) Japan has been one of the largest bilateral financing sources for several decades. The Japan International Cooperation Agency (JICA) was one of the main organizations providing Japanese aid. In 2008, Japan brought together all of its international development operations to form one “new JICA”, merging the former operations of the Japan Bank of International Cooperation (which provided overseas development assistance or ODA loans), the Ministry of Foreign Affairs (which provided grant aid), and the old JICA (which provided technical assistance). However, the Ministry of Foreign Affairs still plays a role in governing ODA loans.

JICA has focused on low-carbon development as a cornerstone of its climate change mitigation strategy. JICA’s programs related to climate change mitigation include technical cooperation, grants and development loans. JICA has also developed a Climate Finance Impact Tool (Climate-FIT) for mitigation to help the estimation of quantitative evaluations of GHG emission reduction from mitigation action.36

Examples of mitigation projects funded by JICA include:

• Low-carbon development program for Indonesia • Mass transit system in Bangkok • Sahara Solar Energy Center in Algeria • Integrated Solar Combined Cycle Power Plant in Egypt • Photovoltaic Rural Electrification and Water Supply Project in Tunisia • Concessional line of Credit for Energy efficiency Improvement in Small and medium

Industries in India

Two of JICA’s initiatives related to financing climate change mitigation are included in Appendix 2 – The Hatoyama Initiative, and Japan’s Fast Start Finance.

36 Additional discussion of this tool is provided later in the discussion of measurement and evaluation.



2.4.5.2 KfW, Germany In Germany, international development operations are shared between different state agencies, including ODA loans delivered by KfW Development Bank, technical assistance provided by Deutsche Gesellschaft für Internationale Zusammenarbeit GmbH or GIZ (formerly known as GTZ), grant aid from the Federal Ministry for Economic Cooperation and Development (BMZ), and capacity building assistance provided by INWENT. Of these, the most prominent BFI is Kreditanstalt fur Wiederaufbau (KfW).

KfW has become a leading environmental and climate finance institution which is continuously expanding its activities on behalf of the German Government. In 2010, KfW made new financing commitments of €4.5 billion, of which €2.6 billion was committed for environmental and climate relevant projects. Renewable energy and energy efficiency projects together accounted for 41 per cent of the volume of total new commitments. The remaining financing was for water and waste management, forestry, agriculture, transport and infrastructure.

The financing mechanisms used by KfW include grants, development loans, promotional loans, and credit lines. KfW is increasingly developing public-private partnerships, and engaging in project financing, including both debt and equity. Both of these mechanisms are designed to leverage private financing.

Illustrative projects financed by KfW include;

• Energy efficiency in the SME sector in India • Solar energy development bin Brazil • Wind farm on the Red Sea in Egypt • Efficient transport in China • Forest conservation in Nicaragua

Appendix 2 includes additional information on KfW and the carbon funds it has established in collaboration with the European Investment Bank.

2.4.5.3 Agence Francaise de Developpement (AfD) In France, AFD was established to work on behalf of the French government to finance development in accordance with French overseas development assistance policies. The Primary Objectives of AFD Strategic Orientation Project are:

• Provide a diversified range of services including advice, capacity building and financing • Aim for AFD's financing commitments to contribute to at least 40% of each of its three

primary goals: promoting economic growth, fighting poverty and preserving “Global Public Goods,” which includes means fighting climate change

• Dedicate at least 80% of all grant monies and 60% of France's development aid contribution to AFD's budget to interventions in sub-Saharan Africa

• Implement a strategy for interventions in emerging countries based on managing Global Public Goods of benefit to all humanity, i.e. fighting climate change and pandemics, and preserving biodiversity.

AfD directs 50% of its financing commitments to non-sovereign entities, such as local governments and authorities, businesses and non-governmental organizations.



In 2009, AFD committed over €6.2 billion to more than 60 developing countries in Africa, Asia, the Mediterranean Basin, the Middle East, South America, and the French Overseas Territories. The financing mechanisms used by AfD include loans, subsidies, guarantees, and financing g of debt reduction-development contracts. AfD also provides equity investments through its subsidiary PROPARCO which works with the private sector.

AfD, in cooperation with JICA, has pioneered a new approach in Indonesia in providing funding to the Indonesian government in integrating climate change mitigation into its economic development strategy. AfD has contributed US$500 million to this Climate Change Program Loan (CCPL). AfD has also financed credit lines for energy efficiency improvement in India, China, Turkey and Tunisia.

AfD also operates the French Global Environment Facility, which has provided grants to a number of climate change mitigation projects, and has partnered with the World Bank in the Africa Assist program to support CDM in sub-Saharan Africa.

2.4.5.4 Summary of Bilateral Financing Sources Table 2.5 provides an overview of the bilateral financing sources. Additional detail on each is provided in Appendix 2.

Table 2.5 – Summary of Bilateral Financing Sources

FINANCING SOURCE FUNDING PROVIDED BY MAJOR ACTIVITIES

AFD – French Development Agency Government of FranceAss itance to over 70 countries in susta inable

developmentAusAID ‐ Community Based Cl imate change Action

GrantsGovernment of Austra l ia

Financing envi ronmental susta inabi l i ty in Sotheast Asia and the Paci fi c

Austrian Development Cooperation (ADC) Energy and Environment Partnership Program

Government of AustriaSusta inable development in Soutrhern and Eastern

Africa

DANIDA (Danish Internationa l Development Agency) Government of DenmarkEnviroinmenta l protection and cl imate change mitigation in developing countries worldwide

Guyana REDD + Investment Fund (GRIF) Government of NorwayPay for l imi ting GHG emiss ions from deforestation

and forest degradation in Guyana

Internationa l Cl imate Fund (Formerly ETF‐IW) Government of U.K.Drive urgent action to tackle cl imate change by

supporting low carbon growth

Internationa l Cl imate Ini tiative Government of GermanyPromote cl imate‐friendly development in

developing countries

Internationa l Forest Carbon Ini tiative (IFCI) Government of Austra l iaDemonstration activi ties to show how REDD+ can be included in a post‐2012 global cl imate change

Japan Bank for Internationa l Development (JBIC) Government of JapanLoans for renewable energy and energy effi ciency

in developing countries

JICA ‐ Japan’s Fast Start Finance Government of JapanCoordinate and implement a l l of Japan's activi ties

relating to cl imate change

JAPAN ‐ The Hatoyama Ini tiative Government of JapanMitigation ass is tance for energy savings , energy efficiency technologies , and new, clean energy

KfW ‐ Kredi tanstal t fur Wiederaufbau Government of GermanySusta inable cl imate‐friendly economic development in over 100 countries

KfW CHILE ‐ CORFO Credi t Line Program Government of GermanyFinancing of projects which provide cleaner and

more efficient production

KfW ‐ Fund Solutions for Cl imate Finance Government of GermanyPubl ic private partnership to enhance energy effi ciency and foster renewable energies

OPIC ‐ Overseas Private Investment Corporation Government of U.S.A.Mobi l ze private capi ta l for sus ta inable

development

USAID – Global Cl imate Change Ini tia tive Government of U.S.A.Promote cl imate solutions that spur economic

growth and ensure susta inabi l i ty



2.5 CHARACTERISTICS OF MULTILATERAL AND BILATERAL FINANCING SOURCES

2.5.1 Geographic Focus The geographic focus of the multilateral and bilateral funding sources varies significantly. In Appendix 2, information has been provided for each financing source (including special climate funds and carbon funds) on the regional focus. A summary is provided here.

2.5.1.1 MFIs Among the MFIs, the World Bank (and the various agencies in the World Bank Group) covers climate change mitigation activities throughout the entire developing world. There are regional groups within each of the various World Bank Group members that focus on various developing regions of the world.

Similarly, agencies of the United Nations, such as the UNDP and UNEP have worldwide coverage for climate change mitigation, and have initiated projects in many parts of the developing world. One UNEP initiative, the Mediterranean Investment Facility established in cooperation with the Italian Ministry of Environment, Land, and Sea, addresses only the Mediterranean region.

The other MFIs are regionally focused and their scope of climate change mitigation activities is within their region. Table 2.1 above provides information on the major MFIs and their geographic coverage.

2.5.1.1 Special Climate Funds As indicated above, the MFIs (sometimes in cooperation with BFIs) have established a number of special funds for climate change mitigation. These funds have varying geographic coverage. Some of the special funds established under the UNFCCC, such as the Clean Technology Fund and the Strategic climate Funds (which include SREP, FIP, and PPCR) have worldwide coverage and are available as financing sources for most developing countries. Similarly GEEREF has a worldwide scope. REEEP also has worldwide scope, although in the current funding round the priority countries are Brazil, China, India, Indonesia and South Africa, as well as a small number of countries in Sub-Saharan Africa.

Other special funds have a narrower geographic coverage. The GEF Least Developed Countries Fund (LDCF) addresses the 48 least developed countries. The UNDP/Spain MDG fund covers 50 countries from Africa, Asia Latin America and the Caribbean, Arab States and Eastern Europe.

The special climate funds developed by the various MDBs, other than the World Bank (for example, the Clean Energy Private Equity Funds established by the Asian Development Bank and the Sustainable Energy Fund developed by the African Development Bank) focus on the target countries of those MDBs. One fund, the Indonesia Climate Change Trust Fund is targeted at Indonesia only.

Table 2.6 shows the geographic coverage of all of the funds listed in more detail in Appendix 2.



Table 2.6 – Geographic Coverage of Special Funds for Climate Change Mitigation

FUND NAME GEOGRAPHIC COVERAGE

Clean Technology Fund Worldwide

SREP ‐ Sca l ing‐up Renewable Energy Worldwide

Forest Investment Program Worldwide

Pi lot Program for Cl imate Res i l ience Worldwide

GEEREF Worldwide

REEEPWorldwide (current funding cycle emphasizes

Brazil , China, India, Indonesia and South Africa, as

ADB Clean Energy Private Equity Funds ADB developing member countries

ADB Cl imate Change Fund ADB developing member countries

AfDB Congo Bas in Forest FundCOMIFAC member countries (Burundi, Cameroon, Congo, Gabon, Equatorial Guinea, Central African

AfDB Susta inable Energy Fund for Africa AfDB developing member countries

BNDES Amazon Fund Amazon Basin countries

Bulgaria Energy Efficiency Fund Bulgaria

CLIM‐DEV Africa Specia l Fund AfDB developing member countries

E&Co. CAREC FundBelize, Costa Rica, El Salvador, Guatemala,

Honduras, Nicaragua and Panama

GEF Least Developed Countries Fund 48 least developed countries

IDB Multi latera l Investment Fund Countries in Latin America and the Caribbean

Indones ia Cl imate Chane Trust Fund Indonesia

Mediterranean Investment faci l i ty Mediterranean Region

Nordic Development FundDesignated countries in Africa, Asia and latin

America

Seed Capital Assitance Facil ity GEF eligible countries in Asia or Africa

Special Climate Change FundAsia‐Pacific, Africa, South and Central America, Small Island Developing States, Least Developed

UNDP/Spain MDG Fund50 countries from Africa, Asia Latin America and the Caribbean, Arab States and Eastern Europe



2.5.1.3 Carbon Funds The geographic coverage of the carbon funds is analogous to that of the special climate funds. The carbon funds established by the World Bank have worldwide coverage while other carbon funds have narrower geographic coverage.

Table 2.7 shows the geographic coverage of the carbon funds.

Table 2.7 – Geographic Coverage of Carbon Funds

2.5.1.4 BFIs The geographic coverage of the larger BFIs, such as those funded by the Governments of Japan, Germany and France, is worldwide. Similarly the initiatives of the U.K. and U.S. governments, as well as Denmark, cover all developing nations. Some other bilateral sources cover smaller geographic areas. For example the Brazil BNDES fund addresses the Amazon region while Australian aid programs focus on Southeast Asia and the Pacific.

Table 2.8 summarizes the geographic coverage of the bilateral financing sources.

FUND NAME GEOGRAPHIC COVERAGE

ADB Asia‐Pacific Carbon Fund ADB developing member countries

ADB Future Carbon Fund ADB developing member countries

AfDB African Carbon Market Support Program AfDB developing member countries

African carbon Asset Development Facil ity Sub‐Saharan Africa

Carbon Finance for Agriculture, Silviculture, etc.Bénin, Cameroon, Dem. Rep. of the Congo, Gabon,

Madagascar, Mali, and Sénégal

EIB‐KfW carbon program IILDCs that are especially vulnerable to the effects of

climate change

EIB Post‐2012 Carbon Credit Fund All CDM and JI host countries

Forest Carbon Partnership Facil ity (FCPF) Worldwide

Multilateral Carbon Credit Fund (MCCF)Region of EBRD countries of operation (Eastern Europe

and Central Asia)

UNDP/MDG Carbon Facil ity Countries that are under‐represented in carbon finance

World Bank Carbon Funds and Facil ities Worldwide

World Bank Carbon Partnership Facil ity (CPF)Worldwide (current participants are Brazil, Morocco,

Vietmnam, Jordan, Thailand and Tanzania



Table 2.8 - Geographic Coverage of the Bilateral Financing Sources

2.5.1.5 Regional Distribution The regional distribution of climate financing is not easy to determine. A recent study37 looked at the regional distribution of climate financing by three major bilateral financing institutions (JICA, KfW and AfD) and one major multilateral financing source (EIB). The results of that study are shown in Figure 2.3. The largest share of the financing is in Asia and Oceania, which account for 64% of the total. The next highest is Eastern Europe with 11%, followed by Sub-Saharan Africa with 9%, and North Africa and Middle east at 8%. Smaller shares are shown for Latin America (5%) and trans-regional and other (which includes French Overseas territories) at 3%.

37 Stockholm Environmental Institute, Bilateral Finance Institutions and Climate Change: A Mapping of Climate

Portfolios, May 2009.

Bilateral 1 GEOGRAPHIC COVERAGE

ADB Asia‐Pacific Carbon Fund ADB developing member countries

ADB Future Carbon Fund ADB developing member countries

AfDB African Carbon Market Support Program AfDB developing member countries

African carbon Asset Development Facil ity Sub‐Saharan Africa

Carbon Finance for Agriculture, Silviculture, etc.Bénin, Cameroon, Dem. Rep. of the Congo, Gabon,

Madagascar, Mali, and Sénégal

EIB‐KfW carbon program IILDCs that are especially vulnerable to the effects of

climate change

EIB Post‐2012 Carbon Credit Fund All CDM and JI host countries

Forest Carbon Partnership Facil ity (FCPF) Worldwide

Multilateral Carbon Credit Fund (MCCF)Region of EBRD countries of operation (Eastern Europe

and Central Asia)

UNDP/MDG Carbon Facil ity Countries that are under‐represented in carbon finance

World Bank Carbon Funds and Facil ities Worldwide

World Bank Carbon Partnership Facil ity (CPF)Worldwide (current participants are Brazil, Morocco,

Vietmnam, Jordan, Thailand and Tanzania



Figure 2.3 – Regional Distribution of Multilateral and Bilateral Financing for Mitigation

(Includes information from JICA, KfW, AfD and EIB)

Source: Stockholm Environmental Institute, Bilateral Finance Institutions and

Climate Change: A Mapping of Climate Portfolios, May 2009.

2.5.2 Focus on Technologies and Sectors Most of the financing sources for climate change mitigation focus on a wide range of mitigation technologies. Most of them address energy technologies and include:

• Renewable energy, including such as solar energy wind energy small hydropower biomass conversion to gas or electricity biofuels

• Energy efficiency in Industry Buildings Homes public facilities transportation agriculture Street lighting District heating and cooling

• Power sector efficiency improvement (generation, transmission, distribution) • Waste heat recovery • Waste conversion to electricity • Clean distributed generation

Asia and Oceania

Eastern Europe

Sub‐Saharan Africa

North Africa & Middle East

Latin America

Trans‐Regional & Other



Some of the financing sources are selective in addressing only some of the above. For example, the E&Co CAREC fund addresses renewable energy only, while the Bulgaria Energy Efficiency fund focuses exclusively on energy efficiency.38

Some of the financing sources focus on sustainable management of forests and effective and sustained reduction of deforestation and forest degradation. Financing sources dedicated to forest management include the World Bank’s Forest Investment Program and Forest Carbon Partnership Facility, and AfDB’s Congo Basin Forest Fund and CLIM-DEV Africa Special Fund.

As in the case of geographic distribution, detailed information on the distribution of climate mitigation finance by technology/sector is not readily available. From the information compiled by the study cited earlier,39 it is seen (Figure 2.4) that energy (including renewable energy and energy efficiency) has the highest share (47%), with transport coming in second at 34%. Waste management is 4% and forestry and agriculture have very small shares. The remaining 13% is shown as “Other”, which is most likely energy related.

Figure 2.4 – Technology/Sector Distribution of Financing for Mitigation

(Includes information from JICA, KfW, AfD and EIB)

Source: Stockholm Environmental Institute, Bilateral Finance Institutions and Climate Change: A Mapping of Climate Portfolios, May 2009.

2.5.3 Funding Sources The major funding for the multilateral and bilateral financing sources for climate change mitigation comes from governments of OECD countries. The multilateral development banks obtain their funds from various governments the bilateral financial institutions are funded by their national governments. Most of the special funds for climate change mitigation as well as the carbon funds are then established with funds from the multilateral and bilateral sources. As mentioned earlier, while some non-OECD countries are now providing development financing to

38 Energy efficiency generally includes end-use renewable applications but excludes grid-connected renewable

generation. 39 Stockholm Environmental Institute, op cit.

Energy

Transport

Waste

Forestry

Agriculture

Other



other, less developed countries, almost all of the climate change financing is provided by the OECD countries.

2.5.4 Financing Objectives For most multilateral and bilateral financing sources for climate change mitigation while the objectives may be stated in different terms (as may be seen from the individual summaries in Appendix 2), the basic objectives cover providing financing for programs or projects that will reduce greenhouse gas (GHG) emissions and thereby contribute to climate change mitigation.

As shown above, the vast majority of the funding is devoted to energy related projects or programs. The specific objectives of financing sources focusing on energy-related financing (which include MFIs, BFIs and special climate funds, excluding those addressing forestry) are generally stated by using one or a combination of the following:

• Development of low-carbon strategies and deployment of low-carbon technologies • Providing increased investment in renewable energy resources • Facilitating and promoting investment in energy efficiency • Contributing to sustainable development • Integrating climate issues in development planning • Leveraging increased private investment in clean energy (renewables and energy

efficiency)

The objectives of most carbon funds are to facilitate the sale of carbon credits by project developers. Some of the funds also include in their objectives providing up-front financing and/or assisting in project development through technical assistance (TA) or funding of the preparation of Project Information Notes (PIN) and Project Design Documents (PDD).

The objectives of the forestry focused financing sources generally include:

• Sustainable management of forests • Effective and sustained reduction of deforestation and forest degradation • Reducing emissions from deforestation and forest degradation (REDD) • Leveraging of additional and sustained financial resources for REDD • Enhance forest carbon stocks

2.5.5 Financing Mechanisms The primary financing mechanisms utilized by multilateral and bilateral financing sources for climate change mitigation are:

• Grants • Concessional loans • Market-based loans • Credit lines • Credit or risk guarantees • Equity financing

These mechanisms depend on the viability of the technology being deployed and the market barriers that need to be addressed.

Climate change mitigation technologies may be classified in three broad categories:



• Advanced climate-friendly technologies that are technically feasible but have high costs for deployment and have limited operational experience, thereby making them very difficult to finance commercially. Examples include concentrating solar collectors, offshore wind, and electric vehicles. The financing mechanisms most suitable for these technologies include grants and concessional financing.

• Climate-friendly technologies that are proven and commercially available but cannot compete with existing technologies due to the lack of internalizing of the externalities of climate impacts and therefore face barriers to commercial financing. Examples include solar photovoltaic, small hydropower and onshore wind energy. The financing mechanisms appropriate for these technologies include concessional financing and risk guarantees.

• Climate-friendly technologies that are technically and economically viable but face various market and financing barriers that hinder large-scale implementation. The best example is energy efficiency. The financing mechanisms most appropriate for these technologies include market-based loans, concessional loans, credit lines and risk guarantees.

Based on the above, it is not surprising that the largest amount for financing for mitigation is in the form of concessional loans. The financing sources often provide the concessional loans in collaboration with a commercial financial institution and leverage the available funds by requiring matching contributions. An illustrative example is shown in Figure 2.5. The financing source provides a concessional (low interest and long tenor) loan to a commercial financial institution (FI) with the condition that the FI add its own funds (generally at least on a 50-50 basis) and provide the combined funds at a concessional rate to the project developer.

Figure 2.5 – Illustrative Example of Concessional Loan for Mitigation Projects

Source: Limaye, Dilip, Lessons Learned from Innovative Financing of

Energy Efficiency Programs, Presentation at Asia Clean Energy Forum, Manila, June 2011

Market-based loans are used when availability of funds (liquidity) is an issue but there is no need to subsidize the project with concessional financing. In such cases the financing provided by the

Commercial Bank/

Financial Institution

Multilateral orBilateral Financing Source

Project A

Project B

Project C

Provides Concessional

Funds

Adds Funds, Lends at Rates Below Market

Provide Project

Financing



MFI, BFI or climate fund overcomes the liquidity barrier. An example of this mechanism is the World Bank’s China Energy Efficiency Financing (CHEEF) program.40

Risk guarantees are an effective mechanism when the commercial financing sources have a perception of high risk with respect to the climate friendly technology. By providing a risk guarantee, the financing source reduces the risk perception and facilitates the commercial financing. One of the best examples of this mechanism is the IFC’s CEEF Program in Eastern Europe.41

When the basic technology to be deployed is very expensive, grants may be used. However, generally the amount of grant funding available from financing sources is small and may be limited to small projects. The International Climate Initiative (ICI) and the Nordic Development Fund do provide grant funding for projects.

Equity financing is also not very common from multilateral or bilateral sources but there are a few sources of such financing. The GEEREF fund provided equity financing as does the Bulgarian Energy Efficiency Fund.

2.5.6 Management and Governance The management and governance of the financing sources is dependent on the type of financing source and funding sources. The MFIs (such as the World Bank, ADB, EBRD, etc.) are generally governed by a Board of Directors appointed by the countries are fund these MFIs. Within the MFIs, certain financing units are managed by internal groups with external advisors representing the funding sources for that group. For example the World Bank’s Energy Sector Management Assistance Program (ESMAP) is managed by the Bank’s Sustainable Energy Group with several consultative groups and advisory boards for specific ESMAP programs. ADB’s ADB Clean Energy Financing Partnership Facility is governed by a Steering Committee appointed by the ADB Board.

When special funds are created by the MFIs and/or BFIs, they establish an appropriate management and governance structure. This may include a Board or a Secretariat. In some cases the special funds are managed by a professional fund manager, such the Brazilian Development bank (BNDES) managing the BNDES Amazon Fund, or selected on a competitive basis as in the case of the Bulgaria Energy Efficiency Fund.

Most Carbon Funds are managed either by the Board of Directors (such as the ADB Asia Pacific Carbon Fund), by Special Boards, Committees or Trusts set up for fund management (such as for the World Bank Carbon Funds and Facility), or by professional fund managers (such as the EIB Post 2012 Carbon Credit Fund that is managed by Conning Asset Management (Europe) Limited, as investment manager).

The BFIs are usually an arm of a national government, and the management and governance is either directly under the relevant government Ministry or a Board of Directors is appointed by the government to oversee the operations of the BFI. Table 2.9 illustrates some of the management and governance structures of multilateral and bilateral financing sources.

40 World Bank, World Bank, Project Appraisal Document on a Proposed Loan in the Amount of US $200 Million

and a Proposed Grant from the Global Environment Facility Trust Fund in the Amount of US $13.5 Million to the People’s Republic of China in Support of the Energy Efficiency Financing Project. April 21, 2008

41 International Finance Corporation, Commercializing Energy Efficiency Finance (CEEF), Project Brief, 2004



Table 2.9 - Management and Governance Structures of Selected Multilateral and Bilateral Financing Sources

FINANCING SOURCE MANAGEMENT AND GOVERNANCE

The World Bank Group Board of Directors appointed by funding countries

World Bank ‐ ESMAP Bank's Sustainable Energy Groups with varioius

consultative groups and advisory boards

Asian Development Bank Board of Directors appointed by funding countries

ADB Clean Energy Financing Partnership Facil ity ADB's Climate Change Steering Committee


Board of Directors appointed by funding countries

ADB Climate Change FundFund Manager appointed by ADB's Clean Energy

Working Group

AfDB Congo Basin Forest Fund Governing Council appointed by AfDB

BNDES Amazon Fund BNDES Bank

Bulgaria Energy Efficiency Fund Fund Manager appointed by funding organizations

Clean Technology FundCTF Trust Fund Committee, an MDB Committee, a

Partnership Forum, an Administrative Unit & Trustee

Special Climate Change Fund GEF Governing Council

ADB Asia Pacific Carbon Fund ADB Board of Directors

World Bank Carbon Funds and Facil ity Fund Management Unit of WB Carbon Finance +Unit

EIB Post 2012 Carbon Credit FundConning Asset Management (Europe) Limited,

investment manager

AfD Board of Directors ‐ 16 members including 6

government Minsitriesappointed by funding countries

KfW Executive Board appointed by the German Government

AusAidAutonomous agency reporting to the Ministry of

Foreign Affiars and Trade

DANIDA Danish Ministry of Foreign Affairs

International Climate FundManagement Team appointed by U.K. Dept of

International Development and Dept. for Environment and Climate Change

JICABoard of Directors appointed by the Japanese

government

MULTILATERAL SOURCES

SPECIAL CLIMATE FUNDS

Bilateral Financing Sources

CARBON FUNDS



2.6 REQUIREMENTS OF FINANCING SOURCES This section presents an overview of some of the requirements of the multilateral and bilateral financing sources. Additional information can be found in the individual summaries of the financing sources in Appendix 2. The topics addressed below are:

• Qualifying Projects/Programs • Eligibility Conditions • Project/Program Evaluation Criteria • Guidelines and Procedures for Fund Disbursement • Measurement, Reporting and Verification Procedures

2.6.1 Qualifying Projects/Programs Most of the multilateral and bilateral financing sources will accept projects or programs that are consistent with their objectives. Typical objectives were reviewed in section 2.5.3 above. In the case of most MFIs and BFIs, the qualifying programs and projects are determined by negotiations between the applicant country and the financing source.

When special funds are established for climate change mitigation, these funds specify the qualifying programs and projects in broad categories. These may be expressed in the terms of the technologies or sector that the fund is focusing on (such as the list provided above in section 2.5.2.

Many of the special funds consider a wide range of projects encompassing renewable energy, energy efficiency, and other climate change mitigation projects as qualifying projects. However, some special funds have a narrower focus. For example, the Mediterranean Investment facility addresses renewable energy projects. while the Bulgarian Energy Efficiency fund focuses exclusively on energy efficiency. The BNDES Amazon Fund and the AfDB Congo Basin Forest Fund will qualify only forestry related projects.

2.6.2 Eligibility Conditions There is a wide range of eligibility conditions. These are specified (where available) in Appendix 2 for each financing source. The eligibility conditions may cover one or more of the following areas:

• Geographic or regional setting • Technology/Sector covered • Type of financing (grant. Concessional or market-based loan, guarantee, equity finance,

etc.) • Size of project (minimum and maximum) • Co-financing or cost-sharing requirements • Type of proposing entity (government agency, NGO, PPP, private sector, etc.) • Implementation time frame • Etc.

2.6.3 Project/Program Evaluation Criteria The financing sources define the criteria to be utilized for evaluating the eligibility and suitability of the project for financing. Such criteria may include the above items defined under eligibility criteria plus additional items such as:



• Relevance to objectives of the financing source • Relevance to objectives of the funding agencies (who have established the financing

source) • Total funding sought • Amount or % of co-financing • Estimated GHG reductions • Cost of achieving the reductions (such as $ per ton of CO2 equivalent saved) • Economic and financial viability • Experience and capabilities of proposing entity • Program management plan • Implementation plan • Evaluation plan • Etc.

These types of evaluation requirements will be specified by the financing source and should be carefully examined before preparing proposals for financing.

2.6.4 Guidelines and Procedures for Fund Disbursement The procedures for fund disbursement may vary, depending on the requirements of the financing source. In many MFI and BFI financings, the applicant country and the financing source negotiate the fund disbursement procedures for each specific project.

Many of the special funds created by the MFIs and BFIs use a competitive bidding approach for selecting projects for financing. In such cases the financing source will invite proposals from qualifying organizations for eligible projects and will specify the proposal requirements, eligibility criteria, and evaluation procedures and criteria.

2.6.6 Measurement, Reporting and Verification Procedures All financing sources will specify the reporting requirements for each program or project. Generally these will include:

• Periodic progress reports (generally quarterly) • Mid-term evaluation report • Specific reports on individual projects (when a program consists of many projects) • Final Project or Program Report • Evaluation Report

In terms of measurement, reporting and verification (MR&V), all multilateral and bilateral financing sources require a post-implementation evaluation report. Most MFIs and BFIs either conduct the evaluation using their own staff or engage independent consultants to conduct the evaluations. However, there is a need to improve the MR&V procedures used for mitigation actions.42

Some of the financing sources are developing formal tools for monitoring and evaluation. For example:

42 OECD and IEA, Financing Climate Change Mitiugation: Towards a Framework for Measurement, Reporting and

Verification, November 2009.



• JICA has developed the Climate Finance Impact Tool for Mitigation projects.43 • KfW is implementing Climate Check, a tool it had developed in cooperation with GIZ

and BMZ, to factor climate issues and emission reductions into investment decisions and to evaluate the project results.44

• AfD measures emission savings and cost of emission reductions using its AfD Carbon Footprint Tool.45

While the use of such tools is not yet mandatory, it is likely that these types of tools will be very helpful in standardizing the monitoring and evaluation process.

43 Japan International Cooperation Agency, Climate Finance Impact Tool (Climate-FIT) for Mitigation, May 2011 44 GTZ, Climate Check Tool, http://www.gtz.de/climate-check 45AfD, Carbon Footprint Tool, http://www.afd.fr/lang/en/home/projets_afd/AFD-et-

environnement/changement_climatique/Liens_utiles_climat/8461873687



SECTION 3 PRIVATE FINANCING SOURCES FOR MITIGATION ACTIONS



SECTION 3 – PRIVATE FINANCING SOURCES FOR MITIGATION ACTIONS

3.1 OVERVIEW OF PRIVATE FINANCING

3.1.1 Introduction This Section reviews the range of private financing that may be available for climate change mitigation, explores the key issues and considerations in scaling up private financing, and presents examples of a number of private financing sources that are getting more engaged in financing climate change mitigation projects. As indicated in Section 1 of this report, private finance has been a major contributor to climate change mitigation financing, contributing 59% or about $55 billion of financing in 2009-2010. Most of this private financing has been in the form of project debt financing, particularly of renewable energy projects, which have experience substantial growth in the last several years.

Many public sector initiatives, by national governments, multilateral and bilateral financial institutions, and special climate or carbon funds, are designed to foster and promote increased private investment in climate change mitigation. It should be noted that the private sector approaches climate change investments in the same manner as any other investments. However, climate change mitigation projects have certain unique characteristics that require an additional level of understanding and analysis. These include the influence of policies and regulations on the viability of an investment, including the legal basis and durability of any subsidies, grants, tax credits, or other mechanisms that the public sector has employed to encourage investments by the private sector. Also specific public sector financing programs that address climate change mitigation projects with initiatives such as concessional financing or risk guarantees can increase the economic and financial attractiveness of the investments, thereby providing an incentive for private sector investment in such projects.

3.1.2 Risk vs. Return Considerations At the heart of every private investment decision is the basic consideration of the risk of the investment against the potential return on investment. At the individual project level, investors will be most motivated by the profitability of the potential investment, which is determined by whether the investment (either debt or equity) offers the right risk-reward ratios. The private sector will be influenced in the risk-reward assessment by the underlying national and inter-national policy and regulatory framework that will determine the value of the investment.

The major risks considered by the private sector in investments in climate change mitigation projects have been summarized as follows:46

1. Technology risk – reflecting concern that a new and relatively untried technology or system may not work as expected.

46 Overseas Development Institute, Leveraging Private Investment: The Role of Public Sector Climate Finance,

November 2011.



2. General political risk – reflecting concern about political stability and the security of property rights in the country; along with the generally higher cost of working within unfamiliar legal systems.

3. Currency risk – reflecting concern about the loss of value of local currencies (and their lower utility to an overseas investor).

4. Regulatory and policy risk – reflecting concern about the stability and certainty of the regulatory and policy environment, including the longevity of incentives available for low carbon investment and the reliability of power purchase agreements.

5. Execution risk – reflecting concern that the local project developer/firm may lack the capacity and/or experience to execute the project efficiently; along with the general difficulty of operating in a distant and unfamiliar country.

6. Unfamiliarity risk – reflecting the amount of time and effort it takes to understand a project of a kind that has not been undertaken by the investor before.

Public sector initiatives are designed to address one or more of these risks. For example, the introduction of a carbon tax can increase the liabilities associated with conventional energy production, while regulatory initiatives such as a feed-in tariff (FIT) combined with the facilitation of long-term power purchase agreements (PPAs) for renewable energy, can substantially enhance the economics of investments in solar or wind energy projects by improving the level, predictability and sustainability of the cash flows from the investment. . Therefore, any focus on leveraging private sector finance needs to pay attention to the balance of the private sector’s assets and liabilities, and the underlying policies and regulations by which they are determined.

3.1.3 Types of Private Sector Financing Before considering private financing of climate change mitigation projects, it is useful to review the different types of private financing. A developer of a climate change mitigation project (such as, for example, a grid-connected renewable energy installation) can seek two types of private financing – debt and equity. Debt financing is generally provided by banks or financial institutions (FIs); equity financing, which may be in return for an ownership stake in the project or in the company implementing the project may be provided by private investors (there may also be some equity investment available from banks/FIs and from public sector funds).

3.1.4 Debt Financing Debt financing is considered less risky than equity financing, since in the case of “failure” of the project or insolvency of the project developer, the debt providers rank ahead of equity financiers in terms of receiving any available funds. Debt financing is therefore less expensive (in terms of interest costs) than equity financing. Equity providers consider their investments more risky and some such providers (such as venture capital funds) require high returns on their investments.

The types of debt financing from banks and financial institutions are illustrated in Box 3.1.



3.1.5 Equity Financing Sources for equity financing may include individual private investors, venture capital funds, private equity funds, pension funds and other funds such as infrastructure funds. Such investors may provide equity financing for individual projects or to the company (project developer) implementing the project. Depending on the type of business, the stage of development of the technology, and degree of risk associated, different types of equity investors will engage in different ways. For example:

Box 3.1 – Typical Debt Financing A. Corporate Lending: Banks provide finance to companies to support everyday

operations. An assessment is made of the company’s financial strength and stability, and debt is priced accordingly. These bank facilities place few restrictions on how the company can use the funds, provided certain general conditions are met.

B. Project Finance, or Limited Recourse Finance: Debt is borrowed for a specific project and the amount of debt made available will be linked to the revenue the project will generate over a period of time, as this is the means to pay back the debt. This amount is then adjusted to reflect inherent risks, e.g. the production and sale of power. In the case of a problem with loan repayment, rather like a typical mortgage, the banks will establish first ‘charge’ or claim over the assets of a business, as described above. The first tranche of debt to get repaid from the project is usually called ‘senior debt’.

C. Mezzanine Finance: As its name implies, this type of lending sits between the top level of senior bank debt and the equity ownership of a project or company. Mezzanine loans take more risk than senior debt because regular repayments of the mezzanine loan are made after those for senior debt, however, the risk is less than equity ownership in the company. Mezzanine loans are usually of shorter duration and more expensive for borrowers, but pays a greater return to the lender (mezzanine debt may be provided by a bank or other financial institution). A renewable energy project may seek mezzanine finance if the amount of bank debt it can access is insufficient: the mezzanine loan may be a cheaper way of replacing some of the additional equity that would be needed in that situation, and therefore can improve the cost of overall finance (and thus the rate of return for owners).

D. Refinancing: this is where a project or a business has already borrowed money but decides, or needs, to replace existing debt arrangements with new ones, similar to refinancing a mortgage. Reasons for refinancing include: more attractive terms becoming available in the market (perhaps as lenders become more familiar with the technology, meaning more money can be borrowed against the asset); or the duration of the loan facility, e.g. loans are often structured to become more expensive over time because of the increasing risk of changes to regulation or market conditions. One of the results of the financial crisis was that banks became extremely reluctant to lend for more than 6 or 7 years, which ‘forced’ projects that required longer-term loans, to refinance in the future, and take the risk of the terms available at that time.

Source: UNEP, Private Financing of Renewable Energy: A Guide for Policymakers, December 2009.



• Venture Capital providers will focus on ‘early stage’ or ‘growth stage’ (depending on how far from the laboratory and commercial roll out) technology companies;

• Private Equity Firms, which focus on later stage and more mature technology or projects, and generally expect to ‘exit’ their investment and make their returns in a 3 to 5 year timeframe;

• Infrastructure Funds, traditionally interested in lower risk infrastructure such as roads, rail, grid, waste facilities etc, which have a longer term investment horizon and so expect lower returns over this period;

• Institutional Investors such as Pension Funds have an even longer time horizon and larger amounts of money to invest, with lower risk appetite.

Most equity investors will use the Internal Rate of Return (IRR) of each project as the yardstick for reaching investment decisions. IRR is used to measure and compare the profitability of investments. Equity providers will generally have an expectation of the minimum IRR they need to achieve, known as a hurdle rate. The IRR can be considered to be equivalent to the earnings in the form of an annual rate of interest from an investment.

3.2 DEBT FINANCING FROM BANKS AND FINANCIAL INSTITUTIONS The most common and the largest source of financing for mitigation projects is debt financing from banks and financial institutions (FIs). Many of these banks/FIs are local organizations that provide debt financing to project developers. There are literally hundreds or thousands of such banks/FIs and it would not be useful to try to list all or even some of them. However, it is useful to consider dome international; banks/FIs that have made major commitments to financing climate change mitigation projects. Some of the most prominent among these are listed below. All of these banks have clear environmental or climate change policies and the majority have existing lending programs for renewable energy, led by the European banks that have substantial project financing activity in this area.47

• Bank of America (BoA) - In 2007, BoA launched a $20 billion, ten-year environmental initiative addressing climate change, including energy efficiency and clean energy investments & services, focused primarily on client offerings. About 90% of the funding is devoted to advisory services, market creation and project lending related to climate change.

• Dexia Bank – has recognized sustainable development at highest corporate level and has committed to renewable energy, Climate Change, and carbon neutral strategy for own emissions. Dexia was ranked second by New Energy Finance in international Clean Energy Project Finance (in terms of total deal value). In 2006, 58% of its energy-related project financing was on renewable energy.48

• Fortis Bank – also has made a commitment to the environment at the highest corporate level. There is an Environmental Board that reports to the main Board. The bank has developed a carbon neutral strategy for its own emissions, including energy saving and use of renewable energy. It has a very active and mature Renewable Energy Project Finance team, and currently has a portfolio of RE loans in the region of €500 million.

47 UNEP, Energy Efficiency and the Finance Sector: A Survey on Lending Activities and Policy Issues, May 2009. 48 REN 21, Renewable Energy Status Report 2011, http://www.ren21.net/



• Mizhuo Bank – has established a Sustainable Development Division within the Global Structured Finance Division, mainly for project finance and financial advisory business. Mizhuo is a signatory of the Equator Principles and is active with The Climate Group in the development of ‘Climate Principles. The main investment focus is renewable energy.

• Nedbank - Has a Board level Climate Change position statement which includes carbon management program, and commitment to developing innovative financing for clean energy. Nedbank has established specific energy intensity, carbon, and water reduction targets for the bank; and a cross-Departmental Environment Forum. Nedbank has signed a National Energy Efficiency Accord with the government and is pursuing various carbon finance and CDM activities, including energy efficiency projects.

• Yes Bank – is setting up South Asia Clean Energy Fund (SACEF) in collaboration with Global Environment Fund – a US Private Equity firm; and equity contribution from ADB. SACEF is raising a $300 million growth capital fund – for investing in clean energy opportunities across the region. The lending program is focused on off-balance sheet, limited or non-recourse financing.

3.3 PRIVATE FINANCING SOURCES FOR MITIGATION FINANCE

3.3.1 Introduction There has been increasing interest on the part of many private financing sources, including private equity funds, venture funds and pension funds in providing financing for climate change mitigation. Information on many of such financing sources is not readily available. The research conducted in this project led to the identification of 16 private financing sources for which information has been assembled in Appendix 2.

These financing sources represent the following types:

• Special funds created to mobilize and/or leverage private capital for mitigation finance, such as the Africa Enterprise Challenge Fund, Capital Market Climate Initiative, and Institutional Investors Group on Climate Change.

• Funds established by venture capital and private equity sources to target profitable investments related to climate change, including the China Environment Fund, FE Clean Energy Fund, FIDEME and EUROFIDEME II, MMA renewable Ventures, NEFCO Nordic Climate Facility, etc.

• Pension Funds, such as the California Public Employees Retirement System (CALPERS) and PGGM, the Dutch Pension Fund

• Other specialized sources such as Investors Group on Climate Change, the P8 group and X-Prize.

These private financing sources present a very interesting set of different funding sources, financing objectives and organizational structures.

Table 3.1 provides a summary of these funds. Brief descriptions are provided below.



Table 3.1 – Summary of Selected Private Financing Sources

FINANCING SOURCE TOTAL FUND SIZE MAJOR OBJECTIVES/ACTIVITIES

Africa Enterprise Challenge Fund: Renewable Energy & Adaptation to Climate Technologies

N/A Co‐funding of private investments for low cost, clean

energy for rural businesses and households

ATP Pension Fund €66 bill ionInvestments in renewable energy infrastructure and

technology

California Public Employees’ Retirement System (CalPERS)

$235 bill ionFostering energy savings, sustainable growth and

sound environmental practices

Capital Market Climate Initiative (CMCI) N/A Help unlock the private sector’s abil ity to help meet the $100 bill ion of new green investment required

annually by 2020 to tackle climate change

China Environment Fund (CEF) $300 millionFocus on cleantech and environment related

investments.

FIDEME and EUROFIDEME 2taregt fund €250

millioninvest in Greenfield assets and position itself as a partner for medium‐sized renewable energy projects

FE Clean Energy Group Inc. N/A Investments in the middle market energy efficiency services sector and in sustainable development.

Institutional Investors Group on Climate Change (IIGCC)

€6 tri l l ion Catalyse greater investment in a low carbon economy

Investor Network on Climate Risk (Managed by Ceres)

$10 tri l l ionIdentify opportunities and risks in climate change and

tackle related policy and governance issues

Investor Group on Climate Change Australia/New Zealand (IGCC)

Aus$700 bill ionEncourage government policies and investment

practices that address the risks and opportunities of climate change

Long‐term Investors Club $3 tri l l ionBring together major worldwide private financial institutions to fund climate mitigation projects

MMA Renewable Ventures (MMARV) $500 millionDeliver exceptional investment opportunities while providing competitively priced renewable energy and

energy efficiency products

NEFCO Carbon Finance and Environment Funds

€115 millionProvide loans and capital investments to generate positive environmental effects in the Nordic region.

PGGM (the Pension Fund for the Dutch healthcare sector)

€109 bill ionInvestment opportunities for its clients with a high Environment, Social and Governance (ESG) score

P8 Group $3 tri l l ionCreate viable investment vehicles to combat climate

change and promote sustainable development

X prize – Energy and Environment Prize Group N/A Generate breakthroughs in clean energy, climate

change, energy distribution/storage, energy efficiency/use, and water resource management



3.3.2 Special Private Sector Funds Africa Enterprise Challenge Fund The Africa Enterprise Challenge Fund (AECF) for Renewable Energy and Adaptation to Climate Technologies (REACT) is managed by the Alliance for a Green Revolution in Africa (AGRA). Its objective is to encourage private sector companies to compete for investment support for their new and innovative business ideas in the following countries of the East African Community (EAC): Burundi, Kenya, Rwanda, Tanzania and Uganda.

The AECF REACT will support private sector investment in the following:

• Increased access to low cost, clean energy for rural businesses and households. This includes cost effective renewable power, commercially viable renewable fuels and other clean energy alternatives.

• Products and services that help smallholder farmers adapt to climate change (e.g., drought resistant seeds and technologies or weather early warning systems that increase resilience and reduce vulnerability).

• Financial services that increase access to finance for low cost clean energy and climate resilient technologies or catalyze financial solutions such as weather insurance for smallholder farmers.

Funding from AECF is available to for-profit firms with business ideas implemented in the East African Community of Burundi, Kenya, Rwanda, Tanzania and Uganda. The funding is provided on a competitive basis in response to proposals submitted by private firms.

Capital Market Climate Initiative The Capital Market Climate Initiative has been established by the U.K. department of Energy and Climate Change and aims to help unlock the private sector’s ability to help meet new green investment required annually by 2020 to tackle climate change in developing countries.

The Initiative brings together experts from the financial and public sector to help deliver private climate financing at scale in developing countries by:

• identifying deliverable propositions to mobile private capital • developing a base of evidence build developing country interest and support • building private sector confidence in the feasibility of the task and opportunities.

The Initiative is developing a ‘toolkit’ of strategies that can be used to mobilize private capital in developing countries. It is also currently supporting demonstration capital mobilization projects in four developing countries.

The Steering Group and two Working Groups currently comprises of key decision makers from the UK government, institutional investors, investment banks, insurance companies, stock exchanges, credit rating agency, Development Finance Institutions, think tanks and professional services.

Institutional Investors Group on Climate Change (IIGCC) The Institutional Investors Group on Climate Change (IIGCC) has been established by The Climate Group and consists of a wide range of public and private organizations. One of the key objectives of the IIGCC is to catalyse greater investment in a low carbon economy by bringing investors together to use their collective influence with companies, policymakers and investors.



IIGCC focuses on Cleaner and renewable energy, energy efficiency and decarbonization. IIGCC membership is open to any institutional investor, including pension funds and asset managers, who align with the IIGCC’s overall aim, i.e. to ensure that the risks and opportunities from climate change are addressed in investment practices and decisions and to engage with policymakers, companies and investors to accelerate the shift to a low carbon economy.

The IIGCC currently has over 70 members, including some of the largest pension funds and asset managers in Europe,

The IIGCC encourages: Policymakers to provide policy frameworks that facilitate the move to a low carbon

economy and are consistent with long-term investment objectives. Investors to take on a pro-active approach on climate change through adapting their own

investment activities and processes in order to enhance and preserve long-term investment values.

Companies to standardise and improve disclosure on climate change and improve their performance.

3.3.3 Venture Capital and Private Equity Funds China Environment Fund China Environment Fund was established as the first fund in China with a focus on clean technologies and environment related investments. The investors in this fund include development financial institutions, renowned Chinese family offices, major financial institutions, and strategic multinational corporations including some Fortune 500 companies.

The Fund invests in private sector projects in renewable energy, energy efficiency, energy services, environmental protection, and air and water pollution control technologies.

The aggregate funding of three funds launched by the China Environment Fund has been $300 million.

FIDEME and EUROFIDEME 2 These two funds are European funds whose current investments are in renewable power generation projects primarily in solar photovoltaic, wind, hydro and biomass sectors. Their geographic focus to date has been on France, Italy and Spain.

The funds are managed by Natixis Environment & Infrastructures and invest in Greenfield assets and position themselves as partners for medium-sized renewable energy project developers including:

• Firms that develop projects with defined assets in their portfolio

• Developers having a portfolio of several projects in different development stages (development, construction, operation)

FE Clean Energy Group, Inc. The FE Clean Energy Group Inc. focuses on investments in the middle market energy efficiency services, renewable energy, and in return-driven sustainable development. Its geographic focus is on emerging markets in Asia, Central and Eastern Europe, and Latin America.



The current portfolio of FE Clean Energy includes private companies in Poland, Hungary, Mexico, China, India, Thailand, and Philippines in the following fields:

• small hydropower • energy efficiency • cogeneration • district heating • street lighting • biofuels • waste to energy

MMA Renewable Ventures MMA Renewable Ventures is a U.S. based firm that coordinates the financing, installation, and operation of renewable energy systems and energy efficiency projects. The company’s activities include:

• Identify qualified customers (minimum 250-300 kW system for solar, 3 MW for wind) • Perform site evaluation and initiate system approval process • Source and install equipment • Provide finished, fully operational system • Provide ongoing operations and maintenance services under contract

MMA finances, owns and operates the energy efficiency assets on behalf of its customers. Payments are made on the savings made at an agreed rate. At the end of the contract, the customer can choose to renew the contract or buy the assets. Its portfolio is about $500 million.

NEFCO Nordic Climate Facility The Nordic Climate Facility (NCF) finances projects that have a potential to combat climate change and reduce poverty in low-income countries. The Facility is financed by the Nordic Development Fund (NDF) and implemented jointly with the Nordic Environment Finance Corporation (NEFCO).

NCF encourages and promotes technological innovation in areas susceptible to climate change such as: energy, transport, water and sanitation, health, agriculture, forestry as well as other areas related to natural resource management. Once every year, NCF calls for innovative proposals comprising specific themes related to climate change. The best proposals may receive grant financing amounting to between €250,000 and 500,000, or, in exceptional circumstances, between €150,000 and 250,000.

Climate mitigation proposals can comprise efforts to reduce the emission of greenhouse gases by utilizing energy efficiency technologies, substituting fossil fuels for environmentally-sound renewable sources, and carbon sequestration. The climate change themes vary each year.

The countries covered by the NCF are

• Africa: Benin, Burkina Faso, Cape Verde, Ethiopia, Ghana, Kenya, Malawi, Mozambique, Rwanda, Senegal, Tanzania, Uganda, Zambia, Zimbabwe

• Asia: Bangladesh, Cambodia, Kyrgyz Republic, Lao PDR, Maldives, Mongolia, Nepal, Pakistan, Sri Lanka, Vietnam



• Latin America: Bolivia, Honduras, Nicaragua

3.3.4 Pension Funds Pension funds are now getting increasingly interested in financing climate change mitigation projects. Some of the pension funds active in this field include:

ATP Pension Fund The ATP Pension Fund is Denmark’s largest Pension Fund, and its investment department is responsible for managing assets worth more than DKK 400 billion. Consistent with its philosophy and strategy of ensuring the highest pension benefits attainable while avoiding needless risks, it has now started investing in renewable energy infrastructure and technology, such as solar wind and hydro, as well as emerging technologies, such as biofuels and biomass.

California Public Employees Retirement System (CALPERS) CALPERS is the largest institutional investor with USD 235 billion in assets. CALPERS has developed an Environmental Investment Initiative strategy with the goal to achieve positive financial returns while fostering energy savings, sustainable growth and sound environmental practices.

Consistent with the environmental goal, CALPERS is building a "best of breed," diversified portfolio of clean technology-focused investments by investing across stages, strategies, geographies, and structures. Environmental or clean technologies are considered as solutions that are more efficient and less polluting than existing or legacy products, services, or technologies. Areas of particular interest include, but are not limited to, alternative and renewable energy (clean energy), water technologies (clean water), advanced materials or nanotechnology (clean material), air purification technologies (clean air), and transitional infrastructure opportunities. Specific programs include:

• AIM Environmental Technology Program: CALPERS Environmental Technology Program Board targets investments in environmental technology solutions that are more efficient and less polluting than existing technologies such as recycling; minimizing the use of natural resources; and reducing emissions, refuse, and contamination to air, water, and land. The primary objective of the Program is to achieve attractive investment returns over the long-term and help catalyze clean technologies.

• Corporate Governance Environmental Strategy: CALPERS Board has adopted a plan to shine a light on corporate environmental liabilities, improve transparency and timely disclosure of environmental impacts, and improving environmental data transparency.

• CALPERS Public Market Environmental Managers: CALPERS Board is investing in stock portfolios that use environmental screens.

PGGM – Pension Fund of the Dutch Healthcare Sector

PGGM administers €109 billion of pension assets of more than 2.3 million Dutch participants PGGM looks for investment opportunities for its clients with a high Environment, Social and Governance (ESG) score, for example in sustainable forestry, climate projects, renewable energy infrastructure and “clean-technology” private equity.

PGGM has stated that “Sustainability is essential” is one of the main investment beliefs. PGGM believes that financial and social returns can be compatible objectives and, in the development and implementation of investment policy on behalf of its clients, takes account on a structural



basis of how investments may affect – and where possible improve – environmental and social conditions and corporate governance.

3.3.5 Other Private Sector Financing Sources Investor Network on Climate Risk

The Investor Network on Climate Risk (INCR) is a group of U.S. based investors that identifies opportunities and risks in climate change and tackles the policy and governance issues that impede investor progress towards more sustainable capital markets.

INCR has supported company dialogs on investor concerns ranging from sustainable homebuilding practices to disposal of coal ash.

INCR also engages in industry groups such as Electric power, insurance, Oil and gas, real estate, transportation and Water.

INCR also works with federal and state policymakers to strengthen regional and national legislation that would reduce carbon emissions and other pollution, protect water supplies and ecosystems and unlock financing for low-carbon energy sources and technologies like wind, solar and biofuels.

Investors Group on Climate Change The Investors group on climate Change is an Australia/New Zealand based organization that aims to encourage government policies and investment practices that address the risks and opportunities of climate change, for the ultimate benefit of superannuants and unit holders. The organization’s objectives are to:

• Raise awareness of the potential impacts, both positive and negative, resulting from climate change to the investment industry, corporate, government and community sectors

• Encourage best practices approaches to facilitate the inclusion of the impacts of climate change in investment analysis by the investment industry

• Provide information to assist the investment industry to understand and incorporate climate change into the investment decision.

Long-Term Investors Club

The Long-Term Investors Club aims to bring together major worldwide institutions including sovereign wealth funds, public sector retirement funds, private sector pension funds, economists, financial policy makers, and regulators to assert their common identity as long-term investors, to open the way to greater cooperation between us all and to deliver the message that fostering the right conditions for long-term investment will be an important element in promoting sustainable growth and economic stability.

The Club is now focusing on investments in improved transportation infrastructure, climate change, energy efficiency, renewable energy and urban development.

P8 Group

The P8 Group involves ten leading global pension funds and sovereign wealth funds, including representatives from Europe, Asia, Australasia and North America. The Group represents over $3 trillion of investment capital and as pension funds have an inherently long term focus. P8



brings together senior leaders from these world's largest public pension funds to develop actions relating to global issues and particularly climate change. P8 is an initiative of the Cambridge Program for Sustainability Leadership (CPSL) and HRH Prince of Wales’s Business and Environment Program (BEP), supported by the Environmental Capital Group (ECG) and the Nand & Jeet Khemka Foundation, to create viable investment vehicles to combat climate change and promote sustainable development,

The P8 Group Summits have been a critical part in getting pension funds to lead in the move toward climate change action. Participants agreed to continue working together to address climate change, both within their organizations and as a group to influence policy and markets. The aim of the members of the P8 Group is to build on their existing activities in the area of climate change by bringing together global representation from the sector to help to catalyze opportunities for further investment and to support the removal of barriers to large-scale capital deployment. By focusing on developing opportunities for investments into climate solutions, the P8 aim to develop a momentum in the capital markets towards these investments.

X-Prize – Energy and Environment Prize Group

The X-Prize Foundation is an educational nonprofit organization whose mission is to bring about radical breakthroughs for the benefit of humanity, thereby inspiring the formation of new industries and the revitalization of markets that are currently stuck due to existing failures or a commonly held belief that a solution is not possible. The Foundation addresses the world’s Grand Challenges by creating and managing large-scale, high-profile, incentivized prize competitions that stimulate investment in research and development worth far more than the prize itself. It motivates and inspires brilliant innovators from all disciplines to leverage their intellectual and financial capital.

One of the X-Pries is in the Energy & Environment Prize Group where the goal is to generate breakthroughs in clean energy, climate change, energy distribution/storage, energy efficiency/use, and water resource management. Advances in these fields will lead to greater sustainability and efficiency, while reducing our dependence on fossil fuels.

The Group has completed a $10 million automotive prize competition to develop a new generation of viable, safe, affordable and super fuel efficient vehicles, and a $1.4 million prize for oil cleanup. Future prize competitions are likely to include areas such as carbon utilization, aviation battery, energy awareness, home energy storage, featherweight solar and wind, race to zero CO2, and residential waste to energy.



3.4 PRIVATE SECTOR CARBON FINANCE With the increased activity in nth emissions trading and carbon markets over the last several years, a number of private sector organizations are providing financing by purchasing carbon credits. An illustrative list of such organizations is provided below:

Asia Carbon Group and the Asian Carbon Exchange The primary objective of Asia Carbon Group is to mitigate global climate change and initiate sustainable development through the application of the Kyoto Protocol financial mechanisms in particular the Clean Development Mechanism (CDM), Joint Implementation (JI) and Emissions Trading. In addition to carbon financing, the Group is now establishing a trading platform - the Asia Carbon Exchange and also the Asia Carbon Fund for the purposes of investing in sustainable development projects globally. It is further planning to launch an exchange in Japan that will enable utilities to gain better access to carbon reduction projects.

Carbon Credit Capital Carbon Credit Capital LLC, a renewable energy financial services and project development company, uses carbon finance to catalyze greenhouse gas reduction projects. It focuses on the investment in carbon-credit-generating renewable energy projects, as well as involves in developing sustainable carbon credits and managing risk. The company partners with project developers to facilitate offset creation and sells offsets to large emitters, banks, and other interested buyers. Its projects include municipal, forestry, livestock, bioenergy, renewable energy, and microcredit. The company serves developers and buyers in Europe, the United States, and India.

Carbon Positive Carbon Positive arranges and manages sustainable-development projects that reduce greenhouse-gas emissions in developing countries. These projects are designed to generate Certified Emissions Reductions (CERs) under the Kyoto Protocol Clean Development Mechanism. Its website provides useful information ranging from generic information on climate change to the details of the Kyoto Protocol, carbon markets and company news.

C-Quest Capital C-Quest Capital (CQC) is a carbon finance business dedicated to originating and developing high-quality emission reduction projects around the world. The company invests in carbon assets that generate superior returns and concrete benefits to the environment. CQC is headquartered in Washington, D.C. with offices in Australia and Malaysia and a presence in India.

CQC aims to use its competency in environmental markets and finance to accelerate the global transition to a low-carbon economy and foster sustainable development. The company brings not only for the technical expertise to the investments, and maintains high standards of integrity to ensure that the projects make real contributions to reducing greenhouse gas emissions.

Evolution markets Evolution Markets works closely with buyers of carbon credits to assess their carbon offset needs, determining risk level relative to carbon regulation or voluntary commitments to reduce greenhouse gas emissions. The company also helps clients put in place offset strategies that may leverage carbon credits under the CDM and JI, or using verified emissions reductions (VERs) available in the voluntary carbon market. Evolution Markets can facilitate the acquisition of



carbon credits on behalf of buyers and assist clients in efficiently executing transactions in various global carbon markets that meet defined strategic objectives.

ICEcap Ltd. ICECAP is a private sector provider of emissions credits from developing world CDM & JI projects in the emissions trading markets. In March 2004, the ICECAP Carbon Portfolio was launched, one of the world’s first private sector carbon hedging vehicles. This reached first closing on 17th January 2006 with aggregate commitments of 15 million tonnes. In addition, ICECAP has developed a track record in Certified Emissions Reduction transactions through its trading business.

Sindicatum Sustainable Resources Sindicatum Sustainable Resources (formerly Sindicatum Carbon Capital) is a global sustainable resources company headquartered in Singapore. Sindicatum is an operator of clean energy projects worldwide and producer of sustainable resources from the utilization of natural products and waste. Sindicatum was founded in 2005 and its key strategic shareholders include Citigroup Venture Capital International, American International Group (through its member company AIG Global Investment Group) Black River Asset Management, and Gulf One Bank BSC. Sindicatum moved its headquarters from London to Singapore in 2009 to be closer to its assets, most of which are in Asia. Sindicatum uses its own expertise and capital to develop climate change mitigation projects from conception through to implementation and long-term operation, working in partnership with companies and governments to deliver cost effective means by which to reduce greenhouse gas emissions. Areas of specialization include abating GHG emissions from the waste management and natural resource sectors, as well as biomass and energy efficiency applications.



SECTION 4

PUBLIC-PRIVATE PARTNERSHIPS FOR FINANCING MITIGATION ACTIONS



SECTION 4 – PUBLIC-PRIVATE PARTNERSHIPS FOR FINANCING MITIGATION ACTIONS

4.1 PUBLIC-PRIVATE PARTNERSHIPS The large investments required to meet climate change mitigation goals need large-scale mobilization of both public and private financing sources. There has been increasing attention to development of appropriate public policies and initiatives that will leverage increased private investments in climate change mitigation financing. The concept of public-private partnerships has emerged as a promising mechanism.49

Multilateral and bilateral financial institutions as well as national development banks have mobilized resources to global capital markets to support lending in developing countries. Partnerships with private donors have also helped raise concessional flows for lower income countries, and for global programs. Fund-raising through partnerships helps broaden the base of support for development among private sector actors. On the ground, PPPs enable governments in developing countries to leverage private flows to fill funding gaps, transfer service delivery risks, and improve the cost effectiveness of service delivery. They employ a range of financial instruments beyond loans and grants in leveraging private flows.

Public-private partnerships (PPPs) have used in a number of other sectors. Generally, a PPP is a venture or service that is funded and operated through a partnership of government and one or more private-sector organizations. The concept of PPPs has been popular since the early 1990s, and there are many different PPP models.50 The range of structures used for PPPs varies widely: in some countries, the concept of a PPP equates only to a concession where the services provided under the concession are paid for by the public; in others, PPPs can include every type of outsourcing and joint venture between the public and private sectors.

A recent IEA study on Energy Efficiency Governance pointed out the importance of engaging the private sector in implementing energy efficiency policy and programs (which are key elements of climate change mitigation strategies). That study defined the concept of public-private partnerships as “voluntary efforts in which government and the private sector collaborate to analyze public policy problems and jointly implement solutions. Public-private partnerships work most effectively when they focus on a specific issue or problem (i.e. are programmatic), involve broad engagement with private-sector entities, and include some form of co-financing on technology or concept development or demonstration”.51

4.2 PPPS FOR FINANCING CLIMATE CHANGE MITIGATION As climate change mitigation has become one of the highest priorities of governments, the public sector has become increasingly aware of the specific barriers related to development, financing and implementation of climate change mitigation projects. Mitigation technologies require

49 The World Bank, Innovative Development Finance: From Financing Sources to financial Solutions, June 2009 50 European Investment Bank, Public-Private Partnerships in Europe: Before and During the Recent Financial Crisis,

July 2010 51 International Energy Agency, Energy Efficiency Governance, 2010.



substantial funding, particularly when they rely on new or emerging technologies, and the governments may not have the ability to invest and tie up large amounts of public funding for projects with long pay-back profiles. The partnering of the government with local financial institutions (LFIs) and other private financing sources enables the structuring of PPPs to deliver market-oriented instruments that target specific market barriers, without the need for direct government subsidy programs. PPPs can allow governments to mobilize funding for their climate change mitigation programs with only a fraction of the public funding that would otherwise be required, with the private sector taking on some of both the financial and performance risks.

A recent study conducted by the International Energy Agency focused on PPPs for financing energy efficiency programs.52 In that effort, the characteristics of PPP were defined as follows:

• a contractual relationship (or formal agreement) between a public entity and a private organization

• allocation of risks between the public and private partners consistent with their willingness and ability to mitigate risks, in order to encourage the private partner to mobilize financing;

• mobilization of increased financing

• payments to the private sector for delivering services to the public sector.

4.3 PPPs IN ENERGY EFFICIENCY FINANCING The IEA study documented 3 types of PPPs for energy efficiency (EE) financing that are relevant for other types of climate change mitigation projects:

• Dedicated credit lines: Credit lines established by a public entity (such as a government agency and/or donor organization) to enable financing of EE projects by a private-sector organization (bank or financial institution). Generally, the private-sector bank or financial institution provides additional financing (co-financing) for the EE projects.

• Risk-sharing facilities: Partial risk or partial credit guarantee programs established by a public entity (such as a government agency and/or donor organization) to reduce the risk of EE project financing to the private sector (by sharing the risk through a guarantee mechanism), thereby enabling increased private-sector lending to EE projects.

• Energy Saving Performance Contracts (ESPCs): Public-sector initiatives, in the form of legislation or regulation, established by one or more government agencies to facilitate the implementation by ESCOs of energy performance-based contracts for improving EE in the public sector using private-sector financing.

Table 4.1 illustrates the characteristics of these three types of PPPs.

52 International Energy Agency, Policy Pathway: Public-Private Partnerships for Energy Efficiency Financing, 2011



Table 4.1 – Characteristics of PPPs for Financing Energy Efficiency

Type of PPP

Brief Description

PPP Features

Agreement between Public and Private Entities

Allocation of Risk between Partners

Mobilization of Private Sector Financing

Payment to Private Sector for Providing Services

Dedicated Credit Lines

Mechanism under which governments or donors provide low‐interest loans to LFIs to encourage them to offer sub‐loans to implementers of EE projects

Loan agreement between partners

Project financing risk shared between partners

Private partner generally provided co‐financing

LFI earns fee by on‐lending funds at higher interest

Risk‐Sharing Facilities

Mechanism where governments or multilateral banks offer guarantee product to absorb some EE project risks and encourage involvement of LFIs in EE financing by reducing their risk

Guarantee Facility Agreement (GFA)

Public partner absorbs some financial risk

Mobilizes additional private sector financing by risk reduction

LFI earns interest on additional loans mobilized

Energy Saving Performance Contracts (ESPCs)

ESCO enters into term agreement with public agency to provide services, with payments contingent on demonstrated performance

Energy services Agreement (ESA)

Performance risk generally borne by ESCO

ESCOs mobilize private‐sector financing

Performance‐based payment to ESCO

Source: International Energy Agency, Policy Pathway: Public-Private Partnerships for Energy Efficiency Financing, 2011

4.4 LEVERAGING PRIVATE CAPITAL THROUGH PPPs The three types of PPPs for financing EE projects leverage private sector investment in different ways. The findings of the IEA study of PPPs in EE finance conclude the following:

• Dedicated credit lines utilize government, international financial institutions (IFIs) or donor agency funds to leverage an increase in lending by local banks and financial institutions (referred to as local financial institutions or LFIs) for EE projects. They address the issue of insufficient (or non-existent) lending to EE projects due to the lack of knowledge and understanding on the part of LFIs of the characteristics and benefits of such projects. By providing funds to these local financial institutions (generally at a low interest rate), the public partner gives an incentive to them to on-lend funds for EE projects. Because the on-lending is at a higher interest rate than the interest on the funds provided by the government or IFI, the LFIs can make a profit on the loan transactions.



The agreement between the public and private partners generally requires the LFI to co-finance the loans, thereby leveraging and increasing the amount of financing available.53

• Risk-sharing facilities address the perception of LFIs that EE projects are more risky than their conventional lending. Such a perception of high risk prevents the LFIs from large-scale commercial financing of EE projects. Under the risk-sharing facility, the public agency provides a partial guarantee that covers a portion of the loss due to loan defaults. By sharing the risk, the public partner reduces the risk to the private-sector LFI, thereby motivating the LFI to increase its lending to EE projects.54

Both dedicated credit lines and risk-sharing facilities also include technical assistance and capacity building for the LFIs to increase their knowledge and understanding of EE projects, create greater interest on their part to increase lending to such projects, and help them identify and manage project risks and opportunities.

• ESPCs address a number of barriers related to implementation of EE projects in the public sector. Under the ESPC concept, energy service companies (ESCOs) or other types of energy service providers provide a broad range of services, including providing or arranging commercial financing, to public agencies, industries, housing associations etc. under a performance-based agreement, in which guarantees are provided for the energy savings achieved. In the context of PPP we are concerned with ESPCs relating to implementation of EE in the public sector. Payments are made in the PPP case by the public agency to the ESCO only upon the satisfaction of the guarantees, thereby eliminating much of the technical and performance risk from the agency.55

4.5 BONDS AND DEBT PRODUCTS Since their inception, multilateral and national development banks have leveraged private funds on the world’s financial markets to help finance country level development efforts. Between 1995 and 2008, these development banks raised a total of US$1.35 trillion in proceeds on the capital markets, of which IBRD and IFC accounted for approximately US$235.4 billion. World Bank bonds and debt products, issued by IBRD, provide investors with the reassurance of an AAA credit rating, a wide choice of products, and strong secondary market performance for liquid World Bank benchmark bonds.

Some bilateral donors, such as Germany and France, have raised funds on their domestic capital markets, through their national development banks, to fund bilateral aid programs. Both countries make substantial use of loans as part of their ODA. For instance, KfW has sought to “expand the scope of development cooperation by combining federal budget and capital market funds.” In 2007 alone, contributions of KfW’s bonds and own funds reached 20 percent of Germany’s ODA commitments in 2007.

These types of bonds and debt products are now increasingly being targeted for financing climate change mitigation projects. The proceeds from the World Bank Green Bonds provide some degree of

53 See, for example, The World Bank, Project Appraisal Document on a Proposed Loan in the Amount of US $200

Million and a Proposed Grant from the Global Environment Facility Trust Fund in the Amount of US $13.5 Million to the People’s Republic of China in Support of the Energy Efficiency Financing Project. April 2008.

54 Mostert, Wolfgang, Publicly-Backed Guarantees as Policy Instruments to Promote Clean Energy, UNEP – Sustainable Energy Finance Alliance, 2010

55 Jas, Dilip R. Limaye, Brian Henderson, and Xiaoyu Shi, Public Procurement of Energy Efficiency Services, The World Bank, 2010



earmarking in order to demonstrate the linkage between resources mobilized and specific World Bank projects that support climate change mitigation and adaptation. World Bank Cool Bonds offer the additional benefit of paying a portion of its returns based on the fast-growing market for CERs in China and Malaysia.

Examples of some of these instruments are provided below:56

• World Bank Eco Notes are six-year euro-denominated notes with a coupon of 3 percent, plus a potential additional return linked to an ABN-Amro index of “green” equities. The notes raised funds for IBRD at attractive rates, while raising awareness for funding “green” activities, at the same time that the hedging activities of IBRD’s swap counterparties also supported capital available to companies in the index. ABN-Amro and Fortis Bank distributed the notes in the Netherlands, Switzerland, and Belgium, primarily to retail investors. Proceeds were used in the general operations of IBRD.

• World Bank Cool Bonds are five-year, US$-denominated notes paying a coupon of 3 percent for an initial period, and a variable coupon amount for the remaining maturity of the note tied CERs generated by specified greenhouse gas (GHG) reducing projects in China and Malaysia. Hedging exposure to CERs by IBRD counterparties contributes to expansion of this market as well. Daiwa Securities and Mitsubishi Securities distributed the notes to Japanese investors. Proceeds were used in the general operations of IBRD.

• World Bank Green Bonds are 6-year, Swedish kronor notes paying investors a 3.5 percent annual interest rate and raising funds at a spread of 0.25 percent over comparable maturity Swedish government paper. They enabled IBRD to raise funds at an attractive cost despite the challenging market environment. Skandinaviska Enskilda Banken (SEB) underwrote the issue and distributed mainly to Scandinavian institutional investors, who were attracted to the investment because the proceeds would be credited to a special account at IBRD that supports World Bank loan disbursements on qualifying climate change mitigation and adaptation projects.

4.6 OTHER EXAMPLES OF PPPS This project has identified a number of other types of PPPs. Some of these PPPs have been established for the creation of special funds for climate change mitigation or for carbon funds while others have been established under private sector initiatives. Many of these have been discussed in previous Sections. Some examples are provided below:

4.6.1 Special Funds for Climate Change Mitigation Examples of public-private partnerships for establishment of special funds for climate change mitigation include the following:

• The BNDES Amazon Fund is combining funds from NGOs and private investors along with funds from the Brazilian government and the Governments of Norway and Germany.

• The Bulgaria Energy Efficiency Fund (BEEF) was established by the World Bank in cooperation with the GEF and the Austrian Government, and utilized a private sector fund management team. BEEF also encouraged private FIs to participate in co-financing.

56 Extracted from The World Bank, Innovative Development Finance: From Financing Sources to financial

Solutions, June 2009



• The E&Co CAREC fund is a venture capital facility that is a unique partnership among a private organization (E & CO.) and multilateral and bilateral financial institutions.

• The Renewable Energy and Energy Efficiency Partnership (REEEP) is comprised of more than 350 partners including 45 governments as well as a range of private companies and international organizations.

4.6.2 Carbon Funds The following carbon funds have utilized the PPP concept:

• EIB Post-2012 Carbon Credit Fund is a partnership between the European Investment Bank, Conning Asset Management (Europe) Limited, its investment manager, and First Climate, its investment advisor.

• The Multilateral Carbon Credit Fund represents a partnership among the multilaterals EIB and EBRD, EBRD member states, sovereign participants including the Governments of Finland, Belgium (Flanders), Ireland, Luxembourg, Spain and Sweden, and private participants CEZ (Czech Republic), Endesa (Spain), Gas Natural (Spain), PPC (Greece), Union Fenosa (Spain) and Zeroemissions (Spain).

• The World Bank Carbon Partnership Facility includes the Governments of Spain, Norway and Sweden, and the private organizations Endesa SA and E.ON Carbon Sourcing North America LLC.

4.6.3 Private Sector Funds Some of the private sector focused funds get a portion of their core funding from MFIs and/or BFIs and leverage this with private funds to provide financing for private sector projects. Examples include:

• The Africa Enterprise Challenge Fund is operated privately and focuses exclusively on financing private sector projects but gets some of its funding from donors (including the Swedish International Development Agency).

• The Capital Market Climate Initiative (CMCI) was launched by the U.K. Department of Energy and Climate Change and partners with private investors to the mobilize private sector capital to help meet the new green investment requirements to tackle climate change in developing countries.

• The Institutional Investors Group on Climate Change (IIGCC) represents a unique public-private partnership organized by The Climate Group to catalyse greater investment in a low carbon economy.

• The Long-Term Investors Club is a partnership among the Caisse des Dépots, a French investment group, and three European public financial institutions – Cassa Depositi e Prestiti, KfW Bankengruppe, and the European Investment Bank.

• The NEFCO Environment Fund has been established by the governments of Nordic countries and operated by a private entity to leverage private investments in climate change related projects.

Table 4.2 summarizes these PPPs.



Table 4.2 – Examples of Public-Private Partnerships

PUBLIC‐PRIVATE PARTNERSHIP PUBLIC PARTNERS PRIVATE PARTNERS

BNDES Amazon Fund Governments of Brazil, Norway and GermanyPrivate investors from Brazi la nd other

countries

Bulgaria Energy Effcieincy Fund World Bank, GEF and Austrian GovernmentPrivate sector fund management consortium and local financial institutions in Bulgaria

E&Co. CAREC FundVarious multilateral and bilateral financial

institutionsE & Co.

Renewable Energy and Energy Efficiency Partnership (REEEP)

45 government and international otganizations

Large number of private organizations

EIB Post‐2012 Carbon Credit Fund European Investment Bank Conning Asset Management (Europe) Limited

Multilateral Carbon Credit Fund EIB, EBRD, Governments of Finland, Belgium (Flanders), Ireland, Luxembourg, Spain and

Sweden,

CEZ (Czech Republic), Endesa (Spain), Gas Natural (Spain), PPC (Greece), Union Fenosa

(Spain) and Zeroemissions (Spain).

World Bank Carbon Partnership Facil ity World Bank and Governments of Spain,

Norway and SwedenEndesa SA and E.ON Carbon Sourcing North

America LLC.

Africa Enterprise Challenge Fund Donors agencies including the Swedish International Development Agency

All iance for a Green Revolution in Africa (AGRA)

Capital Market Climate Initiative (CMCI)U.K. Department of Energy and Climate

ChangeBroad range of private investors

Institutional Investors Group on Climate Change (IIGCC)

Public sector members of The Climate Group Private sector members of The Climate Group

Long‐Term Investors ClubCassa Depositi e Prestiti, KfW Bankengruppe,

and the European Investment BankCaisse des Dépots, a French investment group

NEFCO Environment Fund Nordic Government AgenciesPrivate sector fund operator and private

investors

SPECIAL FUNDS FOR CLIMATE CHANGE MITIGATION

CARBON FUNDS

PRIVATE SECTOR FUNDS



SECTION 5 KEY ELEMENTS OF PROJECT PROPOSALS AND GUIDELINES FOR

PREPARATION



SECTION 5 - KEY ELEMENTS OF PROJECT PROPOSALS AND GUIDELINES FOR PREPARATION

5.1 OVERVIEW Countries interested in obtaining financing for climate change mitigation projects need to understand the specific requirements of the financing sources that they may be seeking assistance from. In the case of most MFIs and BFIs, the climate change mitigation projects are negotiated between the financing source and the recipient country. However, in order to get the needed approvals from the appropriate authorities (such as the Board of Directors), formal and detailed project proposals have to be prepared. While the MFIs and BFIs often participate in the preparation of such proposals, or in some cases, provide technical assistance through third parties, the recipient country is responsible for the preparation of the proposals.

In the case of the special funds for climate change mitigation and carbon funds, each fund has certain specific requirements for the project proposals and most will evaluate proposals from different project proponents using a competitive process (since funds are limited and there are more potential projects and recipients than there funds to support them. Therefore the preparation of high quality proposals responsive to the requirements identified by the funds is a critical factor for a successful application for financing.

This Section addresses the key elements of a project proposal and provides some guidelines for proposal preparation.

5.2 KEY ELEMENTS OF PROJECT PROPOSALS

5.2.1 Proposals to MFIs and BFIs The specific project requirements of the MFIs and BFIs may vary somewhat, but they generally need the proposers to provide detailed information that is fairly common across the different funding sources. The information provided in this Section is developed from the requirements of the Global Environment Facility (GEF), which is arguably the largest financing source for climate change mitigation projects and the World Bank, which is representative of the various MDBs operating across the world.

GEF provides grants for climate change mitigation projects and requires the preparation of a Project Information Form (PIF) for each grant proposal submitted for approval. The World Bank provides loans to governments and requires the preparation of a Project Concept Note (PCN) for each project. The requirements of these two documents are similar although the formats in which the proposal information is submitted are quite different. It should be noted that the World Bank often serves as an implementation agent for a GEF grant which may be co-financing a World Bank loan. In such cases, the GEF PIF is the overriding document.

Both the PIF and the PCN essentially represent preliminary proposals and once these are approved, a more detailed project appraisal is conducted leading to a Project Appraisal Document (PAD). The PAD has a much more detailed documentation of the project.



5.2.2 General Proposal Requirements In general, the financing sources will require the following type of information in a proposal:

• Basic definition of the project • Definition of how the project is consistent with the strategic objectives of the financing

source • Project rationale defining why it is being undertaken • Specific project objectives • Project costs, amount to be financed from the proposed source, and =the amount and

sources of other financing available • Definition of the baseline conditions in the absence of the project, including key issues,

barriers and challenges • Description of project tasks or components • Identification of how the project activities will address the key issues, barriers and

challenges and move beyond the baseline conditions to produce beneficial results for climate change mitigation

• Statement of project results and benefits and results, including quantification of the climate change benefits

• Definition of risks, their potential impacts on project results and the proposed risk management plan

• Description of project implementation and management plan • Definition of project measurement reporting and verification methodology

5.2.3 Illustrative Detailed Requirements - GEF PIF As indicated above, the proposal requirements identified above are generally applicable, but individual financing sources may have somewhat different requirements or specific formats. This section provided detailed example of the requirements for the preparation of a Project Information Form (PIF) for financing proposals to the Global Environment Facility (GEF).

The preparation of a GEF PIF will typically require the following information:

• Project Identification –This includes the project title, country of focus, GEF Focal Area addressed by the project, implementing agency designation (GEF generally works through the MDNs or agencies of the UN as implementing agents), project submission date and project duration, and the fees charged by the implementing agency.

• Relationship of Project to the GEF Strategic Framework57 – This is a very important requirement wherein the proposal is required to define the focal area, the expected project outputs and outcomes as they relate to the GEF focal areas,58 funding requested from GEF, and the amount of co-financing secured (Note that GEF generally requires a substantial amount of co-financing, which may be in cash or in kind). This information is to be submitted for each GEF Focal Area covered by the project. In this part it is expected

57 Global Environment Facility, GEF-5 Focal Area Strategies, 2011. 58 The GEF Focal Areas in the current (5th) funding cycle are: biodiversity, climate change, international waters,

land degradation (desertification and deforestation), chemicals, sustainable forest management, and cross-cutting capacity development.



that the proposal will define the specific outcomes in terms of GEF objectives (such as the number of tons of GHG emissions reduced) for each GEF Focal Area.

• Project Framework – This part provides a description of the project objectives, major components and sub-components, project outcomes and outputs for each of these, and the GEF financing and project co-financing by each component and sub-component. The total project costs including project management costs are also to be provided.

• Details of Co-Financing – The proposal needs to define the various sources of co-financing, and the type of co-financing and amount of co-financing from each source. The co-financing sources may include any leveraged funds (for debt and/or equity financing) from the private sector.

• Project Justification – The justification should include a narrative description of how the project is consistent with the specific objectives outlined in the GEF Focal Area Strategies document, as well as a statement of how the project relates to the country’s national strategies and plans in the relevant areas.

• Description of the Baseline – In this part of the PIF, the proposal needs to define the conditions in the country and the problems or needs that the project is trying to address. It may define the barriers to implementation of the climate change mitigation project(s) and define what is currently being done (if anything) to overcome these barriers. This description of “baseline” conditions is very important as the GEF will assess what results will be accomplished by the funding provided that will be beyond the baseline.

• Incremental or additional Activities to be Financed – This section needs to describe in detail the activities planned to be undertaken using the funds provided by GEF that will be incremental or additional to the baseline defined earlier. This section of the proposal will generally describe in detail the tasks, activities and expected outputs and define how these outputs will be achieved. It is also important in this section to demonstrate how these activities and outputs will allow the country to move beyond the baseline conditions.

• Definition of Socio-Economic Benefits – The proposal needs to define the socio-economic benefits that will be delivered by the project at the national and local levels, including consideration of gender dimensions, and how these will support the achievement of global environment benefits, including climate change mitigation.

• Risks and Risk Management – The proposal needs to identify the risks, assess the magnitude and importance of each risk, define the impact of each risk on the achievement of the desire outcomes and outputs, and identify how these risks will be mitigated or managed.

• Key Stakeholders – the proposals have to identify the stakeholders involved in the project including the private sector, civil society organizations, and local and indigenous communities, and describe their respective roles.

• Cooperation and Coordination – This part of the proposal requires identification of other ongoing programs, projects or initiatives, funded by donor agencies, the national government and/or the private sector, which may be related to the activities and outputs of the proposed project. To the extent such activities exist, the proposal must define how



the project will cooperate and coordinate its activities with these projects and avoid or minimize overlap or duplication.

• GEF Implementing Agency – it is required by GEF to define why the proposal has selected the particular implementing agency and what comparative advantages or benefits are brought forth by this agency.

• Description of Co-Financing – This section requires a narrative description of the various sources of co-financing and a statement of the type and amount of co-financing each will provide.

• Project Implementation – This final section defines how the selected implementing agency plans to manage and implement the project. It includes a statement of how the project fits into the GEF agency’s program and the staff capacity in the country to follow up project implementation.

• Monitoring and Evaluation – The proposal needs to present an adequate plan for monitoring and evaluation of the project results. While the GEF will generally conduct an independent evaluation of the project upon its completion, it needs to assure that appropriate monitoring is being conducted to obtain and document the information needed for project evaluation.

The proposal must also include a statement of approval or endorsement by the country’s GEF Operational Focal Point (which is usually the Ministry of Finance or the ministry of the Environment.

5.3 EVALUATION OF THE FINANCING PROPOSALS Most financing sources will use a formal evaluation process to examine the proposals and evaluate whether they meet the objectives and requirements of the financing organization. Again, these evaluation criteria and procedures will vary from one source to another, and the individuals and organizations preparing the country proposals need to review these to assure that their proposal meets the criteria.

In this regard, it is useful to review the evaluation checklist used by GEF to review and assess each proposal. Table 5.1 provides this checklist, which includes 28 questions.

5.4 DEVELOPMENT OF THE BASELINE A very important element of a proposal for financing climate change mitigation project or program is the development of a credible baseline scenario. Essentially the baseline defines the market conditions in the absence of the project. The reason this definition is important is that the financing sources are interested in determining what will the effect of their financial contributions. The benefits of the project will be the net difference between what would happen in the absence of the project and what is expected to happen when the project is implemented. It is this net reduction in climate impacts that are attributable to the financing provided to the project and the financing institutions are interested in assuring that their funds are being used efficiently and effectively to produce net benefits that are substantial relative to the financing provided.

Many financing sources are now starting to define criteria to relate the amount of financing to the mitigation results. For example, GEF is interested in the ratio of dollars per ton of GHG emission reductions. Most GEF projects are required to calculate and report $ per ton of CO2 equivalent.



Table 5.1 – GEF Proposal Evaluation Checklist

Source: Global Environment Facility

1 Is the participating country eligible?2 Has the operational focal point endorsed the project?3 Is the Agency's comparative advantage for this project clearly described and supported? 4 If there is a non‐grant instrument in the project, is the GEF Agency capable of managing it?5 Does the project fit into the Agency’s program and staff capacity in the country?

6 Is the proposed Grant (including the Agency fee) within the resources available from the GEF sources

7 Is the project aligned with the focal /multifocal areas/ LDCF/SCCF/NPIF results framework?8 Are the relevant GEF 5 focal/ multifocal areas/LDCF/SCCF/NPIF objectives identified?

9Is the project consistent with the recipient country’s national strategies and plans or reports and assessments under relevant conventions, including NPFE, NAPA, NCSA, or NAP?

10Does the proposal clearly articulate how the capacities developed, if any, will contribute to the sustainability of project outcomes?

11Is (are) the baseline project(s), including problem (s) that the baseline project(s) seek/s to address, sufficiently described and based on sound data and assumptions?

12Has the cost‐effectiveness been sufficiently demonstrated, including the cost‐effectiveness of the project design approach as compared to alternative approaches to achieve similar benefits?

13Are the activities that will be financed using GEF/LDCF/SCCF funding based on incremental/ additional reasoning?

14 Is the project framework sound and sufficiently clear?

15Are the applied methodology and assumptions for the description of the incremental/additional benefits sound and appropriate?

16Is there a clear description of: a) the socio‐economic benefits, including gender dimensions, to be delivered by the project, and b) how will the delivery of such benefits support the achievement of incremental/ additional benefits?

17Is public participation, including CSOs and indigeneous people, taken into consideration, their role identified and addressed properly?

18Does the project take into account potential major risks, including the consequences of climate change and provides sufficient risk mitigation measures? (i.e., climate resilience)

19Is the project consistent and properly coordinated with other related initiatives in the country or region?

20 Is the project implementation/ execution arrangement adequate?

21Is the project structure sufficiently close to what was presented at PIF, with clear justifications for changes?

22 If there is a non‐grant instrument in the project, is there a reasonable calendar of reflows included?23 Is funding level for project management cost appropriate?

24Is the funding and co‐financing per objective appropriate and adequate to achieve the expected outcomes and outputs?At PIF: comment on the indicated co‐financing; At CEO endorsement: indicate if confirmed co‐financing is provided.

26 Is the co‐financing amount that the Agency is bringing to the project in line with its role?

27Have the appropriate Tracking Tools been included with information for all relevant indicators, as applicable?

28Does the proposal include a budgeted M&E Plan that monitors and measures results with indicators and targets?

GEF EVALUATION CHECKLIST

25



Similarly, KfW is now requiring calculation of the expected emission reductions per million Euros invested in its energy efficiency projects.

It should be noted that the baseline does not involve simply documenting the conditions before the start of the project implementation. While this documentation is necessary, it is not sufficient, because most climate change mitigation projects are multi-year projects and their beneficial impacts occur over a long period. To calculate the net benefits from a mitigation project, the baseline scenario must develop a projection of the conditions that would prevail in the absence of the project implementation. This requires the proposing country to develop a forecast of the climate impacts in the absence of the project, rather than simply document the conditions prior tom project start. The financing institutions reviewing and evaluating the proposal is likely to make a careful assessment of the baseline scenario to develop the estimates of the incremental benefits. It is therefore important to prepare the baseline scenario professionally and document all the important assumptions.

For example, if the mitigation project related to implementation of a renewable energy power plant to replace a conventional fossil fuel plant, the baseline scenario needs to develop a credible projection of the power system characteristics for the duration of the life of the renewable energy project. If the local electric utility is planning to change its generation mix, this should be taken into account in the baseline projection. The proposal then needs to show exactly what resources are being replaced by the renewable plant to calculate the climate change benefits. The incremental benefits will be the difference in GHG emissions from the power system with and without the new facility.

Similarly, for an energy efficiency project, the baseline scenario needs to estimate the implementation of the proposed energy efficiency measures in the absence of the program over the time horizon of the EE project being proposed. The incremental benefits of the EE project will be calculated as the difference between the estimated energy savings with the EE program and the savings that would have occurred in the marketplace without the program.

The development of the baseline scenario can be tricky and sometimes difficult. However, the financing agencies have developed methodologies and tools to estimate and document the baseline. Countries preparing proposals for mitigation financing should review some of the prior efforts that have developed credible baseline scenarios and assess the applicability of the tools and methodologies used in these prior efforts.59

5.5 RISK ASSESSMENT Risk assessment is an important step in the proposal preparation. All financing sources will require the proposing entities to identify the major risks that may affect the successful implementation of the proposed project. Examples of typical risks of climate change mitigation projects include:

• Technology risk – will the proposed technology work as expected? • Implementation risk – will the implementation be completed within the specified time

and budget • Financial risk – Will the project yield the expected financial results? • Regulatory risk – Will government policies and regulations change in a manner that will

adversely influence the project?

59 The GEF PIFs and the PADs developed by MDBs are available on their web sites.



• Political risk – Will any changes in government structure negatively influence the success of project implementation?

• Market risk – Will the market accept the technology or measure being implemented? • Co-financing risk – Will the anticipated co-financing be available when needed? • Price risk – Will changes in market prices adversely affect the project economics”

A careful risk identification and assessment needs to be performed in the preparation of the proposal. Also, it is not sufficient to simply identify the risks. The proposal needs to assess the likelihood of each risk and define the potential impacts of the risk on the project implementation and results. Further, it needs to define the measures that will be taken to mitigate each risk and its impacts.

While each proposed project is unique, and the specific risks pertaining to that proposed project need to be specifically identified, much can be learned from the experience of projects financed by the various financing sources identified in this report. Here again the project proponents can benefit from studying the proposals prepared in prior projects financed by the relevant sources and learning from them to develop an appropriate risk assessment and management plan.

5.6 JUSTIFYING THE FINANCING NEED Since most financing sources receive more proposals than they can fund, it is important to make a strong case for justifying the need for financing of the project being proposed. Each proposal will have its own unique needs that will define the justification for financing.

The need for external financing may be justified in situations such as:

• Limited availability of funds for financing mitigation projects (lack of liquidity) • Reluctance of existing financing sources to provide financing for mitigation projects due

to lack of knowledge or understanding • High perception of risk of investments in mitigation projects • Pricing distortions and/or subsidies to non-climate-friendly technologies • High cost of the mitigation technologies that make them economically unattractive • Characteristics of certain types of mitigation projects that make them unattractive for

conventional financing

The proposal needs to identify which of these (or other) conditions are present and are hindering the implementation of the mitigation program or project envisioned. Then the justification for financing should follow the steps outlined below:

• Define the existing situation and document the barriers and challenges that are preventing the mitigation actions from being implemented.

• Identify and document the baseline conditions in the absence of the project.

• Describe the project activities that are targeted at addressing the barriers and challenges.

• Define clearly why these activities may not be undertaken without the additional financing requested. (This step becomes very important because most sources require co-financing and the proposal needs to identify sources for such co-financing. But the proposal must also demonstrate that these co-financing sources will only “come to the table” if and when the proposal is successful in obtaining the financing sought.)



• Describe how the financing will leverage the co-financing and together achieve the results that will lead to the mitigation.

• Document clearly all information and assumptions to develop and support the justification for financing the project.

• Before preparing the justification for the financing, it would be very useful to review prior proposals submitted to the financing source to obtain a good understanding of how the various parts of the proposal should be prepared.



SECTION 6 CONCLUDING REMARKS



SECTION 6 – CONCLUDING REMARKS

6.1 SUMMARY OF FINANCING SOURCES The major sources of financing for climate change mitigation projects include multilateral, bilateral and private financing sources.

Multilateral financing sources include multilateral development banks (MDBs), such as the World Bank; agencies of the United Nations, such as UNDP and UNEP; and special international agencies created by these MDBs (such as the Global Environment Facility) in collaboration with various national governments; (which are together referred herein to as multilateral financial institutions or MFIs). The MFIs have established a number of special funds for climate change mitigation, such as the Climate Investment Funds (CIFs) administered by the World Bank – the Clean Technology Fund (CTF) and the Strategic Climate Fund. In addition, the MFIs have established a number of Carbon Funds to facilitate the sale of the certified emission reduction (CER) credits from mitigation projects.

Bilateral financing institutions (BFIs) are created and directed by a national government for the purpose of giving aid or investing in targeted development projects and programs in developing countries and emerging markets. BFIs carry out the mandates given to them by the national governments which are based on the strategic objectives of the governments and their focus on specific geographic areas and technologies.

Private financing sources, which are increasingly being involved in financing climate change mitigation projects, include a wide range of local and international banks and financial institutions, venture capital and private equity funds, pension funds and some special funds created to address climate change mitigation. Private financing sources also include carbon finance companies.

Many of the public (multilateral and bilateral) financing sources seek to leverage increased financing from private sources. To accomplish this, a number of public-private partnerships have been established. PPPs are designed to leverage private flows to fill funding gaps, transfer service delivery risks, and improve the cost effectiveness of service delivery.

6.2 SUMMARY OF THE PROPOSAL REQUIREMENTS OF DIFFERENT FINANCING SOURCES

In general, the financing sources will require the following type of information in a proposal:

• Basic definition of the project • Definition of how the project is consistent with the strategic objectives of the financing

source • Project rationale defining why it is being undertaken • Specific project objectives • Project costs, amount to be financed from the proposed source, and =the amount and

sources of other financing available • Definition of the baseline conditions in the absence of the project, including key issues,

barriers and challenges



• Description of project tasks or components • Identification of how the project activities will address the key issues, barriers and

challenges and move beyond the baseline conditions to produce beneficial results for climate change mitigation

• Statement of project results and benefits and results, including quantification of the climate change benefits

• Definition of risks, their potential impacts on project results and the proposed risk management plan

• Description of project implementation and management plan • Definition of project measurement reporting and verification methodology

6.3 SUMMARY OF GUIDELINES FOR POTENTIAL APPLICANTS Since most financing sources receive more proposals than they can fund, it is important to make a strong case for justifying the need for financing of the project being proposed. Each proposal will have its own unique needs that will define the justification for financing.

The following guidelines are provided to justify the need for financing:

• Define the existing situation and document the barriers and challenges that are preventing the mitigation actions from being implemented.

• Identify and document the baseline conditions in the absence of the project.

• Describe the project activities that are targeted at addressing the barriers and challenges.

• Define clearly why these activities may not be undertaken without the additional financing requested. (This step becomes very important because most sources require co-financing and the proposal needs to identify sources for such co-financing. But the proposal must also demonstrate that these co-financing sources will only “come to the table” if and when the proposal is successful in obtaining the financing sought.)

• Describe how the financing will leverage the co-financing and together achieve the results that will lead to the mitigation.

• Document clearly all information and assumptions to develop and support the justification for financing the project.

• Before preparing the justification for the financing, review prior successful proposals submitted to the financing source to obtain a good understanding of how the various parts of the proposal should be prepared.



APPENDIXES



APPENDIX I – ABBREVIATIONS AND ACRONYMS

ADA Austrian Development Agency ADB Asian Development Bank AECF Africa Enterprise Challenge Fund AfD Agence Francaise de Developpement AfDB African Development Bank AGRA Alliance for a Green Revolution in Africa AusAID Australian Aid Agency BEEF Bulgarian Energy Efficiency Fund BFI Bilateral Financial Institution BNDES Brazilian Development Bank BoA Bank of America CABEI Central American Bank for Economic Integration CAF Corporacion Andina de Fomento CALPERS California Public Employees Retirement System CCF Climate Change Fund CCPL Climate Change Program Loan CDB Caribbean Development Bank CDM Clean Development Mechanism CEEF Commercializing Energy Efficiency Finance CER Certified Emission Reductions CFU Carbon Finance Unit CHEEF China Energy Efficiency Financing CIDA Canadian International Development Agency CIF Climate Investment Fund CO2e Carbon Dioxide Equivalent COP Conference of the Parties CPF Carbon Partnership Facility CPI Climate Policy Initiative CTF Clean Technology Fund DAC Development Assistance Committee DANIDA Danish International Development Agency DFI Development Financial Institution DFID Department for International Development DKK Danish Kroner EADB East African Development Bank EBRD European Bank of Reconstruction and Development EE Energy Efficiency EIB European Investment Bank ERPA Emissions Reduction Purchase Agreement ESMAP Energy Sector Management Assistance Program ESPC Energy Saving Performance Contract EU European Union FI Financial Institution FIP Forest Investment Program FIT Feed-In Tariff GEEREF Global Energy Efficiency and Renewable Energy Fund



GEF Global Environment Facility GHG Greenhouse Gas GIZ Deutsche Gesellschaft für Internationale Zusammenarbeit GmbH IBRD International Bank for Reconstruction and Development ICCTF Indonesia Climate Change Trust Fund ICI International Climate Initiative IDA International Development Association IDB Inter-American Development Bank IEA International Energy Agency IFC International Finance Corporation IFI International Financial Institution ILGCC Institutional Investors Group on Climate Change IMF International Monetary Fund IPCC Intergovernmental Panel on Climate Change INCR Investor Network on Climate Risk IRR Internal Rate of Return JI Joint Implementation JICA Japan International Cooperation Agency KfW Kreditanstalt fuer Wiederaufbau LAC Latin American and Caribbean LDCF Least Developed Countries Fund LFI Local Financial Institution LoA letter of Approval LoI Letter of Intent MCCF Multilateral Carbon Credit Fund MDBs Multilateral Development Banks MDG Millennium Development Goals MFI Multilateral Financial Institution MIGA Multilateral Investment Guarantee Agency NCF Nordic Climate Facility NDF Nordic Development Fund NEF New Energy Finance NEFCO Nordic Environment Finance Corporation NGO Nongovernmental Organization NZODA New Zealand Official Development Assistance ODA Official Development Assistance ODI Overseas Development Institute OECD Organization for Economic Cooperation and Development OPEC Organization of Petroleum Exporting Countries PAD Project Appraisal Document PCG Partial Credit Guarantee PCN Project Concept Note PDD Project Design Document PIN project Idea Note PIF Project Information Form PoA Program of Activities PPA Power Purchase Agreements PPCR Pilot Program for Climate Resilience PPP Public-Private Partnership PRG Partial Risk Guarantee



RE Renewable Energy REACT Renewable Energy and Adaptation to Climate Technologies REDD Reduced Emissions from Deforestation and Forest Degradation REEEP Renewable Energy and Energy Efficiency Partnership SCAF Seed Capital Assistance Facility SCF Strategic Climate Fund SIDA Swedish International Development Agency SME Small and Medium Enterprise SACEF South Asia Clean Energy Fund SREP Scaling-Up Renewable Energy in Low Income Countries SSA Sub-Saharan Africa SWF Sovereign Wealth Funds TA Technical Assistance TAP Technology Action Plan TNA Technology Needs Assessment UAE United Arab Emirates UN United Nations UNDP United Nations Development Program UNEP United Nations Environment Program UNFCCC United Nations Framework Convention on Climate Change URC UNEP Risoe Center USAID U.S. Agency for International Development USD U.S. Dollar VC Venture Capital WBG World Bank Group

APPENDIX II - DETAILED

INMFORMATION ON FINANCING SOURCES

Guidebook on Financing Options for Mitigation Actions in Developing Countries Appendix II – Detailed Information on Financing Sources

Final Report – Appendix II December 2011

Pagei

TABLE OF CONTENTS

A. MULTILATERAL FINANCING SOURCES ............................................................................................... 7

A.1 MULTILATERAL FINANCIAL INSTITUTIONS (MFI) ............................................................................... 7

1. ADB CLEAN ENERGY FINANCING PARTNERSHIP FACILITY (CEFPF) ............................................................................... 8 2. ADB ENERGY EFFICIENCY INITIATIVE (EEI) ........................................................................................................... 10 3. ADB ENERGY FOR ALL INITIATIVE ........................................................................................................................ 12 4. AFDB CONGO BASIN ECOSYSTEMS CONSERVATION SUPORT PROGRAM (PACEBCO) .................................................... 15 5. CARIBBEAN CATASTROPHE RISK INSURANCE FACILITY .............................................................................................. 19 6. CENTRAL AMERICAN BANK FOR ECONOMIC INTEGRATION (CABEI) ........................................................................... 21 7. CLEAN ENERGY FOR DEVELOPMENT INVESTMENT FRAMEWORK ................................................................................. 24 8. CLIMATE AND DEVELOPMENT KNOWLEDGE NETWORK ............................................................................................ 26 9. CLIMATE FINANCE INNOVATION FACILITY (CFIF) .................................................................................................... 30 10. EAST AFRICAN DEVELOPMENT BANK (EADB) ....................................................................................................... 33 11. EBRD (EUROPEAN BANK FOR RECONSTRUCTION AND DEVELOPMENT) CLIMATE CHANGE FINANCE .................................. 36 12. EIB (EUROPEAN INVESTMENT BANK) .................................................................................................................. 39 13. EIB CLIMATE CHANGE TECHNICAL ASSISTANCE FACILITY .......................................................................................... 45 14. END‐USER FINANCE FOR ACCESS TO CLEAN ENERGY TECHNOLOGIES IN SOUTH AND SOUTH‐EAST ASIA (FACET) ................. 47 15. GEF (GLOBAL ENVIRONMENT FACILITY) CLIMATE CHANGE TRUST FUND ..................................................................... 50 16. GEF SMALL GRANTS PROGRAMME ..................................................................................................................... 55 17. GLOBAL CLIMATE CHANGE ALLIANCE (GCCA) ....................................................................................................... 59 18. IDB ‐ SUSTAINABLE ENERGY AND CLIMATE CHANGE INITIATIVE (SECCI) ..................................................................... 63 19. IFC PARTIAL CREDIT GUARANTEES ...................................................................................................................... 65 20. IFC RISK SHARING FACILITY ............................................................................................................................... 67 21. IFC SECURITIZATIONS ...................................................................................................................................... 69 22. INTERNATIONAL TROPICAL TIMBER ORGANIZATION (ITTO) ...................................................................................... 71 23. LATIN AMERICAN CARBON, CLEAN AND ALTERNATIVE ENERGIES PROGRAMME (PLAC+E) .............................................. 74 24. PARTNERSHIP FOR MARKET READINESS (PMR) ..................................................................................................... 77 25. PLANET BANKING PROGRAM ............................................................................................................................. 79 26. PRIVATE FINANCING ADVISORY NETWORK (PFAN) ................................................................................................ 81 27. SUSTAINABLE TRANSPORT INITIATIVE ................................................................................................................... 84 28. UNDP GREEN COMMODITIES FACILITY................................................................................................................ 86 29. UNEP GREEN ECONOMY INITIATIVE (GEI) ........................................................................................................... 88 30. UNEP RENEWABLE ENERGY ENTERPRISE DEVELOPMENT (REED) ............................................................................. 90 31. UN‐REDD PROGRAM (REDUCED EMISSIONS FROM DEFORESTATION AND FOREST DEGRADATION) .................................. 93 32. WORLD BANK ‐ ASIA SUSTAINABLE AND ALTERNATIVE ENERGY PROGRAM (ASTAE) ..................................................... 97 33. WORLD BANK ‐ ENERGY SECTOR MANAGEMENT ASSISTANCE PROGRAM (ESMAP) ...................................................... 99 34. WORLD BANK GREEN BONDS .......................................................................................................................... 102 35. WORLD BANK GROUP CATASTROPHIC RISK MANAGEMENT .................................................................................... 105 36. WORLD BANK ‐ INTERNATIONAL DEVELOPMENT ASSOCIATION (IDA) ....................................................................... 108 37. WORLD BANK/IREDA ‐ INDIAN RENEWABLE ENERGY DEVELOPMENT AGENCY LOAN PROGRAM ................................ 111 38. WORLD BANK ‐ MULTILATERAL INVESTMENT GUARANTEE AGENCY .......................................................................... 114

A.2 – SPECIAL CLIMATE FUNDS .................................................................................................................. 120

39. ADB CLEAN ENERGY PRIVATE EQUITY INVESTMENT FUNDS .................................................................................... 121 40. ADB CLIMATE CHANGE FUND (CCF) ................................................................................................................ 123 41. AFDB CONGO BASIN FOREST FUND .................................................................................................................. 126 42. AFDB SUSTAINABLE ENERGY FUND FOR AFRICA (SEFA) ........................................................................................ 129 43. BNDES AMAZON FUND ................................................................................................................................. 131 44. BULGARIA ENERGY EFFICIENCY FUND (BEEF) ...................................................................................................... 136 45. CARIBBEAN DEVELOPMENT BANK (CDB) ‐ SPECIAL DEVELOPMENT FUND ................................................................. 139 46. CLEAN TECHNOLOGY FUND (CTF) .................................................................................................................... 143 47. CLIMDEV‐AFRICA SPECIAL FUND (CDSF) ........................................................................................................... 146


48. E+CO CAREC FUND ....................................................................................................................................... 149 49. FOREST INVESTMENT PROGRAM (FIP) ............................................................................................................... 152 50. GEF ‐ LEAST DEVELOPED COUNTRIES FUND (LDCF) ............................................................................................. 157 51. GLOBAL FACILITY FOR DISASTER REDUCTION AND RECOVERY (GFDRR) .................................................................... 159 52. GLOBAL ENERGY EFFICIENCY AND RENEWABLE ENERGY FUND (GEEREF) ................................................................. 163 53. GREEN CLIMATE FUND (GCF) ......................................................................................................................... 167 54. IDB ‐ INFRASTRUCTURE FUND (INFRAFUND) ....................................................................................................... 169 55. IDB GROUP ‐ MULTILATERAL INVESTMENT FUND (MIF) ....................................................................................... 171 56. IDB REGIONAL FUND OF AGRICULTURAL TECHNOLOGY (FONTAGRO) .................................................................... 174 57. IMF ‐ GREEN FUND ...................................................................................................................................... 177 58. INDONESIA CLIMATE CHANGE TRUST FUND ........................................................................................................ 179 59. MEDITERRANEAN INVESTMENT FACILITY (MIF) ................................................................................................... 183 60. NORDIC DEVELOPMENT FUND ......................................................................................................................... 186 61. PILOT PROGRAM FOR CLIMATE RESILIENCE (PPCR) .............................................................................................. 189 62. RENEWABLE ENERGY AND ENERGY EFFICIENCY PARTNERSHIP (REEEP) ..................................................................... 192 63. SCALING‐UP RENEWABLE ENERGY PROGRAM FOR LOW‐INCOME COUNTRIES (SREP) .................................................. 194 64. SPECIAL CLIMATE CHANGE FUND (SCCF) ........................................................................................................... 198 65. SEED CAPITAL ASSISTANCE FACILITY (SCAF) ....................................................................................................... 201 66. UNDP/SPAIN MDG ACHIEVEMENT FUND ......................................................................................................... 205

A.3 CARBON FUNDS ............................................................................................................................ 208

67. ADB ASIA PACIFIC CARBON FUND (APCF) AND FUTURE CARBON FUND (FCF) .......................................................... 209 68. ADB CARBON MARKET INITIATIVE (CMI) .......................................................................................................... 213 69. AFDB AFRICAN CARBON SUPPORT PROGRAM (ACSP) .......................................................................................... 215 70. AFRICAN CARBON ASSET DEVELOPMENT FACILITY (ACAD) .................................................................................... 218 71. CARBON FINANCE FOR AGRICULTURE, SILVICULTURE, CONSERVATION, AND ACTION AGAINST DEFORESTATION .................. 223 72. EIB‐KFW CARBON PROGRAM II ...................................................................................................................... 225 73. EIB POST‐2012 CARBON CREDIT FUND ............................................................................................................ 228 74. FOREST CARBON PARTNERSHIP FACILITY (FCPF) .................................................................................................. 230 75. MULTILATERAL CARBON CREDIT FUND (MCCF) .................................................................................................. 234 76. UNDP/MDG CARBON FACILITY ...................................................................................................................... 238 77. WORLD BANK CARBON FUNDS AND FACILITIES .................................................................................................... 241 78. WORLD BANK CARBON PARTNERSHIP FACILITY (CPF) ........................................................................................... 243

B. BILATERAL FINANCING SOURCES ....................................................................................................... 246

79. AFD – FRENCH DEVELOPMENT AGENCY ............................................................................................................ 247 80. AUSAID ‐ COMMUNITY BASED CLIMATE CHANGE ACTION GRANTS .......................................................................... 252 81. AUSTRIAN DEVELOPMENT COOPERATION (ADC) ENERGY AND ENVIRONMENT PARTNERSHIP PROGRAM .......................... 259 82. DANIDA (DANISH INTERNATIONAL DEVELOPMENT AGENCY) ................................................................................. 265 83. GUYANA REDD + INVESTMENT FUND (GRIF) ..................................................................................................... 268 84. INTERNATIONAL CLIMATE FUND (FORMERLY ETF‐IW) .......................................................................................... 271 85. INTERNATIONAL CLIMATE INITIATIVE (GERMANY) ................................................................................................. 275 86. INTERNATIONAL FOREST CARBON INITIATIVE (IFCI) .............................................................................................. 278 87. JAPAN BANK FOR INTERNATIONAL DEVELOPMENT (JBIC) ....................................................................................... 281 88. JICA ‐ JAPAN’S FAST START FINANCE ................................................................................................................ 284 89. JAPAN ‐ THE HATOYAMA INITIATIVE (JAPAN) ..................................................................................................... 286 90. KFW ‐ KREDITANSTALT FUR WIEDERAUFBAU ...................................................................................................... 289 91. KFW CHILE ‐ CORFO CREDIT LINE PROGRAM ................................................................................................... 292 92. KFW ‐ FUND SOLUTIONS FOR CLIMATE FINANCE ................................................................................................. 294 93. OPIC ‐ OVERSEAS PRIVATE INVESTMENT CORPORATION ....................................................................................... 297 94. USAID – GLOBAL CLIMATE CHANGE INITIATIVE .................................................................................................. 301

C. PRIVATE FINANCING SOURCES .......................................................................................................... 304

95. AFRICA ENTERPRISE CHALLENGE FUND: RENEWABLE ENERGY & ADAPTATION TO CLIMATE TECHNOLOGIES ....................... 305 96. ATP PENSION FUND ...................................................................................................................................... 308 97. CALIFORNIA PUBLIC EMPLOYEES’ RETIREMENT SYSTEM (CALPERS) ......................................................................... 310 98. CAPITAL MARKET CLIMATE INITIATIVE (CMCI) .................................................................................................... 313


99. CHINA ENVIRONMENT FUND (CEF) .................................................................................................................. 315 100. FIDEME AND EUROFIDEME 2 ..................................................................................................................... 317 101. FE CLEAN ENERGY GROUP INC. ........................................................................................................................ 320 102. INSTITUTIONAL INVESTORS GROUP ON CLIMATE CHANGE (IIGCC) ........................................................................... 322 103. INVESTOR NETWORK ON CLIMATE RISK (MANAGED BY CERES) ................................................................................ 324 104. INVESTOR GROUP ON CLIMATE CHANGE AUSTRALIA/NEW ZEALAND (IGCC) ............................................................. 326 105. LONG‐TERM INVESTORS CLUB .......................................................................................................................... 329 106. MMA RENEWABLE VENTURES (MMARV) ........................................................................................................ 331 107. NEFCO CARBON FINANCE FUND ..................................................................................................................... 333 108. PGGM (THE PENSION FUND FOR THE DUTCH HEALTHCARE SECTOR) ........................................................................ 336 109. P8 GROUP .................................................................................................................................................. 338 110. X PRIZE – ENERGY AND ENVIRONMENT PRIZE GROUP ........................................................................................... 340

APPENDIX II – Detailed Information on Financing Sources

December 2011

A. MULTILATERAL FINANCING SOURCES

A.1 MULTILATERAL FINANCIAL INSTITUTIONS (MFI)


December 2011

ADB CLEAN ENERGY FINANCING PARTNERSHIP FACILITY (CEFPF)

No. Characteristic Description

1 Name of Financing Source ADB Clean Energy Financing Partnership Facility (CEFPF)

2 Sponsoring Organization Asian Development Bank

3 Address 6 ADB Avenue, Mandaluyong City 1550, Philippines

4 Key Contact (Name, e-Mail, and Website)

Samuel Tumiwa, Principal Planning and Coordination Specialist [email protected]

5 Objectives

• Provide support for cost effective investments in technologies and practices that result in greenhouse gas mitigation.

• To finance policy, regulatory, and institutional reforms that encourage clean energy development.

6 Region/Country Focus Developing Member Countries

7 Sector Focus

1. biomass, biofuel, biogas

2. rural electrification and energy access

3. distributed energy production

4. waste-to-energy projects

5. demand-side management projects

6. energy-efficient district heating

7. energy-efficient buildings and end-use facilities

8. energy-efficient transport

9. energy-efficient street lighting

10. clean energy power generation, transmission, and distribution

11. manufacturing facilities of clean energy system components, high efficiency appliances and industrial equipments


December 2011

12. energy service companies development

8 Technology Focus None

9 Type of Funding Support (e.g., loans, grants, etc.)

Co-financing , Grant , Technical assistance

10 Management/Governance

The Clean Energy Working Group will review and endorse project proposals. The Climate Change Steering Committee allocates resources to selected project proposals. Following fund allocation from CEFPF, the approval of the proposed CE project follows the normal ADB procedure.

11 Proposal/Application Requirements

12

Eligible Projects/Programs (whether only for soft items such as capacity building or policy advice, etc, or also for hard items, such as for plant and equipment) or Organizations

Mitigation, Energy, Energy Efficiency, Fuel Switching, Renewable Energy. About 30% of CEFPF’s resources will be used for standalone technical assistance projects and direct charges; and about 70% will be used for grant components of investments and may also be used to procure equipment and works based on advanced technologies, back financing mechanisms or risk sharing facilities to promote CE, and services to lower barriers.

13 Eligibility Criteria No information

14 Proposal Evaluation Criteria No information

15 When and How to Apply

CEFPF reviews applications in six (6) batches throughout the year. Applications should be submitted to the Secretariat on or before the following deadlines:

• January 31 • March 31 • May 31 • July 31 • September 30 • November 30

16 Procedures for Fund Disbursement

No information

17 Size of the Funding source (Annual or Total)

Overall target: $250 million


December 2011

18 Funding Limit for Individual Projects

No information

19 Monitoring & Evaluation Procedures

No information

20 Sources for Further Information

http://www.adb.org/Clean-Energy/cefpf.asp http://www.climatefinanceoptions.org/cfo/node/54

21 Additional Comments

ADB ENERGY EFFICIENCY INITIATIVE (EEI)


1 Name of Financing Source ADB Energy Efficiency Initiative (EEI)


3 Address 6 ADB Avenue, Mandaluyong City 1550 Metro Manila, Philippines


Aiming Zhou Energy Specialist [email protected]

5 Objectives Mainstreaming Energy Efficiency in ADB Operations in three phases.

6 Region/Country Focus

6 priority countries. Bangladesh, Cambodia, Lao PDR, Mongolia, Uzbekistan. 5 DMCs remain in the priority list. CE development in Afghanistan will be supported by another funding source.

7 Sector Focus ADB clean energy investments under EEI include end-use energy efficiency, renewable energy, and cleaner fuels

8 Technology Focus Biomass, hydro, solar, wind, carbon capture and storage




12 Eligible Projects/Programs To help finance EEI, the Clean Energy Financing


December 2011

(whether only for soft items such as capacity building or policy advice, etc, or also for hard items, such as for plant and equipment) or Organizations

Partnership Facility (CEFPF) was established in April 2007 to fund small energy efficiency investments that require quick transactions, finance some technology transfer costs of clean technologies, and provide grant assistance for activities such as developing the knowledge base on clean energy technologies.

13 Eligibility Criteria

14 Proposal Evaluation Criteria




EEI aims to invest US$1 billion a year from 2008 to 2010




http://www.adb.org/Documents/TARs/REG/41279-REG-TAR.pdf



December 2011

ADB ENERGY FOR ALL INITIATIVE


1 Name of Financing Source ADB Energy for all Initiative


3 Address

Energy for All Partnership Secretariat Unit 2007, 20th floor, Jollibee Plaza Condominium F. Ortigas Jr. Avenue (formerly Emerald Ave.) Ortigas Center, Pasig City Philippines


Only postal address provided

5 Objectives

Scale up access to modern sustainable energy for the poor through regional partnerships for the poor. a goal to provide access to energy to 100 million people in Asia and the Pacific region by 2015

6 Region/Country Focus Asia and Pacific region

7 Sector Focus Energy efficiency and Renewable energy

8 Technology Focus Lighting, Domestic Biogas, Liquid Petroleum Gas (LP Gas), Small Wind



The secretariat coordinates the day-to-day operations of the Partnership, supports the steering committee and working groups and manages communications and outreach. The secretariat is hosted by the Asian Development Bank (ADB) and facilitated by ETC the Netherlands and Approtech Asia. Officially based at ADB Headquarters in Manila, Philippines, the secretariat includes experts in key locations throughout the region. The steering committee comprises key partners from the donor community, financial institutions, foundations, government, the private sector and other expert contributors. Current members include The Asian Development Bank (ADB), e8, E+Co, ReEx Capital Asia, The National Electrification Administration of the Philippines, Renewable


December 2011

Energy and Energy Efficiency Partnership (REEEP), SNV Netherlands Development Organisation, Sustainable Energy Association of Singapore (SEAS), The Energy and Resources Institute (TERI), The World Business Council for Sustainable Development (WBCSD), World LP Gas Association (WLPGA). A group of outstanding leaders in the field provides ongoing strategic advice as well as extends the potential of the Partnership. They act as ambassadors and champions by helping to embrace new institutions as collaborators, partners and agents contributing expertise and resources to advance the objective of energy for all in Asia and the Pacific.


Fill in the registration form to join any of the seven working groups.

12


A network of individuals and organizations who provide technical expertise, financial support, knowledge exchange etc.


Participation from financial institutions and the private sector is strongly encouraged. Any one can participate by filling in the form. Once the completed form has been received, the partnership gets in touch directly to figure out how to best fit you into their mission: as an operational partner, a sponsoring partner, a working group convener or something else entirely.


Not applicable

15 When and How to Apply Complete participation form available online


Not applicable


Not applicable


Not applicable

19 Monitoring & Evaluation Not applicable


December 2011

Procedures


http://www.energyforall.info/ http://beta.adb.org/sectors/energy/programs/energy-for-all-initiative



December 2011

AFDB CONGO BASIN ECOSYSTEMS CONSERVATION SUPORT PROGRAM (PACEBCO)


1 Name of Financing Source AfDB Congo Basin Ecosystems Conservation Suport Program (PACEBCo)

2 Sponsoring Organization African Development Bank

3 Address


DIOP Ahmadou Bamba

5 Objectives

6 Region/Country Focus Congo river basin

7 Sector Focus Conservation and Biodiversity of Congo Basin

8 Technology Focus




12


ADB Group works with each borrowing regional member country to define a medium-term to long-term development strategy and operational program in a document called country strategy paper (CSP), formerly Economic Prospects and Country Programming (ECPC) papers. The CSP or CSPAR taking into consideration an exigency for performance and results, is aligned to the country's own development plan and poverty reduction goals, and its preparation or planning cycle.



Once the project or the programme has been approved, the Government is called for negotiation and following criteria are discussed for final selection: a) Objectives and description of the project, studies or programmes;


December 2011

b) loan amount in foreign and local costs of the project and the financing plan; c) a tentative list of goods and services to be procured; d)the schedule of execution and expenditure; e) the disbursement methods selected by the borrower; f) the tentative schedule of disbursements including the precise information on the account numbers and correspondence banks; g) the procurement methods and dates of bidding announcements; h) the precise information on the executing agency and the project implementation unit; i) proposed realistic date for loan signature and deadlines for first and last disbursements; j) for co-financed projects , respective financing plans, cross-effectiveness and other miscellaneous information.




ADF contribution: UAC 32,000,000 Government contribution: UAC 5,280,000 Total: UAC 37,280,000



After the project facilities and technical assistance activities are completed, ADB prepares a project completion report (PCR) or technical assistance completion report to document the implementation experience. These reports are prepared within 12 - 24 months of the completion of the project. Evaluation within the AfDB covers the entire results chain of inputs, outputs, outcomes, and impacts. The focus of evaluation studies has shifted from the project to the country, informed by sector and thematic assessments as well as by evaluations of AfDB's own business processes. A full mix of lending and non-lending services that make up the Bank’s country assistance programs has now become the dominant


December 2011

preoccupation of evaluation, with priority attention to relevance, efficiency, effectiveness, and sustainability. Generally the Bank’s concern as to whether the objectives of its projects and programs are being met is now a major responsibility of the Bank’s Evaluation Department (OPEV). The key performance indicators used in evaluating the success of projects and programs are developed around the following: i) the relevance and achievement of objectives at project appraisal; ii) the borrower’s implementation performance; iii) adherence to project cycle time frame, the performance and the role of the Bank; iv) institutional development performance of the project; and v) the sustainability of project or program results. The assessment of the degree of performance for individual projects is based on a point rating or scoring system with scores ranging from 0-4. A 3-4 rating signifies a “highly satisfactory” performance. Project Completion Report (PCR) Evaluation Notes is the tool used specifically for performance evaluation, but Project Officers also rate performance of projects for which project completion reports have not been evaluated by OPEV. The relevance and achievement of objectives (RAO), is by far the single strongest indicator of implementation performance of Bank Group operations and a project is highly satisfactory if it scores a rating of 3 or above. Operations exhibiting the lowest ratings on similar performance indicators used to highlight successful projects are regarded as failed, unsuccessful or even dismal operations, from project appraisal objectives and expected outputs. Operations evaluation has made the Bank Group a knowledge-based institution and a leader in collection of Africa’s development experience in all sectors of development process, both for project and policy-based operations


http://www.afdb.org/en/projects-and-operations/project-portfolio/project/p-cg-c00-010/



December 2011


December 2011

CARIBBEAN CATASTROPHE RISK INSURANCE FACILITY


1 Name of Financing Source Caribbean Catastrophe Risk Insurance Facility

2 Sponsoring Organization The World Bank Group

3 Address


World Bank Group [email protected]

5 Objectives

Short-term liquidity will be provided to the Caribbean Community government to start recovery efforts while maintaining essential government services in the aftermath of natural disasters (hurricanes and earthquakes)

6 Region/Country Focus Caribbean Governments

7 Sector Focus Risk Management



Mutual Insurance company


Established as an independent legal entity CCRIF is managed by a specialized firm under the supervision of a board of directors composed of representatives from the donors and participating countries. Board is supported by the technical advice of a facility supervisor.


12


Mitigation, Disaster Risk Reduction. No limitation on how to use the funds provided.

13 Eligibility Criteria CCRIF membership is currently open to Caribbean governments. Because CCRIF was a CARICOM initiative, all members are part of CARICOM.


December 2011

CCRIF is currently discussing the possibility of expanding the facility to non-CARICOM members over the coming years.

14 Proposal Evaluation Criteria N/A

15 When and How to Apply Earthquake or hurricane emergency


N/A


Donors (including the World Bank) contributed a total of USD 52 million to the CCRIF reserve fund. In 2008, annual premiums of USD 30 million provided an aggregate coverage of USD 560 million.


The CCRIF disburses funds based on the occurrence of pre-established trigger events measured (by an independent agency) in terms of wind speed or ground shaking thresholds. The payout is then proportional to the estimated loss derived from sophisticated hazard impact models designed during the development phase of the CCRIF.


Info not provided


Caribbean Catastrophe Risk Insurance Facility Caribbean Catastrophe Risk Insurance Facility - World Bank page Disaster Risk Management Programme - UNFCCC page


One of CCRIF’s key features is the speed at which it is designed to provide short-term liquidity to a government affected by an earthquake or hurricane, which is made possible by the use of parametric insurance instruments.


December 2011

CENTRAL AMERICAN BANK FOR ECONOMIC INTEGRATION (CABEI)


1 Name of Financing Source Central American Bank for Economic Integration (CABEI)

2 Sponsoring Organization Central American Bank for Economic Integration

3 Address

16 Calle 7-44, Zona 9, Guatemala PALIC Building, second level, Alameda Dr. Manuel Enrique Araujo and Street New No. 1, San Salvador, El Salvador


Key contact not provided

5 Objectives

As energy is crucial for social development and competitiveness of each country and the region. Through this area the bank seeks to support the initiative of SIEPAC for forming a common energy market in Central America. Its mission is to promote the integration and balanced economic and social development of Central American countries.

6 Region/Country Focus Central America

7 Sector Focus

Focus areas are: Renewable energy generation Biofuel initiatives that will not jeopardize food

security Renewable generation is not a priority for

governments Transmission and distribution of electricity,

including rural electrification Energy efficiency initiatives

Projects that increase the potential and improve the structure and efficiency of the energy mix of countries

8 Technology Focus Most of the approved operations are that of Hydroelectric projects


The aim of the CABEI Funding Strategy is to ensure the existence of necessary and available resources to meet its obligations and provide


December 2011

funding to the lower and more stable cost to benefit borrowers. CABEI seeks to ensure compliance with the above through diversification of instruments, markets and maturities. In this regard, the Bank makes debt issues in a variety of currencies, markets, structures and formats, with the objective of maintaining a diversified source of investors. Also, CABEI obtains bilateral funding of loans by both market conditions and concessional lines of short-term certificates of deposit, also implementing a Global Commercial Paper Program and a Regional.


The Board of Governors is the highest authority of the Central American Bank for Economic Integration (BCIE). Each partner is represented by one governor and one alternate. Directors: The Board is the body responsible for the direction of the BCIE. It exercises all the powers delegated to it by the Board of Governors and to define operational and administrative policies, approve the budget and plans for short, medium and long term lending and borrowing operations. It also determines the basic organization of the Bank exercises management control of the administration and proposed to the Board of Governors the establishment of capital reserves. The Bank management has senior management, country managers and managers at local offices.


No information available

12


Information overlap with ‘type of funding support’

13 Eligibility Criteria No information available


15 When and How to Apply No information available




December 2011


Total disbursement by June 2011 is US$ 571.7 millions





20 Sources for Further Information http://www.bcie.org/


The other focus areas for the Bank funding and activities are:

Productive Infrastructure Financial Intermediation and Development

Finance Energy Human Development and Social Infrastructure Agriculture and Rural Development Industry, Urban Development and

Competitiveness Services


December 2011

CLEAN ENERGY FOR DEVELOPMENT INVESTMENT FRAMEWORK


1 Name of Financing Source Clean Energy for Development Investment Framework

2 Sponsoring Organization The World Bank

3 Address The World Bank 1818 H Street, NW Washington, DC 20433, USA


5 Objectives

The overall goal of the Investment Framework is to catalyze investments from public and private sources to increase access to energy in developing countries and, thereby, to spur development, while using cleaner technologies that protect the environment.

6 Region/Country Focus Developing Countries

7 Sector Focus

Three pillars: Energy for development,

A low carbon economy, and

Adaptation to climate change

8 Technology Focus Low carbon technologies




Demands to be expressed through Country Assistance Strategies (CASs)

12



December 2011









http://siteresources.worldbank.org/EXTSDNETWORK/Resources/AnInvestmentFrameworkforCleanEnergyandDevelopment.pdf?resourceurlname=AnInvestmentFrameworkforCleanEnergyandDevelopment.pdf http://siteresources.worldbank.org/DEVCOMMINT/Documentation/21046509/DC2006-0012(E)-CleanEnergy.pdf


Role of the Bank and Next Steps: Energy for development and access for the poor

accelerate energy access in SSA

support economic growth in low- and middle income countries through policy reform

Low carbon economy scale up energy efficiency

develop clean energy programs

continue to explore new financing options

Adaptation country studies to evaluate costs and policy

options

increase project portfolio

risk sharing mechanisms


December 2011

CLIMATE AND DEVELOPMENT KNOWLEDGE NETWORK


1 Name of Financing Source Climate and Development Knowledge Network

2 Sponsoring Organization CDKN is a cooperative project catalysed by the Governments of the Netherlands and the United Kingdom.

3 Address Climate and Development Knowledge Network 7 More London Riverside London SE1 2RT


[email protected] [email protected]

5 Objectives

The Climate and Development Knowledge Network supports decision-makers in designing and delivering climate compatible development by combining research, advisory services and knowledge sharing in support of locally owned and managed policy processes.

6 Region/Country Focus Global

7 Sector Focus All sectors including agriculture, forestry and land use, industry and power generation, and overall climate compatible development planning



Co-financing , Grant , Technical assistance 1. Grants for high quality, evidence-based

research on climate compatible development themes

2. Technical Assistance support to developing countries governments

3. Funding for innovative knowledge management and partnership activities


December 2011


CDKN as a whole is governed by a Network Council comprising senior level executives of its Alliance partners and its funding agencies, DfID (UK) and DGIS (Netherlands). The Alliance comprises Pricewaterhouse Coopers, Overseas Development Institute, Fundacion Futuro Latinoamericano, SouthSouthNorth, LEAD and INTRAC.


12


DKN supports research into a wide range of climate and development issues in order to respond to the breadth of demand, but CDKN’s research calls will develop specific expertise on a number of key themes.



Level 1: Basic criteria Project is for an eligible / priority country (see

regional strategies) and client Project is at the interface between evidence and

policy-making Project is at the interface between climate

change and development Project is demand-led Project is a reasonable size and scope given our

available budget and is likely to be value for money

Project falls within one of the TA service areas

The set of detailed criteria are published at: CDKN Technical Assistance Selection Criteria 11-12.


The procedures for applying for technical assistance from CDKN are outlined online. The procedures for applying for research funding via open research calls or via CDKN’s research innovation fund can be found online. To enquire about financial assistance for knowledge management, communications and partnership-building activities in climate compatible development, contact [email protected]


December 2011


December 2011




£0.5 million/project (most grants are £25,000 - £250,000)



CDKN homepage http://www.climatefinanceoptions.org/cfo/node/267



December 2011

CLIMATE FINANCE INNOVATION FACILITY (CFIF)


1 Name of Financing Source Climate Finance Innovation Facility (CFIF)

2 Sponsoring Organization

The programme has been financed through grants received from German Federal Ministry for the Environment, Nature Conservation and Nuclear Safety

3 Address 39-43 quai André Citroën, 75739 Paris, France


Eric Usher UNEP [email protected]

5 Objectives

The overall objective of the Facility is to promote and facilitate finance industry engagement in the climate mitigation sectors, particularly in the area of renewable energy and energy efficiency.


7 Sector Focus renewable energy (RE), energy efficiency (EE) and sustainable forestry



Carbon finance, Other , Risk management , Technical assistance. The Facility consists of two components, as described below.

• Component 1: Banker Training – offer a range of training courses and information tools to help bank staff build their knowledge of climate-mitigation technologies, including an understanding of their operating characteristics, key risks, and market potential.

• Component 2: Financial Product Development Support.

10 Management/Governance Initiators of the facility are the United Nations Environment Programme and the Frankfurt School of Finance & Management.


December 2011


Financial Institutions should make contact with the Facility to discuss a prospective application before submitting any documentation. The formal request includes:

• Completed application form • Brief description of the climate relevant

financial product or programme under consideration

• Preparatory activities requiring CFIF support

• Proposed Terms of Reference and budget (can be developed in consultation with the Facility)

• Short-list of consultants who could provide the required services (optional)

• Background information on the requesting party, indicating related financial services and experience

12


A broad range of activities are eligible for support, ranging from feasibility studies, to market assessments and legal reviews.


Financial Product Development Activities eligible for Support:

• Feasibility studies and market surveys • Financial modeling and risk analysis • Carbon finance • Political and regulatory analysis • Environmental risk analysis • Business planning • Staff training • Procedural development • Other activities also eligible

14 Proposal Evaluation Criteria Case by Case dependent

15 When and How to Apply Financial Institutions should make contact with the


December 2011

Facility to discuss a prospective application. Please note the deadline for the second round of proposal submissions is 21 October 2011.



Total amount €28.3 million


Direct targeted support of €50k to €150K per intervention to leverage product-development processes within financial institutions, helping to launch a stream of innovative financial instruments onto the market..



Climate Finance Innovation Facility http://www.climatefinanceoptions.org/cfo/node/201



December 2011

EAST AFRICAN DEVELOPMENT BANK (EADB)


1 Name of Financing Source East African Development Bank (EADB)


EADB is owned by the four member states of Kenya, Uganda, Tanzania and Rwanda. Other shareholders include the African Development Bank (AfDB), the Netherlands Development Finance Company (FMO), German Investment and Development Company (DEG), SBIC-Africa Holdings, Commercial Bank of Africa, Nairobi, Nordea Bank of Sweden, Standard Chartered Bank, London and Barclays Bank Plc., London.

3 Address


[email protected]

5 Objectives To promote sustainable socio-economic development in East Africa by providing development finance, support and advisory services.

6 Region/Country Focus Kenya, Uganda, Tanzania, Rwanda

7 Sector Focus Socio economic development

8 Technology Focus


loans


The Bank structure comprises of the following; • Governing Council • Advisory Panel • The Board of Directors • The Management

The Governing Council is the supreme governing body of the East African Development Bank as mandated by the Bank's Charter. The Governing Council is composed of the Ministers of Finance of the Member States. The Advisory Panel comprises eminent persons in international finance who provide the Bank with strategic guidance on its mandate.


December 2011

All powers of the Bank are, subject to the provisions of the Bank's Charter, vested in the Board of Directors. The Board comprises Finance Permanent Secretaries of the member states, a representative from African Development Bank (AfDB), a representative from DEG/FMO and four representatives from the member states' private sectors.


12


Short Term/Working Capital Loans Are offered for procurement of raw materials, spare parts and small auxiliary equipments and are repayable over a period of 1 to 2 years. Medium Terms Loans These are payable over a period of 2 to 4 years and are also offered in either foreign and / or local currency, depending on the clients needs. Long Term Loans These loans, with maturities of 5 to 12, form the bulk of our portfolio and are offered in either foreign and / or local currency, depending on the clients needs.


All Bank financing must be adequately secured. Security required normally includes but not limited to first legal charge on the movable and immovable project assets. This may be supplemented by other security, which includes Bank or Insurance Guarantees, Promissory Notes, and/or Shareholders’ Guarantees.


To enhance its original development objectives, EABD places emphasis on:

• Projects that have regional orientation (cross-border projects)

• Projects with a comparative advantage in the utilization of local raw material in the production of goods for local consumption in the region or for export

• Projects that utilize resources common to the member states



December 2011


Repayments: Loans are serviced in the currency of disbursement. Loan repayment period are usually determined by the projected cash flow of the particular project.



The Bank’s exposure in one project is limited to the following:

• The total amount of EADB financing including commitments under a guarantee in favor of the project shall not exceed 50% of the project’s net worth.

• EADB equity investment in a single enterprise shall normally not exceed 25% of the enterprise’s authorized share capital


20 Sources for Further Information http://www.eadb.org/



December 2011

EBRD (EUROPEAN BANK FOR RECONSTRUCTION AND DEVELOPMENT) CLIMATE CHANGE FINANCE


1 Name of Financing Source EBRD (European Bank for reconstruction and Development) Sustainable Energy Initiative (SEI)

2 Sponsoring Organization EBRD

3 Address

European Bank for Reconstruction and Development Headquarters One Exchange Square London EC2A 2JN United Kingdom Energy Efficiency and Climate Change Team


Terry McCallion Director [email protected]

5 Objectives

The EBRD’s Sustainable Energy Initiative (SEI) was launched in 2006 to address the twin challenges of energy efficiency and climate change in the region – which is one of the most energy intensive in the world.

Specific objectives of SEI phase 2 include:

• EBRD SEI financing target range of €3 to 5 billion for total project value of €9 to 15 billion;

• Carbon emissions reduction range of 25 to 30 million tonnes per annum; and

• Technical assistance grant funding target of €100 million and investment grant funding target of €250 million.

6 Region/Country Focus EBRD countries of operations


December 2011

7 Sector Focus Energy efficiency, renewable energy, climate change mitigation and adaptation, energy waste, energy security



Technical assistance Grant co-financing

10 Management/Governance EBRD Board of Directors


12


SEI achievements have been possible with the combination of dedicated financing instruments with a package of technical assistance and in some cases targeted grant co-financing.


SEI market segments include: • large-scale industrial energy efficiency

• Sustainable energy financing facilities through financial intermediaries

• Power sector energy efficiency

• Renewable energy • Municipal infrastructure energy efficiency,

including District heating and public transport network rehabilitation

Carbon market support.





SEI investments since 2006 has been Euros 8.0 billion with total project value of Euros 44 billion



December 2011



http://www.ebrd.com/downloads/research/factsheets/sei.pdf www.ebrd.com/sei http://www.ebrd.com/pages/sector/energyefficiency/sei.shtml


Following are the tools used by EBRD: • Direct investments by the EBRD in the

form of private, non sovereign and sovereign guaranteed loans, direct equity, equity funds and credit lines in the context of individual energy efficiency and renewable energy projects financed by the Bank;

• Co-financing with the private financial sector, public sources and other international financial institutions (IFIs) as part of the project financing plan

• Project preparation support in the form of technical cooperation and grant co financing to support implementation of selected SEI components

• Energy audits to clients including sectors such as industrial, buildings and power generation and implementation support in the form of energy management training and energy management systems to ensure that sustained energy efficiency gains are achieved

• Institution building and policy dialogue to support the effective development and implementation of dedicated policies, and for enhancing the legal, regulatory, technical and organisational capacity in the countries of operations (e.g. buildings standards)


December 2011

EIB (EUROPEAN INVESTMENT BANK)


1 Name of Financing Source EIB (European Investment Bank)

2 Sponsoring Organization The majority of EIB lending is attributed to promoters in the EU countries (about 90 percent of the total volume.

3 Address European Investment Bank 100 boulevard Konrad Adenauer Luxembourg


Information desk Communication department (online contact form available)

5 Objectives

In accordance with EU economic policy objectives:

• Promotion of economic and social cohesion (development of poorer regions) in the EU

• Improvement of EU transport and telecommunications infrastructure (rail, air, road connections and bridges)

• Secure energy supplies - production, transfer and distribution, more efficient energy use, alternative energy supplies

• Development of a competitive, innovative and knowledge-based European economy (i2i)

• Investment in human capital (schools, universities, laboratories, research centres, hospitals etc.)

• Natural and urban environment schemes (water, waste, cleaner air, urban transport etc.)

• Development of small and medium sized enterprises

• Industrial projects improving EU competitiveness

• Projects that support EU's external co-operation and development policies


December 2011


EIB lending is governed by a series of mandates from the European Union in support of EU development and cooperation policies in partner countries

7 Sector Focus Environmental sustainability, energy, Trans- European Networks (TENS)

8 Technology Focus none


Loans The EIB does not provide grants or venture capital. European Union grants are managed by the European Commission. The European Investment Fund (EIF) provides venture capital.



No special formalities are involved for the submission of applications to the EIB for individual loans. Project promoters are required simply to provide the Bank's Operations Directorate with a detailed description of their capital investment together with the prospective financing arrangements.

12



To be eligible projects must contribute to EU economic policy objectives. Protect and improve the natural and built environments and foster social well-being, in support of EU policy, as elaborated in the Sixth Environmental Action Programme (EAP) "Environment 2010: our future, our choice


Project appraisal is carried out by the EIB's teams of engineers, economists and financial analysts, in close cooperation with the promoter. Criteria for a typical EIB appraisal are tailored to each specific project. Results are included in the project report to the Board of Directors for a financing decision.


December 2011

• eligibility (consistency with the EU's priority objectives)

• Overall quality and soundness Project quality is based on: Technical scope:

• definition of the project's "technical description";

• technical soundness, innovative technology, risks and mitigation measures;

• information on capacity for products/services.

Implementation: • promoter capability to implement the

planned project; • information on timing and employment

during implementation; Operation:

• promoter's capability to operate and maintain the project;

• information on production/service, operating and maintenance costs, employment during operational life.

Procurement: • compliance with applicable legislation and

EIB guidelines. Environmental impact:

• compliance with applicable legislation; • information on environmental impact

assessment. Market and demand:

• analysis of the products/services demand over the project's life, with reference to sectoral studies of the Projects Directorate.

Investment cost: • information on project costs and its detailed

components; • comparison with cost of similar projects.

Profitability:


December 2011

• information on financial profitability and related indicators (e.g. rate of return);

• information on economic profitability.


Initial contacts to discuss a proposed project can be in any form, by telephone, fax, e-mail or letter. The project promoter should provide sufficient information to allow the EIB to assess whether the project adheres to EIB lending objectives and has a well-developed business plan. Special Case: Projects under EUR 25 million: For projects where the total cost is under EUR 25 million, the EIB provides intermediated loans (credit lines) to local, regional and national banks. The lending decision for EIB loans via credit lines remains with the financial intermediary. Promoters interested in EIB financing for projects under EUR 25 million should contact the banks and other intermediaries involved directly with a detailed description of their capital investment together with the prospective financing arrangements.



In 2010, the EIB signed loan agreements for a total amount of EUR 28.9bn. These figures do not include environmental components of projects where the overall objective is not directly related to the environment.



The EIB monitors the project from the signature of the loan contract through the project implementation and operation phase until the loan is paid back. Monitoring requirements are determined according to the characteristics of the project. In particular, the Bank monitors the servicing of the loan, checks that the funds are being used in line with the objectives and projections and keeps itself informed of developments concerning the promoter and its partners. It also ensures that the physical execution of the project is in accordance with the contract and evaluates the results of the investment.


December 2011

Financial monitoring • The Risk Management Directorate is

responsible for the financial monitoring of loans signed in the European Union and the restructuring of operations.

Physical monitoring • During the project appraisal phase the

Projects Directorate detects potential problems, in order to enable the necessary corrective measures to be taken where required.

• During the project implementation phase, the promoter is obliged to inform the Bank in the event of a significant departure from what was agreed originally.

• Lastly, a project completion report establishes any differences with respect to the original plans.

• Some projects, such as public-private partnership projects, require monitoring following their completion.

Ex post evaluation • Ex post evaluations, which originally

focused solely on EIB activities, have been extended to encompass those of the Group and now also include the evaluation of the EIF’s venture capital operations and an interim evaluation of the FEMIP Trust Fund.

• The studies and evaluation reports enable the EIB Group to draw lessons from past experience. The purpose of the recommendations that are made is to improve future operations and report on the implementation of EU policies.

• The ex post evaluations are posted on the EIB or EIF website. The Bank also publishes an annual report, which contains a summary of the evaluations carried out during the financial year.


December 2011


http://www.eib.org



December 2011

EIB CLIMATE CHANGE TECHNICAL ASSISTANCE FACILITY


1 Name of Financing Source EIB Climate Change Technical Assistance Facility

2 Sponsoring Organization European Investment Bank (EIB)

3 Address European Investment Bank 100 boulevard Konrad Adenauer Luxembourg


Peter Carter European Investment Bank Head of Sustainable Development Unit [email protected]

5 Objectives

To promote the development of CDM and JI projects by providing advance finance for the transaction costs and by supervising the development of the carbon asset potential of an underlying project throughout the project cycle to the carbon credit certification stage.

6 Region/Country Focus CDM and JI eligible country partners

7 Sector Focus Mitigation, Carbon Capture & Storage (CCS),, Energy Efficiency, Forestry, Fuel Switching, Fugitive Methane



Grant , Loan


• The Management Committee is informed of the main features of the planned project and the principal aspects on which the appraisal will focus;

• An appraisal team composed of representatives of all Directorates concerned is set up to prepare the appraisal. A timetable is established;

• A site visit to the promoter is organised by the Directorate General for Lending


December 2011

Operations. • The Management Committee make

recommendations to the Board of Directors as to whether a project ought to be accepted or rejected.


The project promoter should provide sufficient information to allow the EIB to assess whether the project adheres to EIB lending objectives and has a well-developed business plan.

12


The carbon crediting activities for which the CCTAF can provide funding include:

• Carbon credit pre-feasibility study; • Preparation of carbon credit documentation

(Project Design Document); • Validation of the Project Design Document; • Registration of the project; • Carbon credit sales activities (preparation of

a sales memorandum, Emission Reduction Purchase Agreement);

• Verification of emission reductions; • Issue and transfer of credits.

13 Eligibility Criteria Any carbon mitigation project that will be eligible for CDM or JI crediting.

14 Proposal Evaluation Criteria For individual loans- A well developed business plan


No special formalities are involved for the submission of applications to the EIB for individual loans. Project promoters are required simply to provide the Bank's Operations Directorate with a detailed description of their capital investment together with the prospective financing arrangements.


At least 30 percent of the costs are paid after contract signature and the rest is paid upon receipt of invoices sent to the EIB and after submission to the EIB of the completed report to the satisfaction of the Bank.


Total funding of EUR 5 million


December 2011



20 Sources for Further Information CCTAF Guidelines


END-USER FINANCE FOR ACCESS TO CLEAN ENERGY TECHNOLOGIES IN SOUTH AND SOUTH-EAST ASIA (FACET)


1 Name of Financing Source End-User Finance for Access to Clean Energy Technologies in South and South-East Asia (FACET)


This project is funded by the German Federal Ministry for the Environment, Nature Conservation and Nuclear Safety within the framework of the International Climate Initiative.

3 Address

Frankfurt School – The UNEP Collaborating Centre for Climate & Sustainable Energy Finance Sonnemannstraße 9-11 60314 Frankfurt am Main Germany [email protected] www.frankfurt-school.de


Torsten Becker International Advisory Services Project Manager [email protected] [email protected]

5 Objectives

FACET’s main goal is to initiate and increase domestic bank lending to end-users of small-scale clean energy technologies in South and South-East Asia.

6 Region/Country Focus South and South-East Asia


December 2011

7 Sector Focus Mitigation, Energy , Low-Carbon , Renewable Energy

8 Technology Focus Clean energy technologies such as solar water heating systems, photovoltaic systems, and biogas digesters


Co-financing , End-user payment , Interest rate subsidy , Loan , Loan guarantee , Technical assistance


FACET is a UNEP initiative supported by the Federal Ministry for the Environment, Nature Conservation and Nuclear Safety (BMU), in cooperation with the Frankfurt School.


Contact the team for more information

12


FACET combines technical assistance with a temporary financial support mechanism. FACET assistance can take the form of one of three main practice areas: Technical Assistance:

• Market research to assess the barriers to low carbon technologies, analyze the demand for financial support mechanisms, identify and assess target markets;

• Training and business planning of local banking partners: programme planning, credit structure, loan programme roll-out, marketing, operations and reporting;

• Support for equipment vendors to assure the quality of the equipment financed and its value as loan security, as well as for the distribution of loans;

• Marketing support for new lending products: raising customer awareness through targeted communication campaigns and other communication channel;

• Creation of linkages to carbon markets: support integration of carbon finance into end-user finance operations with a focus on programmatic CDM.

Financial Incentives: • Transaction cost sharing to structure lending

programmes: credit structure, refinancing, credit


December 2011

analysis, underwriting guidelines, collection & administration;

• Temporary interest rate subsidies with a view to prime the market, with subsidies being phased out over time;

• Incentives such as green mortgages or refinancing structures that allow clean technologies to be amortised over periods that match their energy savings.

Support for Risk Mitigation/Credit Enhancement: • Capacity building of lenders and potential

guarantors, through financial and business coaching and advisory services;

• Credit insurance and/or guarantee funds managed by independent entities which will undertake guarantee liabilities to the lenders’ benefit.

13 Eligibility Criteria Clean energy projects in an identified pilot project country


The FACET programme will support a variety of renewable energy technologies, provided that proposals can pass a qualification process for technology deployment, capacities within the financial sectors, and the potential for clean energy lending.

15 When and How to Apply Contact the team for more information


Contact the team for more information


Total amount €30-69 million


Each scheme will combine €1 million from the German government with €5 to €10 million of bank co-financing in order to finance 10,000 to 20,000 loans for a targeted low-carbon technology.


No information


FACET homepage http://www.climatefinanceoptions.org/cfo/node/284



December 2011

GEF (GLOBAL ENVIRONMENT FACILITY) CLIMATE CHANGE TRUST FUND


1 Name of Financing Source GEF (Global Environment Facility) Climate Change Trust Fund

2 Sponsoring Organization The UN Global Environment Facility (GEF)

3 Address

Global Environment Facility Climate Change Mitigation 1818 H Street NW Washington DC 20433


Osamu Mizuno [email protected] GEF Secretariat at [email protected]

5 Objectives

The objective of this part of the fund is to help developing countries and economies in transition to contribute to the overall objective of the United Nations Framework Convention on Climate Change (UNFCCC). The projects support measures that minimize climate change damage by reducing the risk, or the adverse effects, of climate change.

6 Region/Country Focus Developing countries and countries with economies in transition

7 Sector Focus

GEF work focuses on the following main areas: • Biodiversity • Climate Change (Mitigation and

Adaptation) • Chemicals • International Waters • Land Degradation • Sustainable Forest Management / REDD + • Ozone Layer Depletion The Climate Change Trust Fund specially focuses on Climate Change Mitigation, Climate Change Adaptation.



December 2011


Co-financing , Grant


The GEF partnership includes 10 agencies: the UN Development Program; the UN Environment Program; the World Bank; the UN Food and Agriculture Organization; the UN Industrial Development Organization; the African Development Bank; the Asian Development Bank; the European Bank for Reconstruction and Development; the Inter-American Development Bank; and the International Fund for Agricultural Development.

The Scientific and Technical Advisory Panel provides technical and scientific advice on the GEF’s policies and projects.

The Scientific and Technical Advisory Panel (STAP) provides independent advice to recommend to the GEF on scientific and technical aspects of programs and policies. The members of STAP are appointed by the Executive Director of UNEP, in consultation with the GEF’s CEO, the Administrator of UNDP, and the President of the World Bank. The Independent Office of Monitoring and Evaluation (M&E) provides a basis for decision-making on amendments and improvements of policies, strategies, program management, procedures and projects; promotes accountability for resource use against project objectives; and documents and provides feedback to subsequent activities, and promote knowledge management on results, performance and lessons learned.


Complete Project Identification Form at first instance. Templates are available at http://www.thegef.org/gef/guidelines

12


Adaptation, Capacity Building, Mitigation, Agriculture, Climate-Resilient, Energy, Energy Efficiency, Forestry, Low-Carbon, Renewable Energy, Sustainable Land Management, Transport, Water.

Support includes a range of components such as investment, technical assistance, establishment of funds, risk management, PES and others.


December 2011


GEF funding is in accordance with the following eligibility criteria: (a) GEF grants made available within the framework of the financial mechanisms of the UNFCCC should be in conformity with the eligibility criteria decided by the Conference of the Parties. (b) A country is an eligible recipient of GEF grants if it is eligible to borrow from the World Bank or if it is an eligible recipient of UNDP technical assistance through its country Indicative Planning Figure (IPF). (c) GEF concessional financing in a form other than grants that is made available within the framework of the financial mechanism of the conventions shall be in conformity with eligibility criteria decided by the Conference of the Parties of each convention. GEF concessional financing in a form other than grants may also be made available outside those frameworks on terms to be determined by the Council.


Any eligible individual or group may propose a project. However, to be taken into consideration, a project proposal has to fulfil the following criteria:

• It is undertaken in an eligible country. It is consistent with national priorities and programs.

• It addresses one or more of the GEF Focal Areas, improving the global environment or advance the prospect of reducing risks to it.

• It is consistent with the GEF operational strategy.

• It seeks GEF financing only for the agreed-on incremental costs on measures to achieve global environmental benefits

• It involves the public in project design and implementation.

It is endorsed by the government(s) of the country/ies in which it will be implemented

15 When and How to Apply The GEF projects are developed by host countries in cooperation with 10 GEF Agencies. An application can be made by submitting a Project


December 2011

Identification Form (PIF) to the GEF secretariat through a GEF Agency(s) with an endorsement letter of the Operational Focal Point of the host country. The first step is Council approval of a project concept (PIF). This step can be skipped if the grant request is below US$ 2 million and no PPG is needed.


For full-sized projects (>$1 million), decision for projects are made through three steps before implementation; the GEF CEO clearance of the PIF, the Council approval, and the GEF CEO endorsement of the project.

Medium-sized projects ($1 million or under) and enabling activities are approved under expedited procedures, with approval authority delegated to the GEF CEO.

Full-sized projects have to be endorsed by the CEO within 22 months from the date of Council approval; medium-sized projects have to receive the approval of the CEO of the final project document within 12 months from the PIF approval.


To date, USD 3 billion has been allocated for mitigation and enabling activities and USD 400 million for adaptation.


GEF provides grants to various types of projects ranging from several thousand dollars to several million dollars. These are Full-Sized projects, Medium-Sized Projects, Enabling Activities, Targeted Research, and Programmatic Approaches,


Standard GEF Monitoring and Evaluation Policy


http://thegef.org http://www.gefonline.org/ http://www.thegef.org/gef/climate_change

http://www.climatefundsupdate.org/listing/gef-trust-fund



December 2011


December 2011

GEF SMALL GRANTS PROGRAMME


1 Name of Financing Source GEF Small Grants Programme

2 Sponsoring Organization Global Environment Facility

3 Address

Central Programme Management Team (CPMT) Daily News Building, 220 East 42nd Street, 21st Floor New York, NY, 10017


Ms. Tehmina Akhtar Deputy Global Manager [email protected] [email protected]

5 Objectives

The principle objectives of the GEF Small Grants Programme are to:

• Develop community-level strategies and implement technologies that could reduce threats to the global environment if they are replicated over time;

• Gather lessons from community-level experience and initiate the sharing of successful community-level strategies and innovations among CBOs and NGOs, host governments, development aid agencies, GEF and others working on a regional or global scale, and;

• Build partnerships and networks of stakeholders to support and strengthen community, NGO and national capacities to address global environmental problems and promote sustainable development.

6 Region/Country Focus Worldwide in developing countries.

7 Sector Focus

The main focal areas of the programme are climate change abatement and adaptation, conservation of biodiversity, protection of international waters, reduction of the impact of persistent organic pollutants and prevention of land degradation.


December 2011



Grant


HQ serves as liaison with the GEF Secretariat and GEF Council. As executing agency, UNOPS has responsibility for administrative and financial matters. A locally recruited National Coordinator is appointed to carry out day-to-day management of the programme and serve as secretary to the NSC. An SGP office is established either in UNDP or in a host NGO. The National Coordinator, working with the NSC, reaches out to the NGO community and CBOs to inform them of availability of grants, and receives and screens proposals.


12


Mitigation, Energy , Energy Efficiency , Low-Carbon , Renewable Energy , Transport , Urban

13 Eligibility Criteria Community-based or non-governmental organizations (CBOs or NGOs) in 101 SGP participating countries


In the area of climate change, SGP-eligible activities must demonstrate the removal of local barriers to energy conservation and energy efficiency, promote the adoption of renewable energy, or promote environmentally sustainable transportation options.


The application process follows these seven steps: 1. The project proponent contacts the SGP

National Coordinator (in the local UNDP country office or in the host NGO) to receive project application guidelines and forms.

2. With assistance from the National Coordinator and using the standard SGP


December 2011

format, the proponent prepares a brief project concept paper and submits this to the coordinator.

3. The national coordinator reviews and pre-screens the concept paper according to GEF criteria and criteria adopted by the National Steering Committee (NSC) for activities in that country.

4. If the project is judged eligible, the project proponent prepares a project proposal; in some cases, this step may be supported by a planning grant.

5. Completed project proposals are submitted by the National Coordinator or the NSC.

6. The NSC reviews the proposal and either accepts it, rejects it, or returns it to the proposer with a request that further work be done on formulating and refining the project data.

7. Approved proposals enter the national SGP work programme and grant amount is paid.


The grants are channeled directly to the implementing organizations by the UNDP/GEF.

SGP grants are usually paid in three instalments: an up-front payment to initiate the project; a mid-term payment upon receipt of a satisfactory progress report; and a final payment on receipt of a satisfactory project completion and final report.


Total Amount- $50,000 per project



SGP's monitoring and evaluation system is intended to provide stakeholders and partners with information about the status and results of individual projects, the progress of country programmes and the achievement of overall programme objectives. SGP views monitoring and evaluation above all as a participatory and forward-looking process that


December 2011

enables capacity building and learning, maintains accountability, promotes sustainability, and provides opportunities to identify and communicate lessons learned from project and programme experiences. In the case of SGP, monitoring and evaluation are required at three levels - project, country and global.


SGP homepage SGP - UNFCCC page



December 2011

GLOBAL CLIMATE CHANGE ALLIANCE (GCCA)


1 Name of Financing Source Global Climate Change Alliance (GCCA)

2 Sponsoring Organization Multilateral banks (European Commission Development)

3 Address Only online form available


Mr. Mamadou Diakhite Global Climate Change Alliance [email protected]

5 Objectives

The GCCA has two main objectives: Deepening the policy dialogue between the EU

and developing countries on climate change, especially in the context of the international negotiations for a post-2012 climate regime, and

Stepping up support to target countries to implement priority adaptation and mitigation measures and to integrate climate change issues into their development strategies.


Low-income countries like small island developing states (SIDS) and least developed countries (LDCs). Pilot actions have been identified in Vanuatu, Tanzania, Cambodia, Maldives, Bangladesh, Guyana, Jamaica, Mali, Mauritius, Rwanda, Senegal and Seychelles.

7 Sector Focus

1. Adaptation to climate change: 2. Reducing emissions from deforestation (REDD) 3. Enhancing the participation of developing countries in the CDM 4. Promoting disaster risk reduction



Grant , ODA , Technical assistance

10 Management/Governance The GCCA is a cooperative initiative of the Directorates General for Development, Environment and External Relations implemented by EuropeAid. The GCCA will be a joint financing


December 2011

mechanism managed by the Commission.


12


Adaptation to CC - Development of adaptation plans in vulnerable countries other than LDCs; supporting implementation of NAPAs developed with GEF support; financing pilot adaptation projects in the water and agricultural sectors and on sustainable natural resource management (NRM).

Reducing emissions from deforestation - Building reporting systems and national capacity to monitor deforestation; strengthening institutions and developing national strategies to combat deforestation; supporting innovative performance-based mechanisms to provide positive incentives for REDD; expanding programmes like Forest Law Enforcement, Governance and Trade (FLEGT) that improve sustainable NR governance and reduce emissions.

Enhancing participation in CDM - Building capacity for participation and providing technical assistance for cost-effective project development; showcasing projects that are better suited to LDCs and SIDS and developing appropriate methodologies.

Promoting Disaster Risk Reduction - Improving and extending climate monitoring, forecasting and information systems and converting data into effective preparedness measures; identifying measures to implement the Hyogo Framework for Action.

Integrating CC into Poverty Reduction Efforts - Integrating adaptation plans into poverty reduction strategies and development strategies; developing institutional capacity in LDCs and SIDS for mainstreaming; climate proofing EU funded programmes and projects.

Starting in 2011, 10 training workshops on climate change will be organised in the different regions


December 2011

(Asia, Caribbean, Pacific and Africa).


The GCCA provides support to poor developing countries, particularly the Least Developed Countries (LDCs) and Small Island Development States (SIDS).


Each user should consider the following when devising a potential GCCA project:

• The country has already received Budget Support through the European Commission or other donors.

• There is an EC Delegation with sufficient capacity to prepare and follow up implementation of the GCCA programme.

• The country should preferably be involved in the negotiations under the United Nations Framework Convention on Climate Change (UNFCCC).

• Identifying countries and priority areas of intervention could more technical in nature (for example, exposure to risk, adaptive capacity, climate data availability and projected climate changes).

15 When and How to Apply Interested stakeholders should contact the GCCA directly to begin discussing potential projects.


Fund disbursement is reported regularly through the GCCA Support Facility. Short updates will be made widely available to stakeholders through a dedicated GCCA website. There will be an annual report summarising main activities and results. The annual reports will be passed on for information to the Council.


Total amount EUR 139.6 million




Global Climate Change Alliance UNFCCC page on GCCA


December 2011

http://www.climatefinanceoptions.org/cfo/node/202



December 2011

IDB - SUSTAINABLE ENERGY AND CLIMATE CHANGE INITIATIVE (SECCI)


1 Name of Financing Source IDB - Sustainable Energy and Climate Change Initiative (SECCI)


The SECCI Funds were created from funds put forward by the IDB (SECCI IDB fund) and by International Donors (SECCI Multi-Donor Fund: Spain, Germany, Italy, Finland, United Kingdom and Japan)

3 Address IDB Headquarters 1300 New York Avenue, N.W. Washington, D.C. 20577, USA


[email protected]

5 Objectives

To facilitate an expanded application of renewable energy and energy efficiency technologies in Latin America and the Caribbean, to finance and support greenhouse gas emission reduction projects and biofuel development, and to promote and finance adaptation strategies and actions to reduce vulnerability risks presented by climate change in the countries of LAC.


Eligible Countries: Argentina, Bahamas, Barbados, Belize, Bolivia, Brazil, Chile, Colombia, Costa Rica, Dominican Republic, Ecuador, El Salvador, Guatemala, Guyana, Haiti, Honduras, Jamaica, Mexico, Nicaragua, Panama, Paraguay, Peru, Suriname, Trinidad and Tobago, Uruguay, Venezuela

7 Sector Focus Alternative energy, sustainable agriculture, climate-friendly transportation and climate resilient resource management

8 Technology Focus Best available technologies to ensure economic viability, social equity, and environmental integrity.


Grant , Technical assistance

10 Management/Governance The SECCI initiative is coordinated by the Chief of the IDB’s Sustainable Energy and Climate Change Unit. In order to grant eligibility to a proposal the SECCI coordinator receives input from other IDB


December 2011

technical departments, from country coordinators and budget officers, whom are all part of the SECCI eligibility committee.


No Information

12


Mitigation: SECCI finances: (i) feasibility studies for the preparation of renewable energy projects; (ii) document analysis and preparation to be presented to regulated and voluntary carbon markets; (iii) energy efficiency audits.

Adaptation: SECCI finances: (i) climate risk and vulnerability assessments; (ii) climate modeling initiatives; (iii) sectors studies in priority areas

Capacity Building: SECCI finances outreach and capacity building initiatives related to climate change


Letter of Non-Objection: A letter on non-objection is required from the government

Counterpart Financing: 20 percent counterpart financing is required

14 Proposal Evaluation Criteria No Information

15 When and How to Apply An expression of interest form should be submitted, which is available online.


No Information


Total amount USD $40 Million


Maximum Financed: 1,000,000 for technical cooperation; 1,500,000 for investment grants.


No Information


www.iadb.org/secci http://www.climatefinanceoptions.org/cfo/node/62



December 2011

IFC PARTIAL CREDIT GUARANTEES


1 Name of Financing Source IFC Partial Credit Guarantees

2 Sponsoring Organization International Finance Corporation

3 Address International Finance Corporation 2121 Pennsylvania Avenue, NW Washington, DC 20433 USA


International Finance Corporation [email protected]

5 Objectives

To allow IFC to use its international triple-A credit rating to help clients diversify their funding sources, extend maturities, and obtain financing in their currency of choice, including local currency


7 Sector Focus Adaptation , Mitigation

8 Technology Focus


Co-financing , Debt , Loan , Risk management , Structured financing

10 Management/Governance IFC Board of Directors


According to IFC investment criteria and Mission

12


IFC partial credit guarantees can be used for different kind of projects Although all IFC guarantees are structured to provide credit enhancement, for cross-border issues IFC is able to offer a structure that mitigates transfer and convertibility (T&C) risk as well.

13 Eligibility Criteria According to IFC investment criteria and Mission

14 Proposal Evaluation Criteria According to IFC investment criteria and Mission


Partial guarantees: Local currency guarantees are most appropriate for a borrower that has local currency revenues, but lacks access to local currency financing of the desired tenor.


December 2011

Foreign currency guarantees work best for a borrower that cannot access international markets on its own because of the high-risk premium associated with the country in which it is domiciled








http://www.ifc.org/ifcext/treasury.nsf/Content/PartialCreditGuarantee http://www.ifc.org/ifcext/about.nsf/Content/Contacts http://www.climatefinanceoptions.org/cfo/node/152



December 2011

IFC RISK SHARING FACILITY


1 Name of Financing Source IFC Risk Sharing Facility

2 Sponsoring Organization IFC



International Finance Corporation (IFC) [email protected]

5 Objectives To allow clients to transfer credit risk to IFC from their own portfolio or from a new portfolio they originate.

6 Region/Country Focus none

7 Sector Focus Adaptation, Mitigation



Risk Management

10 Management/Governance IFC Board of Directors


Depends on the transaction. In general according to IFC investment procedures

12


The RSF product allows a client originator and IFC to form a partnership with the goal of introducing a new business or expanding an originator’s target market. In addition to sharing the risk of loss associated with the covered asset portfolio, IFC is often able to arrange for the provision of advisory services designed to expand a bank’s or corporation’s capacity to originate, monitor, and service the assets.


Risk sharing facilities are available to cover loans from a wide variety of sectors, including (but not limited to), mortgage, consumer, student, school, energy efficiency, and SME businesses. Portfolios of corporate receivables can be considered as well. The RSF typically covers assets newly originated during the term of the RSF, but, under certain circumstances, coverage may also be extended to


December 2011

assets originated prior to the initiation of the RSF coverage

14 Proposal Evaluation Criteria Depends on the transaction. In general according to IFC investment procedures



Depends on the transaction


Project dependent






http://www.ifc.org/ifcext/treasury.nsf/Content/RiskSharing http://www.climatefinanceoptions.org/cfo/node/151


The RSF product by itself is most appropriate for originators requiring credit risk protection but not funding. If funding and credit protection are both desired, IFC can offer a loan in conjunction with a RSF to help build the portfolio of eligible assets.


December 2011

IFC SECURITIZATIONS


1 Name of Financing Source IFC Securitizations

2 Sponsoring Organization International Finance Corporation



[email protected]

5 Objectives

To help International Finance Corporation (IFC) clients obtain financing that would otherwise be unavailable or unsuitable to them because of perceived credit risk.


7 Sector Focus Projects will be considered on a case-by-case basis



Risk management , Structured financing


IFC participates in domestic and cross-border securitizations, generally by investing in the mezzanine portion of risk. This investment generally takes the form of either a partial guarantee on the senior tranche, or a partial guarantee on the investment vehicle, and can be denominated in the client's currency of choice, including local currency. As the guarantee is tailored to specific transactions, IFC gets involved early in the process, taking on a lead role in structuring the risk which it will retain.


12

Eligible Projects/Programs (whether only for soft items such as capacity building or policy advice, etc, or also for hard items, such as for plant and equipment) or

In addition, IFC provides liquidity support, currency and interest rate swaps, and warehouse line facilities to build up asset pools for securitization. Investments are also made in the longest tranches of a deal to help clients access longer-term funding.


December 2011

Organizations


Projects will be considered on a case-by-case basis. Securitization is most appropriate for a company that is seeking balance sheet management, or a company with a specific pool of assets which is better than its overall credit quality. In principle, any asset pool with predictable cash flows can be securitized, even those which are non-performing, as long as the timing and amount of recovery is predictable.

14 Proposal Evaluation Criteria Projects will be considered on a case-by-case basis

15 When and How to Apply No Information online


No Information online


No Information online


Projects will be considered on a case-by-case basis


Projects will be considered on a case-by-case basis


http://www.ifc.org/ifcext/treasury.nsf/Content/Securitization http://www.ifc.org/ifcext/about.nsf/Content/Contacts http://www.climatefinanceoptions.org/cfo/node/150



December 2011

INTERNATIONAL TROPICAL TIMBER ORGANIZATION (ITTO)


1 Name of Financing Source International Tropical Timber Organization (ITTO)

2 Sponsoring Organization Established under United Nations. The major donors are the governments of Japan, Switzerland, the USA, the Netherlands and the EU.

3 Address

International Tropical Timber Organization International Organizations Center, 5th Floor Pacifico-Yokohama 1-1-1, Minato-Mirai, Nishi-ku, Yokohama, 220-0012 Japan


[email protected]

5 Objectives

ITTO develops internationally agreed policy documents to promote sustainable forest management and forest conservation and assists tropical member countries to adapt such policies to local circumstances and to implement them in the field through projects. In addition, ITTO collects, analyses and disseminates data on the production and trade of tropical timber and funds a range of projects and other action aimed at developing industries at both community and industrial scales.


Producing Members Africa: Cameroon, Central African Republic, Congo, Côte d'Ivoire, Democratic Republic of the Congo, Gabon, Ghana, Liberia, Nigeria, Togo Asia & Pacific: Cambodia, Fiji, India, Indonesia, Malaysia, Myanmar, Papua New Guinea, Philippines, Thailand, Vanuatu. Latin America Bolivia, Brazil, Colombia, Ecuador, Guatemala, Guyana, Honduras, Mexico, Panama, Peru, Suriname,Trinidad and Tobago, Venezuela. Consuming Members: Australia, Canada, China, Egypt, European Union (Austria, Belgium/Luxembourg, Denmark, Finland, France, Germany, Greece, Ireland, Italy,


December 2011

Netherlands, Poland, Portugal, Spain, Sweden, United Kingdom), Japan, Nepal, New Zealand, Norway, Republic of Korea, Switzerland, United States of America.

7 Sector Focus Tropical forest management, the marketing and trade of tropical timber and other forest products, and the development of forest-based industries



All projects are funded by voluntary contributions, mostly from consuming member countries.


The governing body of the ITTO is the International Tropical Timber Council, which is composed of all the Organization's members. ITTO has two categories of membership: producing and consuming. Annual contributions and votes are distributed equally between these two groups, which are called caucuses. Within each caucus, the dues and votes of individual members are calculated based on tropical timber trade and, in the case of producers, also on the extent of tropical forests within the country. The Council is supported by four committees, which are open to all members and observers and provide advice and assistance to the Council on policy and project issues. Three of the committees deal with key areas of policy and project work: economic information and market intelligence; reforestation and forest management; and forest industry. These committees are supported by the Expert Panel for the Technical Appraisal of Projects and Pre-projects, which reviews project proposals for technical merit and relevance to ITTO objectives. The fourth committee, on Finance and Administration, advises the Council on matters related to the budget and other funding and administrative issues concerning the management of the Organization. ITTO's organizational structure is shown graphically in it's current Action Plan. Non-member stakeholders have established two advisory groups to facilitate their participation in the Council and to provide input to the Council's decision-making process. These are the Trade Advisory Group (TAG) and the Civil Society


December 2011

Advisory Group (CSAG). ITTO's small secretariat of about 35 staff is based in Yokohama, Japan. It is headed by an Executive Director, who is responsible to the Council for the administration and operation of the Agreement in accordance with decisions made by the Council. The Organization also has regional officers in Latin America and Africa to assist with project monitoring and other duties.


In accordance with the ITTO project cycle.

12


Examples include pilot and demonstration projects, human resource development projects, and research and development projects; the Organization's Action Plan sets out the types of activities that it should undertake in project and policy work.



15 When and How to Apply Members may submit project proposals to the Council for review and financing.



Since it became operational in 1987, ITTO has funded more than 800 projects, pre-projects and activities valued at more than US$300 million.




http://www.itto.int/



December 2011

LATIN AMERICAN CARBON, CLEAN AND ALTERNATIVE ENERGIES PROGRAMME (PLAC+E)


1 Name of Financing Source Latin American Carbon, Clean and Alternative Energies Programme (PLAC+E)

2 Sponsoring Organization Corporacion Andina de Fomento (CAF) Development Bank of Latin America

3 Address CAF Ave. Luis Roche, Torre CAF Altamira, Caracas – Venezuela


[email protected]

5 Objectives

Contribute to mitigating climate change issues and promote clean energy use and alternatives in Latin America as a contribution to sustainable development in the region Agreed Objectives

• Promote and actively participate in market development emissions reduction and capture of Greenhouse Gas (GHG)

• Support the identification, development and financing of GHG projects, clean energy and energy efficiency alternatives and in Latin America

• Strengthen institutions and mechanisms to encourage and consolidate the various GHG markets, clean energy and alternative

6 Region/Country Focus Latin America

7 Sector Focus

Clean and alternative energies, interconnections, Methane capture and use, energy efficiency schemes, methane leak reduction, capture or carbon sequestration, efficient transport systems, replacing fossil fuels.

8 Technology Focus Clean and alternative technologies with emphasis on wind power, geothermal, small scale hydro, biomass, biogas, among others.


December 2011


Loan PLAC+e diversifies purchase options and encourages the trade of GHG reduction to buyers by broadening the opportunities for the sale of carbon credits (CERs or VERs) to different options and markets:

• Spain/CAF Fund through Ibero-American Carbon Initiative (IIC, for its acronym in Spanish).

• CAF-Netherlands-CDM Facility. • Voluntary markets and other emerging

markets. • Private buyers of the carbon market.

10 Management/Governance No information available



12


• Credit lines for projects that reduce GHG. • Credit lines for clean, alternative and

efficient energy projects. • Different funds for the development of

innovative projects. • Prepayments of certified emission

reductions.




15 When and How to Apply No information available




Currently handling around 3 million tons of CO2e under negotiation






December 2011


http://www.caf.com/view/index.asp?ms=12&pageMs=55765 http://www.caf.com/view/index.asp?ms=19&pageMs=79385


Sectors of interest and main projects of GHG reduction developed by the PLAC+e:

• Clean and alternative energies. Eolic energy • Clean and Alternative energies. Geothermal

energy • Small-scale hydroelectric power plant • Biogas (methane) capture and use from

biomass • Methane capture, use and leakage • Carbon capture and sequestration.

Reforestation of degraded areas • Energy efficiency • More efficient transportation systems. Bus

rapid transit


December 2011

PARTNERSHIP FOR MARKET READINESS (PMR)


1 Name of Financing Source Partnership for Market Readiness (PMR)


Administered by The World Bank and financial support from Australia (A$10 million), the European Commission (€5 million) and the United States (US$5 million) in Cancún, building on an earlier pledge of US$5 million from Norway. In addition, Germany, Japan and the UK As of August 1, 2011, the PMR Contributing Participants include Australia, the European Commission, Germany, Japan, the Netherlands, Norway, Spain, Switzerland, the United Kingdom, and the United States.

3 Address The World Bank PMR Secretariat 1818 H Street NW, Washington, DC 20036, USA


Joëlle Chassard Carbon Finance Unit, Washington DC

5 Objectives

The PMR aims to: (i) establish opportunities to design and develop market instruments (such as a forum for technical exchanges and the sharing of lessons learned); (ii) build the necessary in-country capacity to implement these instruments; and (iii) provide opportunities to pilot new instruments.


Chile, China, Columbia, Costa Rica, Indonesia, Mexico, Thailand, and Turkey) have each received an initial grant of US$350,000 As of August 1, 2011, the PMR Implementing Country Participants include Chile, Colombia, Costa Rica, Indonesia, Mexico, Morocco, Thailand, Turkey, and Ukraine.

7 Sector Focus Green house gas mitigation

8 Technology Focus


The PMR is a grant-based, capacity building trust fund

10 Management/Governance The Partnership Assembly, which consists of Contributing Participants and Implementing Country


December 2011

Participants, is the decision-making body. The World Bank serves as secretariat of the PMR.


12


Grants to evaluate and plan how the countries will design, pilot, and eventually implement market-based instruments for greenhouse gas mitigation.

13 Eligibility Criteria It will be country-led and build on individual countries‘ mitigation priorities and their development of market instruments


15 When and How to Apply Expression of Interest is submitted by each country



Proposed in December 2010, The Partnership is aiming for a total capitalization of US$100 million




http://wbcarbonfinance.org/Router.cfm?Page=PMR&ItemID=61218&FID=61218


The Partnership brings together developed and developing countries, as well as other key experts and stakeholders, in order to provide a platform for technical discussions on market instruments, foster South-South exchange, facilitate collective innovation for pilot efforts and harness financial flows for implementation and scale up. For many countries, the first step toward implementing a market-based instrument is to build market readiness capacity, such as measuring, reporting and verification systems or the creation of a regulatory framework. As such, market preparation is also a crucial part of the work of the PMR.


December 2011

PLANET BANKING PROGRAM


1 Name of Financing Source Planet Banking Program

2 Sponsoring Organization Inter-American Development Bank (IDB)

3 Address Inter-American Development Bank 1300 New York Avenue N.W. Washington D.C. 20577


[email protected]

5 Objectives

The program aims to provide technical and financial support from IDB to Latin American banks in implementing innovative financial products that promote climate change investments in the region.

6 Region/Country Focus Latin America

7 Sector Focus

8 Technology Focus




12


Technical and financial support to banks





December 2011






http://idbdocs.iadb.org/wsdocs/getdocument.aspx?docnum=35443923 www.iadb.org/beyondbanking


planetBanking is a component of beyondBanking, a program that promotes combining financial profitability with social returns by advancing the principles of environmental, social and corporate governance sustainability among Latin American and Caribbean Financial Intermediaries (FIs).


December 2011

PRIVATE FINANCING ADVISORY NETWORK (PFAN)


1 Name of Financing Source Private Financing Advisory Network (PFAN)

2 Sponsoring Organization Climate Technology Initiative (CTI)

3 Address International Center for Environmental Technology Transfer (ICETT)


Mr. Taiki Kuroda CTI PFAN Secretariat [email protected]

5 Objectives

To accelerate technology transfer and diffusion under the UNFCCC, reduce greenhouse gas emissions, promote low-carbon, sustainable economic development, and help facilitate the transition to a low-carbon economy by increasing financing opportunities for promising clean energy projects.

6 Region/Country Focus None

7 Sector Focus

Range of sectors, including but not limited to biomass, wind, waste-to-energy, geothermal, hydropower, energy efficiency, tidal, solar, clean transport, and distributed generation.

8 Technology Focus Technology neutral


Risk management , Technical assistance


CTI PFAN is a multilateral, public-private partnership initiated by CTI in cooperation with the UN Framework Convention on Climate Change’s Expert Group on Technology Transfer. CTI PFAN is managed in Asia by USAID’s ECO-Asia Clean Development and Climate Program. PFAN develops partnerships in each new country in order to build and expand a local in-country presence for PFAN and the services it offers.


Proposals may be submitted as executive summaries and / or full business plans dependent


December 2011

on the project development status.

12


Mitigation, Energy , Energy Efficiency , Fugitive Methane, Low-Carbon, Renewable Energy, Transport, Urban.

PFAN screens business plans, selects the most economically viable and environmentally beneficial projects, and provides extensive coaching and guidance before projects are presented to investors at Clean Energy Financing Forums hosted across Asia, Latin America and Africa.

13 Eligibility Criteria Technically and economically viable clean energy businesses that are sustainable and environmentally beneficial


A project first undergoes a rigorous review process based on an initial application that includes a detailed project description, underlying project economics and other readily available relevant information.

All businesses must be able to demonstrate that the investments they seek will result in greenhouse gas (GHG) reductions and social and environmental benefits.

15 When and How to Apply Outside the Clean Energy Financing Forums, free-form project proposals may be submitted to CTI PFAN at any time.


Advisory and guidance services, no funding offered.


US$140 million (2010 total investment)


CTI PFAN generally targets projects that require total investment in the range of US$ 1-50 million, though projects outside that range may be considered.


The exact structure of the review stages is tailored to the individual project, but the second stage concentrates on the project economics and underlying viability, while the third stage focuses more on technical and engineering aspects. The final two stages are aimed at problem solving, fine-


December 2011

tuning of the cash flows and fulfilling the necessary conditions required by the potential investor for converting offers into committed deals.


CTI PFAN homepage [CTI PFAN General Introduction and Update .pdf [CTI PFAN Introductory Presentation .pdf] [CTI PFAN FAQs .pdf] [CTI PFAN Development Pipeline -Project Summary-.pdf] [CTI PFAN Development Pipeline -Project Summary- .xls] CTI PFAN Project Proposals - Check List and suggested Guidelines for project developers


No upfront fees. A success fee is negotiable for an investment facilitated by PFAN, effectively payable out of the financing or investment secured.


December 2011

SUSTAINABLE TRANSPORT INITIATIVE


1 Name of Financing Source Sustainable Transport Initiative


3 Address Asian Development Bank 6 ADB Avenue, Mandaluyong City 1550 Metro Manila, Philippines


[email protected] www.adb.org

5 Objectives

The Sustainable Transport Initiative (STI) of the Asian Development Bank (ADB) supports the development of accessible, safe, environment-friendly, and affordable transport systems in developing Asia and the Pacific.

6 Region/Country Focus Developing Asia and the Pacific

7 Sector Focus Energy Efficient, Low GHG Transport systems

8 Technology Focus Transport systems that are accessible, safe, affordable, and environment-friendly


No information available online

10 Management/Governance No information available online



12



13 Eligibility Criteria No information available online




December 2011

15 When and How to Apply No information available online




Invest US$1.5 billion






http://www.adb.org/documents/policies/sustainable-transport-initiative/brochure-Sustainable-Transport-Initiative.pdf


STI implementation will be undertaken in three phases (Table 3). Phase 1 will cover 2010–2011, and its focus takes into account the need to initially mainstream sustainable transport and build ADB’s capacity for undertaking sustainable transport operations. It also allows for phases 2 and 3 to incorporate the lessons from implementation of phase 1, and to introduce further types of support for sustainable transport after conducting initial research and pilot testing. The STI operational plan will be updated before the start of phases 2 and 3.


December 2011

UNDP GREEN COMMODITIES FACILITY


1 Name of Financing Source UNDP Green Commodities Facility

2 Sponsoring Organization United Nations Development Programme

3 Address UNDP 304 East 45th Street New York, NY 10107 USA


Andrew Bovarnick, GCF Director UNDP [email protected]

5 Objectives

To connect global markets with national governments and farmers to strengthen national capacity for scaling up sustainable agricultural and marine commodities production around the world.

6 Region/Country Focus Global markets

7 Sector Focus Mitigation, Agriculture , Fisheries , Forestry , Industry , Infrastructures , Natural Resource Management



Technical Assistance


At the country level, the Green Commodities Facility programmatically and comprehensively coordinates and facilitates the execution of national strategies. Multi stakeholder project teams will implement programmes to improve the structural conditions under which producers can meet global standards, certification systems and sustainability initiatives (e.g., the Millennium Development Goals).


N/A

12 Eligible Projects/Programs (whether only for soft items such as capacity building or policy advice, etc, or also

The Facility offers strategic advisory/policy and project management services for governments, companies, donors and UNDP Country Offices (COs) on greening supply chains. This entails activities such as programme


December 2011

for hard items, such as for plant and equipment) or Organizations

and project design, development of specific TORs, work planning, consultant identification and quality control of related consultancies, reviews of products and deliverables, support technical oversight of project management units, as well as international coordination for activities supporting supply chain interventions in more than one country.


The GCF currently focuses on bulk traded goods of cocoa, coffee, cotton, and tuna, but will expand into a wider array of agricultural, forestry and fisheries products including rice, soy, palm oil, lobster, shrimp, beef, and timber.


There is a specific focus on climate change linkages—in terms of both reducing emissions and increasing ecosystem resilience—such as reducing deforestation, maintaining ecosystems and conserving natural habitats.



Project Specific


No information


Project specific


Project specific


http://www.greencommodities.org/ http://www.greencommodities.org/attachments/106_GCF_brochure_Web.pdf http://www.climatefinanceoptions.org/cfo/node/168


The Facility has prioritized support for commodities with the largest environmental impact and is developing multi-country programmes per commodity.


December 2011

UNEP GREEN ECONOMY INITIATIVE (GEI)


1 Name of Financing Source UNEP Green Economy Initiative (GEI)

2 Sponsoring Organization United Nations Environment Programme (UNEP)

3 Address

United Nations Environment Programme United Nations Avenue, Gigiri PO Box 30552, 00100 Nairobi, Kenya


Steven Stone Chief, Economics and Trade Branch Division of Technology, Industry and Economics United Nations Environment Programme

5 Objectives

Working in partnership with United Nations agencies, other international institutions and a network of leading policy research institutions and think tanks, UNEP seeks to lend support to countries’ national initiatives to achieve a green economic transformation.


Since 2010, UNEP’s Green Economy Initiative (GEI) has been providing advisory services to more than 20 governments around the world, with an active engagement in 15 countries. Barbados, China, Egypt, Ghana, Jordan, Indonesia, Kenya, Korea, Nepal, South Africa, Rwanda

7 Sector Focus Low Carbon, resource efficient

8 Technology Focus No technology focus


No monetary funding provided

10 Management/Governance No information


Not applicable

12


Advisory services include providing platforms for national dialogue and consultations; analytical and research support through macro-economic and sectoral assessments of green economy opportunities and options; capacity enhancing activities; and sharing of international experiences and best practices.


December 2011

13 Eligibility Criteria Not applicable


Not applicable

15 When and How to Apply Not applicable


Not applicable


Not applicable


Not applicable


Not applicable

20 Sources for Further Information http://www.unep.org/greeneconomy/


GEI works with its range of partners to:

• develop GEI research products; • harmonise green economy policy messages; • provide and coordinate regional and country

level advisory services; and • identify financial and human resources to

undertake green economy activities


December 2011

UNEP RENEWABLE ENERGY ENTERPRISE DEVELOPMENT (REED)


1 Name of Financing Source UNEP Renewable Energy Enterprise Development (REED)

2 Sponsoring Organization UNEP

3 Address 39-43 quai André Citroën, 75739 Paris, France


Eric Usher UNEP http://www.uneptie.org/energy [email protected]

5 Objectives

Enterprise development and seed financing for clean energy entrepreneurs in developing countries. Prepare young enterprises for later growth capital from more commercial sources.


Yunnan province in China (CREED), northeastern Brazil (B-REED), and the five African states of Ghana, Mali, Senegal, Tanzania, and Gambia (A-REED)

7 Sector Focus Clean energy products and services

8 Technology Focus Tailored to the specific region’s needs


Equity , Loan


All REED Programmes are partnerships between a varied group of stakeholders, yet each relies on the funding of UNEP and the assistance of energy investment NGO E +Co. Implementing partners in Brazil: Brasil Sustentável (BRASUS), Instituto Eco-Engenho (IEE) Implementing partners in China: The Nature Conservancy (TNC) Implementing partners in Africa: Tanzania Traditional Energy Development and Environment (TaTEDO), ENDA TM, The Kumasi Institute of Technology and Environment (KITE), The Mali-Folkecenter (MFC).


December 2011


Project is developed during a ‘hand holding’ phase with support from REED partner.

12


Mitigation, Energy , Energy Efficiency , Infrastructures , Low-Carbon , Renewable Energy REED assistance can take many forms. Initial assistance may be business plan development and other “hand-holding” types of practices. Then, seed capital in the form of low-interest loans may be introduced if the project looks promising. Finally, REED may take an equity stake in a final phase of assistance.

13 Eligibility Criteria Each project is assessed individually by UNEP, E+Co and in-country partners for eligibility

14 Proposal Evaluation Criteria Feasibility of the business ideas

15 When and How to Apply The multi-stage process begins when an entrepreneur approaches a REED partner with a business idea.


The REED Programmes provide seed capital to help kick-start renewable energy businesses. Once an enterprise is operating and ready for expansion into fully commercial operation, second-stage financing from an outside investor can be sourced with REED support.


Total Up to USD 250,000, depending on the project


The first support to an entrepreneur might be a modest loan (e.g. $15,000) to support preparation of a business plan. Total B-REED support to a company typically ranges from $50,000 to $100,000, although it can reach $250,000.


Case to case basis


Africa REED

Brazil REED

China REED

21 Additional Comments Once an enterprise is operating and ready for expansion into fully commercial operation, second-stage financing from an outside investor can be


December 2011

sourced with REED support.


December 2011

UN-REDD PROGRAM (REDUCED EMISSIONS FROM DEFORESTATION AND FOREST DEGRADATION)


1 Name of Financing Source UN-REDD Program (Reduced Emissions from Deforestation and Forest Degradation)

2 Sponsoring Organization Assistance for forestry projects through the UN-REDD Programme is made by possible by grants through the Government of Norway.

3 Address

UDP Headquarters United Nations Development Programme One United Nations Plaza New York, NY 10017 USA


Mr. Tim Clairs Environment and Energy Group Bureau for Development Policy [email protected]

5 Objectives

• Improved guidance on Measurement, Reporting and Verification (MRV) approaches;

• Increased engagement of stakeholders in the REDD agenda;

• Improved analytical and technical framework of social and environmental benefits maximising the contribution of REDD to sustainable development;

• Increased confidence in REDD amongst decision-makers on the feasibility of methodologies and the implementation of REDD, through coordination, knowledge management and sharing within agencies and with partners.


The Programme currently has 35 partner countries spanning Africa, Asia-Pacific and Latin America, of which 14 are receiving support to National Programme activities. These 14 countries are: Bolivia, Cambodia, Democratic Republic of the Congo (DRC), Ecuador, Indonesia, Nigeria, Panama, Papua New Guinea, Paraguay,


December 2011

the Philippines, Solomon Islands, Tanzania, Viet Nam and Zambia. UN-REDD Programme countries not receiving direct support to national programmes but engage with the programme are Argentina, Bangladesh, Bhutan, Central African Republic, Colombia, Costa Rica, Ethiopia, Gabon, Guatemala, Guyana, Honduras, Ivory Coast, Kenya, Mexico, Mongolia, Nepal, Pakistan, Peru, Republic of Congo, Sri Lanka and Sudan.

7 Sector Focus Avoided deforestation, forest conservation, sustainable forest management



Grant , Technical assistance


The UN-REDD Policy Board provides overall leadership and sets the strategic direction of UN-REDD.

The UN-REDD Technical Secretariat serves the Policy Board, using the capacities of the participating UN organizations, research institutions and recognized experts. It will include independent third party verification/evaluation of emission reductions, an on-line review and comment process, and an ombudsman system for complaints.


12


Capacity Building , Mitigation, Forestry , Natural Resource Management , Sustainable Land Management

The UN-REDD Programme has both a country-level and global focus. Global focus on technical and scientific support and knowledge management. Country level support by providing project grants.


The set of nine countries chosen to pilot the UN-REDD Phase I were selected based on the following set of common criteria:

• Request for quick start action; • Existing collaboration with UN partners in


December 2011

related areas for rapid progress; • Emission reduction potential; • Degree of REDD readiness potential; • Regional, biome and socio-economic

representation; • Coordination with international REDD

initiatives; • Leadership potential in sub-regional

experience sharing; • Ability to contribute experiences to

UNFCCC negotiations and development of REDD mechanisms.


The country-level support is aimed at a select group of pilot countries who are each developing unique REDD programmes in concert with UNDP, UNEP, and FAO support. Priority is given to developing sustainable national multi-sectoral approaches with broad stakeholder engagement that promote equitable outcomes and to ensuring that countries use reliable methodologies to assess emission reductions. In some countries, key elements of delivering emission reductions – such as REDD payment structuring and distribution options - will also be tested.

15 When and How to Apply No information


No information


Total - $97 million


No information


No information


http://www.un-redd.org/

http://www.undp.org/mdtf/un-redd/overview.shtml



December 2011


December 2011

WORLD BANK - ASIA SUSTAINABLE AND ALTERNATIVE ENERGY PROGRAM (ASTAE)


1 Name of Financing Source World Bank - Asia Sustainable and Alternative Energy Program (ASTAE)


The World Bank The ASTAE work is currently supported by the World Bank, the Government of the Netherlands, and the Swedish International Development Agency (SIDA).

3 Address The World Bank 1818 H Street, NW Washington, DC 20433 USA


[email protected]

5 Objectives

Its mandate is to scale up the use of sustainable energy options in Asia to reduce energy poverty and protect the environment. Achieving this objective rests on promoting ASTAE’s three pillars for sustainable development: renewable energy, energy efficiency, and access to energy


Alternate and sustainable energy projects are financed by the World Bank in the following East Asia and Pacific countries: Cambodia, China, Fiji, Indonesia, Lao PDR, Mongolia, Papua New Guinea, Philippines, Solomon Islands, Thailand, Timor-Leste and Vietnam.

7 Sector Focus Renewable energy, Energy efficiency, and Access

8 Technology Focus No information available on website


10 Management/Governance Follows World Bank procedures


No information available on website


Continued support to develop projects on grid-connected and off-grid renewable energy applications, as well as market based energy efficiency projects


December 2011


13 Eligibility Criteria No information available on website



15 When and How to Apply No information available on website




In its latest business plan period (2007-2009) ASTAE funded 42 activities totalling US$2 billion





20 Sources for Further Information http://go.worldbank.org/U7UTJB54K0


The Asia Sustainable and Alternative Energy Program (ASTAE) grew out of the Financing Energy Services for Small-Scale Energy Users (FINESSE) project initiated by the World Bank’s Energy Sector Management Assistance Program (ESMAP) and bilateral donors in 1989.


December 2011

WORLD BANK - ENERGY SECTOR MANAGEMENT ASSISTANCE PROGRAM (ESMAP)


1 Name of Financing Source World Bank - Energy Sector Management Assistance Program (ESMAP)

2 Sponsoring Organization Administered by the World Bank and co-sponsored by 13 official bilateral donors

3 Address

Energy Sector Management Assistance Program The World Bank 1818 H Street, NW Washington DC 20433 USA


Nicholas Keyes [email protected] [email protected]

5 Objectives

ESMAP assists low and middle-income countries to increase knowledge and institutional capacity in order to achieve environmentally sustainable energy solutions for poverty reduction and economic growth

6 Region/Country Focus Low and middle-income countries

7 Sector Focus Energy security, Poverty reduction, and Climate change

8 Technology Focus Environmentally sustainable energy solutions


Trust Fund


The ESMAP Unit is responsible for the day-to-day management of ESMAP, following the strategy laid out in its business plan, as approved by the CG, and annual work program managed by the Sustainable Energy Department (SEG) of The World Bank Group. The governance structure of ESMAP comprises: Consultative Group – ESMAP is governed by a Consultative Group (CG) made up of representatives from contributing donors—Australia, Austria, Denmark, Finland, Germany,


December 2011

Iceland, Lithuania, Netherlands, Norway, Sweden, United Kingdom, and The World Bank—and chaired by The World Bank Vice President, Sustainable Development Network. The CG meets annually to review the strategic directions of ESMAP, its achievements, and its use of resources and funding requirements. The CG is common to all energy trust-funded programs (ETFPs) managed by the World Bank. Technical Advisory Group – A Technical Advisory Group (TAG) of international experts selected by the CG provides informed, independent opinions to the CG about the purpose, strategic direction, and priorities of ESMAP. The TAG also provides advice and suggestions to the CG on current and emerging global issues in the energy sector, likely to impact ESMAP’s clients. Energy and Mining Sector Board – This World Bank board comprises Regional Energy Sector Managers and the ESMAP Program Manager. It ensures alignment of ESMAP’S strategy with the Bank’s approach and priorities in the energy sector. ESMAP Unit - The ESMAP Unit is responsible for the day-to-day management of ESMAP, following the strategy laid out in its business plan as approved by the CG and annual work program managed by the Sustainable Energy Department (SEG) of The World Bank Group


12


esMaP focuses “upstream” with its three core functions—think tank, knowledge clearinghouse, and operational leveraging.

13 Eligibility Criteria Varies as per its different programme lines


Varies as per its different programme lines

15 When and How to Apply Varies as per its different programme lines


Varies as per its different programme lines


December 2011





As per ESMAP M&E System

20 Sources for Further Information http://www.esmap.org/esmap/


ESMAP has following 4 program lines: Energy Assessments & Strategy Programs

(EASP)

Energy Efficient Cities Initiative (EECI)

Renewable Energy Market Transformation Initiative (REMTI)

Pro-Poor Energy Access Technical Assistance Programs (PEA-TAP)


December 2011

WORLD BANK GREEN BONDS


1 Name of Financing Source World Bank Green Bonds


3 Address

The World Bank Treasury

INVESTOR RELATIONS,

Capital Markets Department,

1818 H Street NW, Washington, DC 20036, USA


[email protected]

Web: http://treasury.worldbank.org

5 Objectives

In 2008, the World Bank launched the "Strategic Framework for Development and Climate Change" to help stimulate and coordinate public and private sector activity to combat climate change. The World Bank Green Bonds is an example of the kind of innovation the World Bank is trying to encourage within this framework.


7 Sector Focus Climate change mitigation, adaptation

8 Technology Focus


Bonds


The issuer:

The World Bank (International Bank for Reconstruction and Development, IBRD), rated Aaa/AAA (Moody’s/S&P), is an international organization created in 1944. It operates as a global development cooperative owned by 187 nations. It provides its members with financing, expertise and coordination services so they can achieve equitable and sustainable economic growth in their national economies and find effective solutions to pressing regional and global economic and environmental


December 2011

problems.


12


Examples of eligible mitigation projects are the following:

• Solar and wind installations;

• Funding for new technologies that permit significant

reductions in greenhouse gas (GHG) emissions;

• Rehabilitation of power plants and transmission facilities to reduce GHG emissions;

• Greater effi ciency in transportation, including fuel switching and mass transport;

• Waste management (methane emissions) and construction of energy-efficient buildings;

• Carbon reduction through reforestation and avoided

deforestation

Examples of eligible adaptation projects are the following:

• Protection against flooding (including reforestation and

watershed management);

• Food security improvement and implementing stress-resilient agricultural systems (which slow down deforestation);

• Sustainable forest management and avoided deforestation.

13 Eligibility Criteria Eligible projects are selected by World Bank environment specialists and meet specific criteria for low-carbon development.



December 2011



The borrowing terms are similar to those of other World Bank instruments: e.g. repayment is not linked to the projects‘ credit or performance, which significantly reduces the risk assumed by the bondholders.


Total Issuances to Date

Since the inaugural issue in 2008, the World Bank has issued over USD 2 billion in Green Bonds through 43 transactions and 16 currencies


The bonds have varying coupon rates (from under one percent to as high as 10 percent), maturities from three to ten years, are traded in multiple currencies and are AAA-rated



http://treasury.worldbank.org/cmd/htm/WorldBankGreenBonds.html

Green Bonds Fact Sheet: http://treasury.worldbank.org/cmd/pdf/WorldBank_GreenBondFactsheet.pdf

Links to information on the World Bank web site:

http://treasury.worldbank.org/greenbonds

http://www.worldbank.org/climatechange


The World Bank has been issuing bonds in the international capital markets for over 60 years to fund its activities. World Bank bonds are issued as liquid benchmark bonds, plain vanilla, local currency bonds, and as structured notes.


December 2011

WORLD BANK GROUP CATASTROPHIC RISK MANAGEMENT


1 Name of Financing Source World Bank Group Catastrophic Risk Management




Olivier Mahul World Bank Group Catastrophe Risk Insurance Working Group [email protected]

5 Objectives

To offer a line of catastrophe risk financing for direct budget support that provides varying levels of protection depending on the type, frequency, and severity of the event of a catastrophe.

6 Region/Country Focus IBRD/IDA country members

7 Sector Focus Adaptation , Capacity Building, Disaster Risk Reduction



World Bank Group makes available a number of risk management services to developing country clients:

• Weather hedges: Financial contracts based on an underlying weather index that transfer the risk to the financial markets.

• Contingent financing: The Catastrophe Deferred Drawdown Option or Cat DDO. Countries must have a disaster risk management framework in place.

• Catastrophe bonds: Transfer the risk of a natural disaster to investors by allowing the issuer to not repay the bond principal if a major natural disaster occurs. IBRD has developed the MultiCat Program - a bond issuance platform - that transfers diversified


December 2011

risk to private investors.


The working group is chaired by the Vice President of the Financial and Private Sector Development (FPD) Network and its' secretariat is performed by FPD-Global Capital Markets Development Department's Non-Bank Financial Institutions Group.

The working group includes representatives of the following WBG units: FPD; Sustainable Development Network; Treasury; IFC; Operations Policy and Country Services, Legal; Concessional Finance and Global Partnerships; Poverty Reduction and Economic Management; Africa; Europe and Central Asia; East Asia and Pacific; South Asia; Latin America and Caribbean; Middle East and North Africa; and the Multilateral Investment Guarantee Agency.


N/A

12


The schemes that help developing countries better prepare for the eventuality of climate-related events, such as managing the disaster risk of a certain country, weather risk management solutions, and helping government insure against natural disaster risk.

13 Eligibility Criteria IBRD/IDA country members


15 When and How to Apply N/A


Weather Hedges: Payments are triggered by adverse weather events according to pre-specified conditions (e.g. levels of rainfall, seasonal temperatures, etc.). IBRD offers weather derivatives intermediation services to both middle- and low-income countries. Contingent financing: immediate access to financing following a natural disaster and the declaration of a state of emergency.


N/A


December 2011


N/A


N/A


http://treasury.worldbank.org/bdm/htm/risk_financing.html http://www.worldbank.org/catriskinsurance http://www.climatefinanceoptions.org/cfo/node/149



December 2011

WORLD BANK - INTERNATIONAL DEVELOPMENT ASSOCIATION (IDA)


1 Name of Financing Source World Bank - International Development Association (IDA)




World Bank Group International Development Association [email protected]

5 Objectives

IDA aims to reduce poverty by providing interest-free credits and grants for programs that boost economic growth, reduce inequalities and improve people’s living conditions.

6 Region/Country Focus 80 Poorest countries

7 Sector Focus

Primary education, basic health services, clean water and sanitation, environmental safeguards, business climate improvements, infrastructure and institutional reforms.

Infrastructure 42%, Public Admin and Law 23%, Social sector 20%, Agriculture 8%, Industry 6%, Finance 1%.



Grant , Loan , Technical assistance


IDA complements the World Bank’s other lending arm–the International Bank for Reconstruction and Development (IBRD)–which serves middle-income countries with capital investment and advisory services. IBRD and IDA share the same staff and headquarters.


Same as eligibility criteria

12 Eligible Projects/Programs IDA emphasizes broad-based growth, including:


December 2011


• Sound economic policies, rural development, private business and sustainable environmental practices;

• Investment in people, in education and health, especially in the struggle against HIV/AIDS, malaria and TB;

• Expansion of borrower capacity to provide basic services and ensure accountability for public resources;

• Recovery from civil strife, armed conflict and natural disaster;

• Promotion of trade and regional integration.


Eligibility for IDA support depends first and foremost on a country’s income level, as measured by GNI per capita (the threshold for FY 2012: US$1,175) IDA also supports some countries, including several small island economies, which are above the operational cutoff but lack the creditworthiness needed to borrow from IBRD. Some countries, such as India, Indonesia and Pakistan, are IDA-eligible based on per capita income levels, but are also creditworthy for some IBRD borrowing. They are referred to as “blend” countries.

14 Proposal Evaluation Criteria Same as above

15 When and How to Apply Specific details not provided.


IDA credits have maturities of 20, 35 or 40 years with a 10-year grace period before repayments of principal begins. IDA funds are allocated to the borrowing countries in relation to their income levels and record of success in managing their economies and their ongoing IDA projects. Nearly all IDA credits have no interest charge, but credits do carry a small service charge, currently 0.75% on funds paid out. IDA also provides grants, which are allocated that are at risk of debt distress.


For period between July FY 2011-FY2014, the IDA replenishment totaled US$ 49.3 billion. Since its inception, IDA credits and grants have totaled US$238 billion, averaging US$15 billion a year in recent years and directing the largest share, about 50 percent, to Africa.


December 2011


The main factor that determines the allocation of IDA resources among eligible countries is each country's performance in implementing policies that promote economic growth and poverty reduction. This is assessed by the Country Policy and Institutional Assessment (CPIA), which for the purposes of resource allocation is referred to as the IDA Resource Allocation Index (IRAI). The IRAI and portfolio performance together constitute the IDA Country Performance Rating (CPR). In addition to the CPR, population and per capita income also determine IDA allocations. Beginning 2005, the numerical IRAI as well as the CPR are disclosed. In the case of countries that are eligible for both IDA and IBRD funds ("Blend countries"), IDA allocations must also take into account those countries' creditworthiness for and access to other sources of funds. Individual country performance-based allocations serve as an anchor for the formulation of Country Assistance Strategy (CAS) lending programs.


Country to country basis


http://www.climatefinanceoptions.org/cfo/node/148 IDA hompage IDA project profiles IDA - UNFCCC page



December 2011

WORLD BANK/IREDA - INDIAN RENEWABLE ENERGY DEVELOPMENT AGENCY LOAN PROGRAM


1 Name of Financing Source IREDA - Indian Renewable Energy Development Agency

2 Sponsoring Organization Ministry of New and Renewable Energy Indian Government

3 Address India Habitat Centre Complex, Core-4A, East Court, 1st Floor, Lodi Road, New Delhi – 110 003.


Debashish Majumdar Chairman and Managing Director [email protected] www.ireda.in

5 Objectives

To give financial support to specific projects and schemes for generating electricity and / or energy through new and renewable sources and conserving energy through energy efficiency.

To maintain its position as a leading organization to provide efficient and effective financing in renewable energy and energy efficiency / conservation projects.

To increase IREDA's share in the renewable energy sector by way of innovative financing.

Improvement in the efficiency of services provided to customers through continual improvement of systems, processes and resources.

To strive to be competitive institution through customer satisfaction

6 Region/Country Focus India

7 Sector Focus

Hydro Energy Wind Energy Bio Energy Biomass Power Cogeneration Waste to Energy Bio Fuel (Ethanol / Bio Diesel)


December 2011

Solar Energy Solar Photovoltaic Market Development Programme Solar Thermal Programme Solar Water Pumping Programme Developmental Activities / New Initiatives Infrastructure Loan Under BDA Scheme RE / Energy Efficiency Umbrella Financing Scheme Market Development Assistance Establishment of Energy center New and Emerging Technologies Fuel Cells Battery Powered Vehicles Energy Efficiency and Conservation

8 Technology Focus Hydro, wind, Bio, Solar Energy, New and emerging technologies, energy efficiency and conservation including DSM

9 Type of Funding Support (e.g., loans, grants, etc.) Loan


11 Proposal/Application Requirements No information is available online

12


No information is available online

13 Eligibility Criteria No information is available online

14 Proposal Evaluation Criteria No information is available online


The eligible applicant will submit an application in the prescribed format of IREDA along with business plan and other enclosures. Applications for a line of credit will be appraised based upon the criteria prescribed by IREDA. IREDA will review application and sanction the line of credit based on the qualification criteria: or reject the application, if not found suitable.


December 2011




Financing norms and schemes with grade wise interest rate matrix for various sectors is available at http://www.ireda.gov.in/homepage1.asp?parent_category=1&category=49

19 Monitoring & Evaluation Procedures No information is available online

20 Sources for Further Information http://www.ireda.gov.in



December 2011

WORLD BANK - MULTILATERAL INVESTMENT GUARANTEE AGENCY


1 Name of Financing Source World Bank - Multilateral Investment Guarantee Agency

2 Sponsoring Organization World Bank Group

3 Address

Multilateral Investment Guarantee Agency

1818 H Street, NW

WashingtonDC 20433 USA


Deniz Baharoglu

Environment, Social, and Integrity t. 1. 202.458.9598 [email protected]

5 Objectives To promote foreign direct investment (FDI) into developing countries to help support economic growth, reduce poverty, and improve people's lives.

6 Region/Country Focus MIGA has total of 175 member countries(150 developing countries and 25 are industralized countries)

7 Sector Focus

MIGA guarantees against losses, and it provides environmental and social expertise in each of these sectors.

The sectors it is active in are: Finance, Infrastructure, Agribusiness, manufacturing and services, and Oil, gas and Mining.



Guarantee


11 Proposal/Application Investors are encouraged to contact MIGA to discuss the type, amount, and duration of coverage


December 2011

Requirements that fits their needs. The business inquiries line is available by phone at +1.202.458.2538 or e-mail at [email protected].

12


MIGA insures cross-border investments made by investors in a MIGA member country into a developing member country. In certain cases, the agency may also insure an investment made by a national of the host country, provided the funds originate from outside that country. Corporations and financial institutions are eligible for coverage if they are either incorporated in, and have their principal place of business in, a member country or if they are majority-owned by nationals of member countries. A state-owned company is eligible if it operates on a commercial basis. An investment made by a non-profit organization may be eligible if it is carried out on a commercial basis. MIGA insures new and existing investments. For an existing investment to be considered eligible, the project must meet certain criteria. For example, MIGA may insure existing investments where an eligible investor is seeking to insure a pool of existing and new investments, or where the investor demonstrates both the development benefits of, and a long-term commitment to, the existing project. Acquisitions, including the privatization of state-owned enterprises, may also be eligible. Investors seeking clarification on eligibility are encouraged to contact us. The types of foreign investments that can be covered include equity, shareholder loans, shareholder loan guaranties, and non-shareholder loans. All loans and loan guaranties, including those issued by shareholders of the project, must have a minimum maturity of more than one year provided that MIGA determines the project represents a long-term commitment by the investors. Other forms of investment, such as technical assistance and management contracts, asset securitizations, capital market bond issues, leasing, services, and franchising and licensing agreements, may also be eligible for coverage.


December 2011


In keeping with MIGA's objective of promoting economic growth and development, investment projects must be financially and economically viable and meet MIGA’s social and environmental performance standards.



MIGA’s underwriting process begins when a client submits a Preliminary Application. The application is free, confidential, short, and it can be done online. As soon as we receive the application, we will assign an underwriter to review it to determine whether the project meets our eligibility criteria. MIGA will then contact the client to discuss the project.

At this point the underwriter discusses preliminary pricing with the client, the potential size of the guarantee, and the MIGA covers that are most appropriate for the investment. We also work with the client to identify environmental and social impact assessments that must be undertaken.

Definitive Application and Client Documentation

The next step is for the client to submit a Definitive Application (the form will be provided by MIGA’s underwriting team). After receiving the completed Definitive Application, MIGA begins a thorough review of the project. To ensure a quick underwriting process, the project sponsors must submit supporting documentation, which we review to ensure that the project meets MIGA’s policies and guidelines. The supporting documentation we require to begin the formal underwriting process typically may include:


December 2011

• Feasibility study or a business plan supporting the economic viability and financial soundness of the project

• Financial forecast/ model

• All loan documentation, including shareholder and non-shareholder loans (drafts acceptable during underwriting) and all loan-related documents

• All loan guaranties (including back-stop guarantees from parent companies)

• Financial statements and incorporation documents/by-laws from the investor and the project enterprise in the host country

• Environmental permits/environmental impact assessment if applicable

• Land purchase/lease agreements

• All other applicable project licenses/ permits/ agreements/contracts

Underwriting Fees

Definitive Application Fee: $5,000 for cover of less than $25 million and $10,000 for larger amounts. The application fee is applied toward the initial premium or, if MIGA rejects the project for any reason, the fee is refunded.

Processing Fee: Additional fees may be required for complex projects. For example, fees may be required to cover the cost of site visits for environmental and social due diligence.

Syndication Fee: If applicable, a fee will be applied when MIGA arranges a project’s total insurance requirements through reinsurance.

Review, Disclosure, and Due Diligence by MIGA

Before we undertake extensive underwriting , MIGA’s management conducts a preliminary


December 2011

assessment of the project’s development impact, risk profile, and compliance with our legal and policy requirements. This early review helps give prompt feedback to clients on the project and the requirements for MIGA coverage. Once a project is authorized to proceed, our underwriting team completes its analysis of the project’s risks, its economic and financial viability, its environmental and social impact, and in general, its contribution to development.

During this period we will also seek the host country’s approval to issue the insurance. This should provide some comfort to clients because the country has supported MIGA’s participation in the project. Once our management approves a project, we submit the project to our Board of Directors, comprising government representatives from our member countries. In accordance with our disclosure policy, a brief summary of the project and related environmental and social impact documents must be publicly disclosed prior to presentation to the Board of Directors. With MIGA’s Board approval and host country approval, the guarantee contracts are ready to be signed.

The duration of the underwriting process depends on the complexity of the project. Complex projects requiring extensive environmental and social due diligence will take longer, but most projects can be underwritten in four to six months or less. Projects under the Small Investment Program can be processed in one to two months if all of the required documentation has been provided.


The approval process for the Small Investment Program should not take longer than 6-8 weeks if the information requested in the definitive application is fully completed and MIGA is


December 2011

supplied with all relevant project documentation.

Once the guarantee proposal has been approved, the investor will receive a contract of guarantee, and on receipt, will have a period of six weeks to sign the contract. If the investor decides not to go ahead within this period, MIGA will terminate the guarantee process.



Duration of guarantee Coverage is for up to 15 years (possibly 20 if justified by the nature of the project). MIGA cannot terminate the contract unless the investor defaults on its contractual obligations to MIGA, but the investor may reduce or cancel coverage without penalty on any contract anniversary date starting with the third anniversary. Coverage Investors may choose any combination of the five types of coverage offered by MIGA. MIGA may insure up to $220 million per project, and if necessary more can be arranged through syndication of insurance. Note that under the Small Investment Program, investors are offered a package covering currency inconvertibility and transfer restriction; expropriation; and war, terrorism, and civil disturbance.



http://www.miga.org



December 2011

A.2 – SPECIAL CLIMATE FUNDS


December 2011

ADB CLEAN ENERGY PRIVATE EQUITY INVESTMENT FUNDS


1 Name of Financing Source ADB Clean Energy Private Equity Investment Funds


3 Address

Private Sector Operations Department Capital Markets and Financial Sectors Division 6 ADB Avenue, Mandaluyong City 1550, Philippines


M Shin Kim [email protected]

5 Objectives

ADB issued the call for proposals (CFP) in mid 2007 to make both the private equity sector and the clean energy sector aware of ADB's commitment to increasing equity funding to clean energy investments, and to motivate these sectors to merge their expertise in order to evolve high-quality fund managers and catalyze increased investment in clean energy projects in ADB's developing member countries (DMCs).

6 Region/Country Focus Developing member Countries

7 Sector Focus Environmental Sustainability Private Sector Development Economic growth, Clean Energy Projects



Seed Capital in Private equity



Not Applicable

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Not Applicable


December 2011


The call for proposals (CFP) is fully in line with ADB's clean energy and environment program and its various initiatives, including Energy Efficiency Initiative (EEI) and Renewable Energy, Energy Efficiency, and Climate Change (REACH) and, more broadly with ADB's efforts to deal with climate change. Each fund adopts and complies with ADB's social and environmental management guideline.




The funds – MAP Clean Energy Fund, China Environment Fund III, GEF South Asia Clean Energy Fund, Asia Clean Energy Fund, and China Clean Energy Capital – will each receive up to $20 million in capital from ADB. The five funds were selected from 19 fund managers responding to ADB’s call for proposals issued in July 2007.


Using upto $100 million in seed capital, ADB is helping establish five private sector funds with a total target investment of up to $1.2 billion in clean energy projects in Asia.


$20 million for each fund



http://pid.adb.org/pid/PsView.htm?projNo=41922&seqNo=01&typeCd=4



December 2011

ADB CLIMATE CHANGE FUND (CCF)


1 Name of Financing Source ADB Climate Change Fund (CCF)

2 Sponsoring Organization The Asian Development Bank



Samuel Tumiwa, Principal Planning and Coordination Specialist [email protected]

5 Objectives

To facilitate greater investments in ADB’s developing member countries (DMCs) to effectively address the causes and consequences of climate change.

6 Region/Country Focus Developing member countries

7 Sector Focus

• biomass, biofuel, biogas • rural electrification and energy access • distributed energy production • waste-to-energy projects • demand-side management projects • energy-efficient district heating • energy-efficient buildings and end-use

facilities • energy-efficient transport • energy-efficient street lighting • clean energy power generation,

transmission, and distribution • manufacturing facilities of clean energy

system components, high efficiency appliances and industrial equipments

• energy service companies development • climate resilience of transport and urban

development systems


December 2011

• improving water management systems • disaster preparedness and response policies,

plans and measures • land-use planning policies and management • REDD capacity building and pilot activities • climate resiliency of biodiversity hotspots

or corridors



Co-financing , Grant , Technical assistance


The Fund Manager includes the eligible applications to the appropriate working group, the Clean Energy Working Group or Adaptation and Land Use Working Group.


12


Through CCF, ADB provides grants to projects through technical assistance, or investments in the private and public sectors. CCF initially dedicated $25 million towards mitigation activities—to lower carbon emissions, $10 million for adaptation activities—to build resilience, and $5 million for pilot activities in reducing emissions from deforestation and land degradation (REDD)


All proposals should: be consistent with the country partnership

strategy and results framework;

be consistent with the objectives of ADB’s Climate Change Program (CCP);

introduce innovative solutions;

adopt a participatory approach;

be catalytic;

have high demonstration value in the sector; and

have good potential for replication and scalability in the country and/or region

14 Proposal Evaluation Criteria Same as above


December 2011

15 When and How to Apply Applications are reviewed in 6 batches: 31 January, 31 March, 31 May, 31 July, 30 September, 30 November.


CCF is Grant Finance made available through ADB to its operational departments.


Total USD 40 million




http://www.adb.org/Climate-Change/cc-fund.asphttp://www.adb.org/Clean-Energy/ccf.asp http://www.climatefinanceoptions.org/cfo/node/55



December 2011

AFDB CONGO BASIN FOREST FUND


1 Name of Financing Source AfDB Congo Basin Forest Fund

2 Sponsoring Organization The Governments of Norway and Great Britain have each committed GBP 50 million for the initial financing.

3 Address

AfDB Temporary Relocation Agency African Development Bank Group 15 Avenue du Ghana P.O. Box 323-1002 Tunis-Belvedère, Tunisia


[email protected]

5 Objectives

The aim of the CBFF is to support innovative ideas that will develop local capacity of people and institutions within the Congo Basin to manage their own forest resources, assist communities in creating and fostering sustainable livelihoods, and reduce the overall rate of forest degradation and destruction.


COMIFAC member countries (Burundi, Cameroon, Congo, Gabon, Equatorial Guinea, Central African Republic, Democratic Republic of Congo, Rwanda, Sao Tome & Principe and Chad).

7 Sector Focus Mitigation, Forestry , Natural Resource Management , Populations & Human Settlements , Sustainable Land Management.

8 Technology Focus


Grant


The Fund is overseen by a Governing Council, while being managed and disbursed by a Secretariat based at the African Development Bank (AfDB).

The CBFF Secretariat, based at AfDB headquarters with assistance from regional offices in Yaoundé and Kinshasa, is responsible for the day to day management of the Fund and the initial assessment


December 2011

of proposals.

The CBFF Governing Council provides oversight and strategic guidance, while also providing a forum for broad donor and stakeholder participation.


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Its purpose is to provide grants to eligible entities for activities that: • slow and eventually reverse the rate of

deforestation in the Congo Basin; • provide support mechanisms which conserve the

forests; • maintain benefits to local communities; and • mobilize additional financial resources to

support required actions.


Innovative projects that address deforestation issues in COMIFAC member countries. Projects should have a maximum duration of 3 years (36 months); extensions or new proposals building on previously funded projects will also be considered. All funded projects must include strengthening capacity of institutions based in the Congo Basin and should demonstrate innovations in reducing poverty and greenhouse gas emissions.


Project proposals are assessed on their contribution to CBFF’s overall objectives. • Will the project slow the rate of deforestation and reduce poverty amongst forest communities • How does the proposal contribute to CBFF’s thematic areas • Does the project conform to the COMIFAC Convergence Plan and in particular • to COMIFAC strategic areas 2, 6 and 9 • How innovative and transformative is the proposal • Where a national REDD strategy exists, how does the project contribute to its elaboration and implementation • Is the problem clearly identified? Is the project


December 2011

likely to address it effectively • Is there a clear, logical link between project objective, expected results and related activities

15 When and How to Apply Concept notes prepared by clients (NGOs, governments, etc.) to be submitted to the CBFF Secretariat.


The CBFF funding process takes between 6 to 9 months.


Total amount of GBP 100 million


Projects must have a minimum budget of €80,000. There is no maximum budget, but budget estimates should be both realistic and justifiable.



http://www.cbf-fund.org/index.php http://www.climatefinanceoptions.org/cfo/node/173



December 2011

AFDB SUSTAINABLE ENERGY FUND FOR AFRICA (SEFA)


1 Name of Financing Source AfDB Sustainable Energy Fund for Africa (SEFA)

2 Sponsoring Organization African Development Bank (with financing from Danish Government)

3 Address

African Development Bank Temporary Relocation Agency (TRA) BP 323, 1002 Tunis Belvédère Tunis, TUNISIA


[email protected]

5 Objectives To enhance the commercial viability, as well as bankability, of smaller, private sector-driven projects.

6 Region/Country Focus Developing member countries

7 Sector Focus Clean energy, energy efficiency

8 Technology Focus Small and medium scale innovative technologies


Seed funding, Grant



12


Grant to cover up-front development costs, from pre-feasibility studies and PPP preparation to assistance in achieving financial close. A second financing window providing equity investments will be introduced in the second half of 2012 to address the lack of access to start-up and growth capital for SMEs, as well as the limited managerial and technical capability of small/medium-scale entrepreneurs

13 Eligibility Criteria No information available, as the fund process development is in process



December 2011




The budget for the fund is set at a DKK 300 million (equivalent to USD 57 million).


Grants of up to USD 1 million



http://www.afdb.org/en/news-and-events/sustainable-energy-fund-for-africa/

21 Additional Comments The fund has been approved and will be fully operational in 2012.


December 2011

BNDES AMAZON FUND


1 Name of Financing Source BNDES Amazon Fund


BNDES is authorized to raise donations for the Amazon Fund, issuing certificates equivalent to the tons of carbon that correspond to the amount of financial contribution to the Fund. These certificates are nominal, non-transferable and do not generate rights or credit of any nature. Amazon Fund's Donors

1) First Donation: Government of Norway

2) Second Donation: German Government

The Amazon Fund has already received donations from foreign governments and is preparing to receive donations from multilateral institutions, non-governmental organizations, companies and individuals.

3 Address

BNDES Departamento de Prioridades (DEPRI) Av. República do Chile, 100 - Protocolo - Térreo 20031-917 - Rio de Janeiro, RJ, Brasil


Claudia Costa [email protected]

5 Objectives

The Amazon Fund is aimed at raising donations for non-reimbursable investments in efforts to prevent, monitor and combat deforestation, as well as to promote the preservation and sustainable use of forests in the Amazon Biome. Besides this, the Amazon Fund may support the development of systems to monitor and control deforestation in other Brazilian biomes and in biomes of other tropical countries.

6 Region/Country Focus South America

7 Sector Focus Adaptation , Mitigation, Forestry , Natural Resource Management , Sustainable Land Management


December 2011

8 Technology Focus


The Amazon Fund provides non-reimbursable direct financing, mainly in the form of grants.


The Amazon Fund will be managed by the BNDES, the Brazilian Development Bank, which will also undertake to raise funds, facilitate contracts and monitor support projects and efforts. The Amazon Fund has an Guidance Committee − COFA, assigned with the responsibility of posting guidelines and monitoring the results obtained; and a Technical Committee − CTFA, appointed by the Ministry of Environment, whose is charged with certifying the emissions count from deforestation of the Amazon Forest. The Technical Committee, as referred to above, will verify the calculations made by the Ministry of Environment concerning the effective reductions of carbon emissions from deforestation, appraising the methodologies for calculating the deforested areas and the amount of carbon per hectare used in the respective calculation of emissions. After consulting the Brazilian Climate Change Forum, the Technical Committee will be put together, consisting of six authoritative technical and scientific experts appointed by the Ministry of Environment, for a term of three years, extendable once for an equal period.


The Previous Consultation is organized and based on the characteristics and information provided by the applicant and the basic elements of the project, which – if approved – will be detailed during the analysis phase. The Previous Consultation must be completed by the applicant himself, with no help from intermediaries, and the Amazon Fund team will be available to clarify questions and provide other information. In Module I, the Previous Consultation requests information on the applying institution, such as its history and the description of its main activities. Modules II and III seek to obtain information on the basic elements of the project, such as: the area envisaged, the contribution to reducing emissions from deforestation and forest degradation, the


December 2011

involvement of traditional communities and indigenous peoples and the major issues, as well as the problems to be solved. The Module IV deals with legal aspects and additional registration information.

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The Amazon Fund will support activities in the following areas:

Management of public forests and protected areas;

Environmental control, monitoring and inspection;

Sustainable forest management; Economic activities created with sustainable use

of forests; Ecological and economic zoning, territorial

arrangement and agricultural regulation; Preservation and sustainable use of biodiversity; Recovery of deforested areas.

Besides this, the Amazon Fund may support the development of systems to monitor and control deforestation in other Brazilian biomes and in biomes of other tropical countries.


Eligible projects should directly or indirectly contribute to reducing the deforestation of the Amazon Forest. Besides this, up to 20% of the Fund’s disbursements may support the development of systems for monitoring and controlling deforestation in other Brazilian biomes and in biomes of other tropical countries. The efforts of the Amazon Fund should abide by the guidelines of the Sustainable Amazon Plan - PAS and by the Action Plan for Prevention and Control of the Legal Amazon Deforestation - PPCDAM. Aiming to boost the operating efficiency, to better distribute the works of analysis and the BNDES’ monitoring of the projects, as well as its results, the areas for investment of Amazon Fund will be grouped under the following modalities, for operating purposes:

Protected Areas (Environmental Management and Services);

Sustainable Production Activities;


December 2011

Science & Technology Development Applied to Sustainable Use of Biodiversity; and

Institutional Development and Improvement of Control Mechanisms.


The BNDES Eligibility and Credit Committee decides that the application for financial collaboration complies with the operational policies of the BNDES and the guidelines and criteria of the Amazon Fund.


The presentation of projects to the Amazon Fund is carried out by submitting a Previous Consultation, according to the template available at the “Information Schedule for the Previous Consultation of the Amazon Fund”. Projects in science, technology and innovation, as well as those submitted directly by the public administration, must use specific models also available on the Amazon Fund site.


After signing the contract, there are disbursements of funds in accordance with the terms of the contract signed, and thus begins the implementation of the project by the beneficiary, as well as its follow-up by the Fund´s operational team. Disbursements are made in installments, in accordance with the progress of the project, to be confirmed by the monitoring technician. The fund disbursement is reported at the Amazon Fund website.


The amount approved up to September 2011 is USD 127.05 million (BLR 234.51 million). Of this USD 32.73 million (BLR 60.15 million) has been disbursed.


No limit




http://www.climatefundsupdate.org/listing/amazon-fund


December 2011

Document explaining the rationale of the Amazon Fund, including Conditions for Granting Financial Support and Procedures for support requests sent to the Amazon Fund : http://www.mma.gov.br/estruturas/sfb/_arquivos/amazon_fund_brazil_2008_95.pdf.

August 2011 Portfolio Report: http://www.amazonfund.gov.br/FundoAmazonia/fam/site_en/Esquerdo/Noticias/

A full list of projects is available here: http://www.amazonfund.gov.br/FundoAmazonia/fam/site_en/Esquerdo/Projetos/



December 2011

BULGARIA ENERGY EFFICIENCY FUND (BEEF)


1 Name of Financing Source Bulgaria Energy Efficiency Fund (BEEF)

2 Sponsoring Organizations

The Bulgarian Energy Efficiency Fund (BEEF) is initially capitalized entirely through grant financing - the main donors being the Global Environment Facility (GEF) through the IBRD (World Bank) - with 10 million US Dollars, the Government of Austria - with 1.5 million Euros, the Bulgarian Government - with 1.5 million Euros and private Bulgarian donors (DZI Bank /after the 1st of November 2007 - Eurobank EFG Bulgaria AD - BGN 100 000; Lukoil AD - BGN 100 000; Brunata Bulgaria - BGN 1000; EVN Bulgaria EAD - BGN 50 000; Ena Optima Ltd. - BGN 1 000; Minev and partners Ltd. - BGN 1 000).

3 Address Energy Efficiency and Renewable Sources Fund 4 "Kuzman Shapkarev" Str. 1000 Sofia


Dimitar Doukov Executive Director [email protected]

5 Objectives

The Fund's main environmental objective is to support identification, development and financing of viable EE projects, resulting in substantial reduction of greenhouse gases (GHGs).

6 Region/Country Focus Bulgaria

7 Sector Focus Energy efficiency

8 Technology Focus

9 Type of Funding Support (e.g., loans, grants, etc.) Grant financing


The Bulgarian Energy Efficiency Fund (BgEEF) is a legal entity, established in accord with Chapter 4, Section I of the Energy Efficiency Act (EEA). BgEEF manages the financial resources received by the Republic of Bulgaria from the Global Environment Facility (GEF) through the


December 2011

International Bank for Reconstruction and Development (IBRD) and from other donors. BgEEF is an independent legal entity, separate from any governmental agency or institution, and performs its activity in accordance with the EEA, the current legislation framework and the agreements with the major donors. BgEEF is structured as a self-sustainable commercial entity that concentrates its efforts on facilitating energy efficiency (EE) investments and on promoting the development of a working EE market in Bulgaria.


A necessary condition for a successful application with the Energy Efficiency and Renewable Sources Fund is the presence of a detailed energy audit allowing for an energy analysis and the choice of energy saving measures, along with Initial Project Proposal (IPP).

12


EERSF has the combined capacity of a lending institution, a credit guarantee facility and a consulting company. It provides technical assistance to Bulgarian enterprises, municipalities and private individuals in developing energy efficiency investment projects and then assists their financing, co-financing or plays the role of guarantor in front of other financing institutions.


All energy efficiency projects approved and supported by the Bulgarian Energy Efficiency and Renewable Sources Fund (EERSF) should meet the following eligibility criteria:

• The project should involve the application of well-proven technology;

• The project cost should range between BGN 30 000 and BGN 3 000 000although exceptions are possible if strongly justified;

• The equity contribution of the Project Developer should be at least 10%under a co-financing scheme "EERSF-commercial bank" and 25% for EERSF stand-alone financing;

• The project must have a payback time of up


December 2011

to five years.



Separate application forms are available for Municipalities, Corporate clients and Private individuals. The normal time period for project appraisal is 6 weeks, provided that the Project Developer manages to submit well on time all necessary documents, accompanying the Initial project proposal.


Following are the steps before Fund disbursement: • Project identification (Project Developer)

• Initial project screening (when necessary, EERSF/external consultancy company)

• Completion of Initial Project Proposal (IPP) (Project Developer)

• Submission of IPP and accompanying documents to EERSF (Project Developer)

• Assistance in IPP and accompanying documents completion and improvement (EERSF)

• Project appraisal and assessment (EERSF)

• Formal decision for approval of EERS financing (EERSF)

• Completion of negotiations for financing and disbursement of funds

17 Size of the Funding source (Annual or Total) $18 million



20 Sources for Further Information http://www.bgeef.com/



December 2011

CARIBBEAN DEVELOPMENT BANK (CDB) - SPECIAL DEVELOPMENT FUND


1 Name of Financing Source Caribbean Development Bank (CDB) - Special Development Fund


Listed below are Contributors to Special Development Fund (Unified) up to and including the Sixth Cycle, except where otherwise stated: Regional Members (BMCs) Anguilla, Antigua and Barbuda, The Bahamas, Barbados Belize, British Virgin Islands, Cayman Islands, Dominica,Grenada,Guyana,Haiti (SDF 6),Jamaica,Montserrat,St. Kitts and Nevis,St. Lucia,St. Vincent and the Grenadines,Trinidad and Tobago,Turks and Caicos Islands Regional Members (Non-BMCs),Colombia, Mexico, Venezuela Non-Regional Members Canada, China, People's Republic of (SDF 4, 5 and 6), France (SDF 1 to 4), Germany (SDF 1 to 4, and 6),Italy, United Kingdom Non-Member Netherlands (SDF 1 to 4)

3 Address

Caribbean Development Bank P.O. Box 408 Wildey St. Michael BB11000 Barbados West Indies


Mr. Adrian Debique Deputy Director, Corporate Planning Finance and Corporate Planning Department Telephone: (246) 431-1670 Email: [email protected] Email: [email protected]

5 Objectives CDB intends to be the leading catalyst for development resources into the Region, working in an efficient, responsive and collaborative manner with our BMCs and other development partners,


December 2011

towards the systematic reduction of poverty in their countries through social and economic development. The Special Development Fund (SDF) was established in 1970 to provide loans of high development priority. Initial funding for the SDF, and subsequent contributions thereto, were provided on varying terms and conditions by different Contributors. The Unified Special Development Fund [SDF(U)] was accordingly created in 1983 to overcome the problems associated with individual donors and funding arrangement. Supporting environmental sustainability and advancing the climate change agenda has been identified as a core theme for the Seventh Cycle of the Special Development Fund (2009-2012).


Members of CDB are either: States and territories of the Caribbean

region or Non-regional states, which are members of

the United Nations or any of its specialised agencies or of the International Atomic Energy Agency.

7 Sector Focus Disaster risk management and climate change adaptation

8 Technology Focus


Grants and Loans


The permanent headquarters of the bank is located at Wildey, St. Michael, Barbados. There are no other offices of the bank. The headquarters serves all of the regional borrowing member countries with staff recruited from its members. Funding for SDF (U) is provided in 4-year replenishments. Contributors to the SDF (U) enter into negotiations with the Bank with the objective of agreeing on the priority areas which should be addressed by the Bank over the next four-year cycle. These negotiations take account of the economic and social situation in the BMCs, the international and regional environment, and CDB’s own capabilities and comparative advantage.


December 2011

Contributors and the Management of the Bank arrive at an understanding concerning the amount of resources which will be necessary to realise the objectives agreed for the new cycle. Negotiations for the replenishment of the SDF (U) for a sixth cycle, covering the period 2005-2008, were concluded in December 2005.


12


SDF programmes: - Basics Needs Trust Fund (with financial support from USAID and CIDA) The Programme supports sustainable asset building and livehood strategies of communities - Caribbean Technological Consultancy Services Network (CTCS) Caribbean Technological Consultancy Services (CTCS) is a network operated by the Private Sector Development Division (PSDD) of the CDB in cooperation with regional and National institutions, laboratories, industrial enterprises and consultants. CTCS contributes to strengthening private sector capabilities by linking people who have business and technical experience with business that need consulting advice and assistance. Interventions are carried out under three (3) principal modes:

1. Direct Technical Assistance (facilitated by consultants)

2. Workshops 3. Job Attachments

13 Eligibility Criteria No information available online on application and eligibility criteria







December 2011


20 Sources for Further Information http://www.caribank.org/



December 2011

CLEAN TECHNOLOGY FUND (CTF)


1 Name of Financing Source Clean Technology Fund (CTF)


3 Address

Climate Investment Funds The World Bank Group Admin Unit 1818 H Street NW Washington DC 20433


[email protected]

5 Objectives

The CTF seeks to have transformational impacts by supporting investment programs that:

• Constitute a dominant part of countries’ low carbon development strategies;

• Shape the course of markets for technology deployment; and/or

• Transcend GHG emissions savings objectives by providing broader development and environmental benefits.


Countries- Colombia, Egypt, India (pending), Indonesia, Kazakhstan, Mexico, Morocco, Nigeria, Philippines, South Africa, Thailand, Turkey, Ukraine, Viet Nam Regional programmes - Middle East and North Africa Regional program, Algeria, Egypt, Jordan, Morocco, Tunisia

7 Sector Focus

• Power Sector: Renewable energy and highly efficient technologies to reduce carbon intensity

• Transport Sector: Efficiency and modal shifts • Energy Efficiency: Buildings, industry, and

agriculture



December 2011


Co-financing , Grant , Loan , ODA


The governance and organizational structure of the CTF includes a CTF Trust Fund Committee, an MDB Committee, a Partnership Forum, an Administrative Unit and a Trustee.


A joint exercise to develop Investment Plan

12


Mitigation, Agriculture , Energy , Energy Efficiency , Fuel Switching , Industry , Infrastructures , Transport Concessional financing instruments, such as grants and concessional loans, risk mitigation instruments, such as guarantees, and equity. Technical assistance.

13 Eligibility Criteria To be eligible for CTF funding a country must: • be ODA eligible • have an active MDB country program


Potential GHG emission savings

Demonstration potential

Development impact

Implementation potential


When a country expresses interest in accessing CTF financing, the MDBs concerned will conduct a joint mission with other development partners to discuss with the government, private industry and other stakeholders how the fund may help finance scaled-up low carbon activities.


1. An investment plan is developed under the leadership of the country to describe how CTF financing will be used in major sectors of the economy through a joint MDB program

2. A Trust Fund Committee reviews the investment plan, endorses further development of activities for CTF financing, and facilitates prioritization of projects according to agreed criteria


December 2011


Total USD 4.5 billion pledged by donors (Australia, France, Germany, Japan, Spain, Sweden, United Kingdom, United States)



An independent evaluation of the operations of the Trust Fund and the impacts of its activities will be carried out jointly after three years of operations by the independent evaluation departments of the MDBs.

20 Sources for Further Information http://www.climateinvestmentfunds.org


Key features of the CTF design are: • Utilizing MDB capabilities to leverage private

and public resources for low carbon investments;

• Promoting environmental and development co-benefits to demonstrate how low carbon technologies can contribute to national development goals and strategies;

• Providing concessional financing with a grant element tailored to cover the identifiable additional costs of the investment necessary to make the project viable.


December 2011

CLIMDEV-AFRICA SPECIAL FUND (CDSF)


1 Name of Financing Source ClimDev-Africa Special Fund (CDSF)


The CDSF is a joint initiative of the African Development Bank (AfDB), the African Union Commission (AUC) and the United Nations Economic Commission for Africa (UNECA)

3 Address


Felix Tobin African Development Bank [email protected]

5 Objectives

The objective of the CDSF is to strengthen the institutional capacities of national and sub-regional bodies to formulate and implement effective climate-sensitive policies.

6 Region/Country Focus Africa

7 Sector Focus

Adaptation , Capacity Building , Mitigation, Agriculture, Climate-Resilient , Energy , Forestry , Low-Carbon, Natural Resource Management , Populations & Human Settlements , Sustainable Land Management , Water



Co-financing , Grant , Other


Decision-making with regards to the operations of the CDSF will be carried out by consensus through two main organs: the Governing Council and the Bank’s governance structure.

The Commission of the African Union (AUC): The AUC will provide political leadership for the CDSF by coordinating continental policy response and ensuring buy-in from African governments. The AUC shall also participate in the decision-making process for the staffing of the ClimDev-Africa secretariat and the CDSF Coordinating Unit.


December 2011

The Governing Council: The Governing Council is a multi-stakeholder organ composed of decision-making members drawn from AUC, UNECA and AFDB and donor representative(s) and non-voting members drawn from the Regional Economic Communities, civil society and other relevant stakeholder groups.

The United Nations Economic Commission for Africa (UNECA): The Africa Climate Policy Centre (ACPC) of UNECA shall host the Secretariat for the ClimDev-Africa Program and shall be responsible for implementing national-level investments and policy-related projects.


12


The CDSF will support three main areas of interventions:

• Generation and wide dissemination of reliable and high quality climate information in Africa;

• Capacity enhancement of policy makers and policy support institutions to integrate climate change information into development programs;

• Implementation of pilot adaptation practices that demonstrate the value of mainstreaming climate information into development.


Projects that are eligible for funding must satisfy the following criteria:

• Consistency with objectives of the CDSF; priority will be given to regional projects to encourage capacity-building, co-operation and coherence at a regional level;

• Can demonstrate that they support and do not duplicate other activities already underway through other vehicles;

• Can demonstrate positive impacts on the livelihoods of stakeholders (particularly the poor, women and vulnerable communities and population groups) and on the


December 2011

environment; • That their activities clearly demonstrate

how lesson-learning and knowledge on climate change will be shared between organisations and states, and reach end users;

14 Proposal Evaluation Criteria Same as eligibility criteria


The ClimDev-Africa Program Secretariat issues calls for proposals. The frequency of such calls will be established by the Governing Council.

Project proposals should be prepared by the Interested Parties (governments, NGOs, civil society, private sector entities, research entities, technical partners) using templates approved by the Governing Council. The proposals are then submitted to the ClimDev-Africa Program Secretariat for review.


Financing will be provided through a blend of programmatic funding and pooled Special Fund modalities.


Total expenditure is expected to be USD 136 million over 4 years in the first instance (2009-2012). It is important to note that since the Special Fund is meant to be demand-led, this figure is likely to be revised.


A floor of USD 250,000 and a ceiling of USD 10 million will be applied for any financing from the CDSF operations. However, subject to availability of funds, and based on the strategic direction provided by the Governing Council, the CDSF may occasionally consider financing requests for amounts outside this window.


20 Sources for Further Information http://www.climatefinanceoptions.org/cfo/node/174



December 2011

E+CO CAREC FUND


1 Name of Financing Source E+Co CAREC Fund


The Central American Renewable Energy and Cleaner Production Facility (CAREC), is an innovative venture capital financing facility developed by E+Co Capital with financial and institutional support of the Multilateral Investment Fund (MIF), the Inter-American Development Bank (IDB), the Central American Bank for Economic Integration (CABEI), the Belgian Investment Company for Developing Countries (BIO), the Finnish Development Finance Company, Finnfund and the Dutch financial entity Triodos Bank.

3 Address E+Co Capital P.O. Box: 13443-1000 San José, Costa Rica


Ricardo de Matheu CEO and Manager [email protected]

5 Objectives

CAREC's mission is to promote the use of renewable energy technologies for electricity generation and improved energy use and other inputs for the efficient and cleaner operation of enterprises in Central America.

6 Region/Country Focus Belize, Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and Panama in Central America

7 Sector Focus Renewable energy, energy efficiency and cleaner production

8 Technology Focus


Venture capital financing

10 Management/Governance CAREC is managed by E+Co Capital, an entity controlled by E+Co


12 Eligible Projects/Programs CAREC only participates during the implementation


December 2011


phase of renewable energy projects, financing the construction and purchasing equipment. CAREC does not fund pre-investment costs of the initial stage of development of the projects





CAREC does not take majority ownership in the project companies in which it invests. Moreover, CAREC limits its equity participations to preferred shares and except for special cases; it does not invest in common shares



CAREC'S investments range from US$500,000 to approximately US$2.5 million per project.



http://www.eandco.org/eandcocapital/en_usa/carec.html


Financial Instruments • Preferred Shares: CAREC finances

renewable energy projects by investing in preferred shares of the project company. CAREC holds its preferred shares for a pre-agreed period of time upon which, shares will be redeemed, based on a schedule established with the client. Financing through preferred shares is limited between 20% and 25% of the total cost of the project.

• Subordinated Debt: As an alternative to preferred shares, subordinated loans are offered. Such loans imply assuming higher risks than a senior lender, who is normally entitled to first degree mortgages or liens. Subordinated lenders accept second degree


December 2011

guarantees; therefore, due to the increased inherent risk, subordinated loan lenders are entitled to higher interest rates.


December 2011

FOREST INVESTMENT PROGRAM (FIP)


1 Name of Financing Source Forest Investment Program (FIP)

2 Sponsoring Organization Strategic Climate Fund The World Bank Group

3 Address

Climate Investment Funds Admin Unit The World Bank Group 1818 H Street NW Washington DC 20433


[email protected]

5 Objectives

The FIP will aim to achieve 4 specific objectives: 1. To initiate and facilitate steps towards

transformational change in developing countries forest related policies and practices.

2. To facilitate the leveraging of additional and sustained financial resources for REDD, through a possible UNFCCC forest mechanism, leading to an effective and sustained reduction of deforestation and forest degradation, thereby enhancing the sustainable management of forests.

3. To pilot replicable models to generate understanding and learning of the links between the implementation of forest-related investments, policies and measures and long-term emission reductions and conservation, sustainable management of forests and the enhancement of forest carbon stocks in developing countries. By committing to apply a priori and ex post impact assessment of programs and projects, the FIP will ensure that the outcomes and effectiveness of FIP-supported interventions in reducing


December 2011

deforestation and forest degradation can be measured; and

4. To provide valuable experience and feedback in the context of the UNFCCC deliberations on REDD

6 Region/Country Focus Brazil, Burkina Faso, Democratic Republic of Congo, Ghana, Indonesia, Lao PDR, Mexico, Peru.

7 Sector Focus Mitigation, Climate-Resilient , Forestry , Low-Carbon , Sustainable Land Management



Grant , ODA


The SCF Trust Fund Committee will establish a Sub-Committee for the FIP (FIP S-C) to oversee the operations and activities of the Pilot Program.

An Expert Group will be established by the FIP Sub-Committee to make recommendations on selection of country or regional pilots for the FIP. The Expert Group should include members from both developed and developing countries, indigenous people and local communities, and be gender balanced. Members are chosen on the basis of their expertise, strategic and operational experience, and with a wide-range of knowledge in scientific, economic, environmental, and the social aspects of conservation and sustainable use of forest ecosystems and climate change.


12


Following activities are supported: 1. Institutional capacity, forest governance and

information such as: implementation of systems for forest monitoring, information management and inventory; support for legal, financial and institutional development including forest law enforcement, cadastral mapping and land tenure reform; removal of perverse incentives favoring deforestation and


December 2011

degradation; cross-sectoral and landscape based planning exercises; transfer of environmentally sound technology; and building capacities of indigenous peoples and local communities.

2. Investments in forest mitigation measures, including forest ecosystem services such as: forest conservation; promotion of payments for environmental services and other equitable benefit-sharing arrangements; restoration and sustainable management of degraded forests and landscapes; afforestation and reforestation on previously deforested land; restructuring of forest industries and promotion of company-community partnerships; forest protection measures; improved land management practices; and promotion of forest and chain of custody certification.

3. Investments outside the forest sector necessary to reduce the pressure on forests such as: rural development and social and economic infrastructure programs; alternative energy programs; alternative livelihood and poverty reduction opportunities; agricultural investments in the context of rationalized land-use planning; and agricultural intensification including agro-forestry.


Country eligibility of the FIP will be based on: • Official Development Assistance (ODA)-

eligibility (according to the Organization for Economic Co-operation and Development/Development Assistance Committee (OECD/DAC) guidelines);

• An active MDB country program. For this purpose, an active” program means where an MDB has a lending program and/or on-going policy dialogue with the country.


December 2011


The selection of pilot programs are based on the following criteria:

• Program potential to contribute to FIP objectives described above under “Section II. Objectives and Purpose of FIP”, and adherence to the principles described under “Section III. FIP Principles”;

• Country preparedness and ability – institutional and otherwise – to undertake REDD initiatives, taking into account government efforts to date and government willingness to move to a strategic approach to REDD and to integrate the role of forests into development. The selection of pilot programs would also be made on the basis of a REDD investment note, demonstrating that a REDD strategy and investment portfolio is at an advanced stage of development;

• Country distribution across regions and biomes, ensuring that pilot programs generate lessons on how to go to scale with respect to immediate action to curb high rates of deforestation, maintenance of existing carbon stocks within pristine forests, enhancement of carbon stocks on degraded forest lands and building effective capacities for sustainable forest management.



Pledges, deposits and funding decisions for SCF and its subsidiary funds (PPCR, SREP and FIP) are reported to the Sub Committee in twice-yearly trustee reports. Based on the monitoring results of the MDBs, the FIP-SC will report regularly to the SCF Trust Fund Committee, and an independent joint evaluation of the operations of the FIP and its activities will be carried out after three years of operations by the independent evaluation departments of the MDBs. Results achieved through the FIP should be


December 2011

published and made publicly available. Full reporting criteria, including results measurement at the programmatic, country and institutional levels, will be proposed by the FIP-SC and approved by the Trust Fund Committee of the SCF. The key performance criteria should pertain to emissions reductions achieved or emissions avoided.


USD 578 million (Australia, Denmark, Japan, Norway, Spain, UK, US)


N/A


N/A

20 Sources for Further Information www.climateinvestmentfunds.org

21 Additional Comments The Forest Investment Program is currently fully subscribed; new funding will be released at a later date.


December 2011

GEF - LEAST DEVELOPED COUNTRIES FUND (LDCF)


1 Name of Financing Source GEF - Least Developed Countries Fund (LDCF)

2 Sponsoring Organization The Global Environment Facility (GEF) operates the financial mechanism.

3 Address GEF Secretariat 1818 H Street , NW, MSN G6-602 Washington, DC 20433, U.S.A.


Ms. Bonizella Biagini GEF Program Manager [email protected]

5 Objectives

To address the unique needs of the 48 Least Developed Countries (LDCs), which are especially vulnerable to the adverse impacts of climate change.

6 Region/Country Focus Least developed countries

7 Sector Focus Agriculture and livestock, forestry, human health, disaster risk reduction, coastal zone management, and water resources management, among others.



Grant , ODA , Technical assistance


The LDCF is governed by the Global Environmental Facility and therefore is implemented only after the approval of the GEF Council and subsequent endorsement by the GEF CEO. During the project approval process, the Scientific and Technical Advisory Panel (STAP) also advises the GEF bodies and reviews the PIF once it is included in the work program.


Applicants seeking LDCF funding must show cofinancing plans and a cost-effectiveness study for their proposed activity.


Activities supported under the fund include preparing and implementing National Adaptation Programs of Action (NAPAs) to identify the immediate needs of LDCs to adapt to climate change.


December 2011


Qualifying projects are Adaptation , Capacity Building , Mitigation, Agriculture , Climate-Resilient , Coastal Zone Management , Disaster Risk Reduction , Fisheries , Forestry , Populations & Human Settlements , Sustainable Land Management , Water.

13 Eligibility Criteria 48 LDCs that have completed a NAPA; project must address NAPA priority area

14 Proposal Evaluation CriteriaLDCF grants are awarded to adaptation projects that address high-priority areas identified in the approved, country-specific NAPA.


LDCF project proponents contact the in-country focal point to ensure that their activity aligns with the adaptation priorities of the country. Then a Project Identification Form (PIF) is completed and submitted to the GEF Secretariat for approval.

Approved PIFs are then submitted to the biannual GEF Council meetings for inclusion in a work program and a Program Framework Document (PFD), which is sent to the GEF CEO for endorsement.


Once a PIF is cleared by the GEF Council, a project preparation grant is awarded to the proponent in order to being the first phases of readying the adaptation intervention.


Total amount USD 169 million


Details not provided


The implementation, monitoring and evaluation is done by the selected GEF Agency for example UNDP in consultation with the project proponent.


LDCF project page LDCF - UNFCCC page http://www.climatefinanceoptions.org/cfo/node/60



December 2011

GLOBAL FACILITY FOR DISASTER REDUCTION AND RECOVERY (GFDRR)


1 Name of Financing Source Global Facility for Disaster Reduction and Recovery (GFDRR)


3 Address 1818 H Street, N.W. Mailstop: MC 5-512 Washington, DC 20433 USA


Saroj Kumar Jha [email protected]

5 Objectives

The partnership’s mission is to mainstream disaster risk reduction (DDR) and climate change adaptation in country development strategies by supporting a country-led and country-managed implementation of the Hyogo Framework for Action (HFA).

6 Region/Country Focus Africa, Asia-Pacific, South and Central America, Small Island Developing States

7 Sector Focus

Adaptation , Capacity Building , Technology, Agriculture , Climate-Resilient , Coastal Zone Management , Disaster Risk Reduction , Fisheries , Forestry , Infrastructures , Natural Resource Management , Populations & Human Settlements , Sustainable Land Management , Tourism , Transport , Waste Management , Water



Co-financing , Grant , Other , Risk management , Technical assistance. The GFDRR operates along Three Tracks: Track I – Global and Regional Cooperation: This track promotes well-functioning international capacities and cooperation agreements in the ISDR System to support national disaster risk management and climate change adaptation. Track I financing is executed through the United Nations International Strategy for Disaster Reduction (UNISDR). Track II – Disaster Risk Reduction Mainstreaming: The second track provides ex-ante


December 2011

assistance to developing countries to mainstream and expand disaster risk reduction and climate change adaptation activities. Track II is primarily focused on achieving results through country-specific work. Beneficiary GFDRR priority countries are low- or middle-income countries prone to high disaster risks and/or requiring special attention due to adverse geo-economical settings, such as small-island and fragile states. Track III – Sustainable Recovery: This track provides ex-post support to developing countries upon their request to fast-track disaster recovery and to ensure that future risk reduction measures are incorporated into post-disaster recovery plans and programs.


The GFDRR is managed by the World Bank on behalf of the participating donors and other partnering stakeholders. GFDRR‘s governance, mission, operating mechanisms, and organizational structure are clearly defined in its Partnership Charter that was adopted in February 2007 and amended in April 2010 to include selected developing country governments invited by the Consultative Group on a two year staggered-rotation basis as non-contributing members. GFDRR’s governance includes:

The Secretariat: Carries out the mission of the GFDRR and manages its day-to-day operations.

The Consultative Group: The Consultative Group (CG) is GFDRR’s policy making body and creates the essence of most GFDRR long-term strategic objectives while overseeing expected results.

The Results Management Council; provides technical guidance to support GFDRR-financed activities.


12

Eligible Projects/Programs (whether only for soft items such as capacity building or policy advice, etc, or also for hard items, such as for plant and equipment) or

Track II financing could be used for: Implementation of the 31 GFDRR priority

countries’ national disaster risk reduction and climate change adaptation programmes or for supporting such work in other countries in


December 2011

Organizations Africa, Caribbean, and the Pacific Analytical and advisory activities (country,

regional, and global scope)

13 Eligibility Criteria Same as evaluation criteria


All proposals for GFDRR assistance must fit within one of three Tracks. Proposals are assessed by the GFDRR Secretariat against the following set of criteria:

1. Consistency with the GFDRR Mission: All activities must be consistent with the GFDRR’s overarching objective of mainstreaming disaster risk reduction and assisting sustainable recovery to help eliminate poverty and achieve sustainable development.

2. Government Commitment: There must be clear evidence of country ownership of country-specific activities. Global, regional, or multilateral activities will not normally be required to meet this criterion. However, as determined by the GFDRR Secretariat, the criterion may be applied to multilateral activities that are designed to benefit directly a small number of easily-identifiable countries.

3. Donor Coordination: The GFDRR activities must be undertaken in a way that promotes effective coordination with the activities of GFDRR partners. In particular, country-specific activities are undertaken only if the GFDRR Secretariat is satisfied that the proposed activity does not conflict with programs or activities being undertaken by the World Bank Group, the ISDR system, other GFDRR donor partners or, to the extent this is easily verifiable, by other donors, United Nations agencies, and other stakeholders outside of GFDRR. Joint initiatives involving national governments, the UN system, IFIs and others at the


December 2011

country level are encouraged to seek Track II and III financing.

4. Co-financing: All proposals should include co-financing with a target of at least 10% financing from the proponent or the relevant low- or middle income country government, as well as from other sources. Co-financing may be in the form of in-kind assistance.


World Bank Group staff can apply through GFDRR's Results Based Management System (RBMS), an intranet-based system for monitoring and reporting on all GFDRR financed activities. Other organizations can request assistance through following GFDRR’s website: Track II - Request for Assistance Track III - Request for Assistance



GFDRR portfolio: $244,310,387


From under $100,000 (individual grants) to over $1 million (country programmes)



GFDRR site GFDRR - UNFCCC page GFDRR webpage on ongoing and completed projects

Application process http://www.climatefinanceoptions.org/cfo/node/207



December 2011

GLOBAL ENERGY EFFICIENCY AND RENEWABLE ENERGY FUND (GEEREF)


1 Name of Financing Source Global Energy Efficiency and Renewable Energy Fund (GEEREF)

2 Sponsoring Organization The European Union, Germany and Norway are GEEREF’s founding investors

3 Address

GEEREF 5 Allée Scheffer Luxembourg L-2520


[email protected]

5 Objectives

• Cut greenhouse gas emissions • Increase access to sustainable energy

services • Support financial sustainability

6 Region/Country Focus Developing countries and economies in transition

7 Sector Focus Mitigation, Energy , Energy Efficiency , Renewable Energy

8 Technology Focus

The emphasis will be placed on deploying technologies with a proven technical track record.

• Renewable Energy – including but not limited to small hydro, solar, wind, biomass and geothermal

• Energy Efficiency – including but not limited to waste heat recovery, energy management in buildings, cogeneration of heat and power, energy storage and smart grids


Co-financing , Equity , Technical assistance


Screening and due diligence are done by the GEEREF front office. Support functions such as legal, tax, accountancy or risk management are carried by dedicated advisors at the EIB and EIF. Final investment decision is granted by the


December 2011

investment committee representing GEEREF’s investors and advisors.


Provide appropriate documentation such as a Private Placement Memorandum or any other relevant supportive documentation allowing GEEREF’s team to assess the eligibility of the project. The team will value the compatibility with GEEREF’s investment focus and will then contact the eligible teams.

12


Part of investment comprises: • Small hydro (less tan 30 MW) and biomass

with on-shore wind also offering significant potential;

• Co-firing solutions (e.g. co-firing coal and bagasse);

• Manufacturing, energy service, trading and micro finance ventures;

• Photovoltaics only for middle and high-income contexts because too costly.

GEEREF will provide funding or technical assistance to private equity funds focusing on:

• Renewable Energy: Biomass, Biofuels (sustainability criteria apply), Wind, Solar, Geothermal, Hydropower (less than 30 MW) and Hybrid Power Systems. No nuclear.

Energy Efficiency: Technology and Applications.


• Structured as a Fund-of-Funds, GEEREF invests in private equity funds that specialise in providing equity finance to small and medium-sized project developers and enterprises (SMEs).

• These SMEs should focus on renewable energy and energy efficiency projects and/or technologies. The candidate private equity funds should focus on projects requiring up to €10 million equity investment and fulfilling a substantial gap in the market.

• The candidate private funds must have a


December 2011

pipeline of environmentally and financially sustainable projects and must meet strict investment criteria in order to qualify for GEEREF funding.

• GEEREF does not directly provide funding to renewable energy and energy efficiency projects or enterprises.


For Technical Assistance: In parallel with its investment in GEEREF, the European Commission founded a Regional Fund Support Facility, which is administered by the EIB group within its GEEREF activities. The aim of the facility is to improve and facilitate the development of investible projects. The technical assistance grant can go up to EUR 1 million. For Co-financing: Possible on a case-by-case basis. Up to 30% of GEEREF’s total commitments by investors. For Investment: Structured for both public and private investors and as a Luxembourg SICAV, GEEREF operates as a Fund-of-Funds. GEEREF invests in private equity funds that specialize in equity finance for small and medium-sized projects. These projects must focus on renewable energy and energy efficiency production and/or technologies, requiring up to €10 million equity investment and fulfilling a substantial gap in the market. The candidate private funds must demonstrate that team members gather sufficient experience in both the RE & EE sectors as well as in infrastructure investments. A verifiable pipeline of projects meeting GEEREF’s investment criteria must be available.

15 When and How to Apply Interested funds managers and sponsors are required to contact GEEREF.


N/A


Total amount EUR 108 million Estimated Latest year value USD 29.9 million


N/A


No information


December 2011


http://geeref.com/ http://www.climatefinanceoptions.org/cfo/node/192



December 2011

GREEN CLIMATE FUND (GCF)


1 Name of Financing Source Green Climate Fund (GCF)

2 Sponsoring Organization Financial mechanism of the UNFCCC

3 Address


5 Objectives

GCF agenda of: (i) provide sustainable finance at the scale needed; (ii) fit into existing development assistance and climate financing programs; and (iii) allocate and deliver funds to developing countries. Will seek approval during the 17th session of the UNFCCC in Durban in Dec 2011.

6 Region/Country Focus Developing countries

7 Sector Focus adaptation and mitigation




The Fund will be governed by the Green Climate Board comprising 24 members, as well as alternate members, with equal number of members from developing and developed country Parties. The assets of the Green Climate Fund shall be administered by a trustee only for the purpose of, and in accordance with, the relevant decisions of the Green Climate Fund Board. The World Bank was invited by the COP to serve as the interim trustee of the Green Climate Fund, subject to a review three years after operationalization of the Fund. The Green Climate Fund shall be designed by a Transitional Committee. The Transitional Committee comprises 40 members, with 15 members from developed country Parties and 25 members from developing country Parties, with members having the necessary experience and


December 2011

skills, notably in the area of finance and climate change.


To be developed

12


The Green Climate Fund will support projects, programmes, policies and other activities in developing country Parties using thematic funding windows.

13 Eligibility Criteria To be developed


To be developed

15 When and How to Apply To be developed


To be developed


Commitment by developed countries to transfer US$100 billion a year by 2020


To be developed


To be developed


http://unfccc.int/cooperation_and_support/financial_mechanism/green_climate_fund/items/5869.php



December 2011

IDB - INFRASTRUCTURE FUND (INFRAFUND)


1 Name of Financing Source IDB - Infrastructure Fund (InfraFund)

2 Sponsoring Organization IDB

3 Address IDB Headquarters 1300 New York Avenue, N.W. Washington, D.C. 20577, USA


Inter-American Development Bank [email protected]

5 Objectives The InfraFund aims to promote the formation of public-private partnerships to increase the provision of infrastructure through financial contributions.

6 Region/Country Focus Latin America or the Caribbean

7 Sector Focus Adaptation , Capacity Building , Mitigation,



Technical assistance


The InfraFund is coordinated by the InfraFund Coordinator. In order to grant eligibility to a proposal the InfraFund Coordinator receives input from other IDB technical departments, from country coordinators and budget officers.


An expression of Interest to be submitted.

12


Eligible projects include Energy , Energy Efficiency , Fuel Switching , Infrastructures , Low-Carbon , Renewable Energy , Sustainable Land Management , Tourism , Transport , Urban , Waste Management. The resources of the InfraFund can be used to hire specialized consulting services, purchase goods necessary to carry out studies, and conduct other specialized activities directed to preparing new infrastructure projects for financing.


December 2011


Regional, national, and sub-national proposals by public, mixed-capital and private entities from all IDB member countries are eligible for InfraFund support. Beneficiary entities must demonstrate the ability to carry out the works. A letter on non-objection is required from the government. 20% counterpart financing is required.


be consistent with the objectives of the country’s infrastructure development plan and policies;

have high development impact in the sector;

be institutionally and environmentally sustainable;

be in support of IDB’s own strategy in support to the sector, and

be in coordination with other IDB or other external donor funds and initiatives.


First step is to submit an expression of interest, which is reviewed by an IDB expert. The corresponding Bank’s Country Office(s) is notified about the interest of developing a project in its jurisdiction.


Info not available


USD 20 Million.


Maximum financed: USD 1,500,000.


Info not available


www.iadb.org/infrafund http://www.climatefinanceoptions.org/cfo/node/53



December 2011

IDB GROUP - MULTILATERAL INVESTMENT FUND (MIF)


1 Name of Financing Source IDB Group - Multilateral Investment Fund (MIF)


MIF currently has 39 donating member countries from Latin America and the Caribbean, North America, Europe and Asia. Argentina, Bahamas, Barbados, Belize, Bolivia, Brazil, Canada, Chile, China, Colombia, Costa Rica, Dominican Republic, Ecuador, El Salvador, France, Guatemala, Guyana, Haiti, Honduras, Italy, Jamaica, Japan, Korea, Mexico, Netherlands, Nicaragua, Panama, Paraguay, Peru, Portugal, Spain, Suriname, Sweden, Switzerland, Trinidad and Tobago, United Kingdom, United States, Uruguay and Venezuela.

3 Address

Multilateral Investment Fund Inter-American Development Bank 1300 New York Avenue, N.W. Washington, D.C. 20577


Zachary Levey [email protected] [email protected]

5 Objectives

The Multilateral Investment Fund (MIF) provides technical support and investments aimed to increase the competitiveness of small and micro enterprises. The MIF aims to become a major force in helping smaller firms and individuals benefit from market opportunities related to climate change and in assisting businesses and low-income households to identify and manage the risks associated with this challenge.


Eligible Countries: Argentina, Bahamas, Barbados, Belize, Bolivia, Brazil, Chile, Colombia, Costa Rica, Dominican Republic, Ecuador, El Salvador, Guatemala, Guyana, Haiti, Honduras, Jamaica, Mexico, Nicaragua, Panama, Paraguay, Peru, Suriname, Trinidad and Tobago, Uruguay, Venezuela

7 Sector Focus • Access to Clean Energy and Basic Services


December 2011

• Access to Carbon Markets • Sustainable Agriculture and Forestry • Climate Change Adaptation (private sector

focus) • Access to Knowledge and Information



Equity , Grant , Loan , Technical assistance


Project abstracts are sent from IDB Country Offices to the Office of the MIF in Washington, D.C. The MIF Policy and Operations Committee will determine whether or not a proposed project abstract is technically eligible. If granted eligibility, a MIF project team will work with partners to complete a Donors Memorandum for approval and funding by MIF Donors. A decision may also be made to defer MIF eligibility by the POC, pending a request for further information or for the re-design of the proposal.


12


MIF grants are used to promote (i) access to finance, (ii) business framework, and (iii) enterprise development.


Grants: private sector institutions must be non-profit and can include non-governmental organizations (NGOs), industry associations, chambers of commerce and foundations. Under certain circumstances grants are provided to for-profit organizations as well. MIF Investments: typically fund private financial institutions, such as banks, venture capital funds, cooperatives, microfinance institutions or NGOs, who can then on-lend the resources to the benefit of micro and small businesses region-wide. Counterpart Requirements: depending on the country, the executing agency is responsible for counterpart contributions of at least 30% of the


December 2011

total amount of operation

14 Proposal Evaluation Criteria Technical eligibility of the project


Applications can be submitted any time of the year. These should be 3-5 pages and sent to the IDB Country Representative in the IDB Country Office in the country where the project would be executed. In regional proposals, abstracts should be submitted to the Country Office in the country in which the project executing unit will be located. Applications are then forwarded to the MIF in Washington, DC for a determination of technical eligibility.



Total USD 600 million (approx. USD 120 million per year)




http://www.iadb.org/mif http://www.climatefinanceoptions.org/cfo/node/61



December 2011

IDB REGIONAL FUND OF AGRICULTURAL TECHNOLOGY (FONTAGRO)


1 Name of Financing Source IDB Regional Fund of Agricultural Technology (FONTAGRO)

2 Sponsoring Organization The Inter-American Development Bank (IDB) and the Interamerican Institute for Cooperation on Agriculture (IICA)

3 Address

Technical-Administrative Secretariat Inter-American Development Bank 1300 New York Avenue NW, Stop W0908 Washington, DC 20577


Cristina Sánchez Inter-American Development Bank [email protected]

5 Objectives

To support research and innovation in the agricultural sector. The Fund contributes to the reduction of poverty, promotes competitiveness of agri-food chains and encourages the sustainable management of natural resources.


Argentina, Bolivia, Chile, Costa Rica, Ecuador, Spain, Honduras, Nicaragua, Panama, Paraguay, Peru, Uruguay, Dominican Republic, Uruguay and Venezuela

7 Sector Focus

• Small-scale sustainable agriculture • Productivity / sustainability of value chains • Health and safety of food products and • Soil and water management • Characterization, improvement and

optimization of genetic resources • Policies, sectoral and institutional

strengthening activities.

8 Technology Focus Innovation in technologies


Co-financing , Grant


December 2011


The Fund has a simple structure based on a Board of Directors (BOD), which has a representative from each member country and a Secretariat (TAS) responsible to execute the decisions taken by the Board. The Secretariat has an Executive Secretary, an administrator and a program associate, which are complemented by external consultants on specific issues as needing.


Respond to Call for proposals

12


Adaptation, Capacity Building, Mitigation, Agriculture, Sustainable Land Management, Water The Fund is a competitive mechanism. Projects are funded by means of grant resources from the interest generated by the capital and by other organizations sharing the Fund’s mission.

13 Eligibility Criteria Project financing < $500,000

14 Proposal Evaluation Criteria Institutional capabilities, technical quality and socio-economic and environmental impact.

15 When and How to Apply The Fund launches Call of Proposals usually by the end of February


Info not available


USD 52.3 million (up to date)


Project financing < $500,000 The total funding depends on availability of resources.


Info not available


http://www.fontagro.org http://www.fontagro.org/pubs/pdf/2009_fontagro_in_brief.pdf http://www.fontagro.org/Projects/PDF%20Proyectos/2009_eng_projects.pdf



December 2011


December 2011

IMF - GREEN FUND


1 Name of Financing Source IMF - Green Fund

2 Sponsoring Organization International Monetary Fund (IMF)

3 Address International Monetary Fund 700 19th Street, N.W., Washington, D.C. 20431


[email protected]

5 Objectives

To create a mechanism for developed countries to contribute to financing developing countries’ climate change needs by mobilizing resources on a large scale from official funds that could also be used to leverage private financing


7 Sector Focus

8 Technology Focus


grants or concessional loans



12







December 2011


Proposed in 2010, the IMF could raise finances from multiple sources on a scale envisioned by the Copenhagen Accord ($100 billion a year by 2020).




http://www.imf.org/external/pubs/ft/survey/so/2010/POL032510A.htm


Equity Capital. The Green Fund would use an initial capital injection by developed countries in the form of reserve assets, which could include Special Drawing Rights (SDRs)—reserve assets created by the IMF. Contributors could agree to scale their equity stakes in proportion to their IMF quota shares, making these the “key” for burden sharing among the contributing countries. • Bond issuance. Once its capital base is established, the Green Fund could begin issuing highly-rated (and hence, low-cost) “green bonds” that could be sold to private investors as well as official holders—including, for instance, sovereign wealth funds. • How it would work. The Green Fund would combine the proceeds from the bonds with subsidy resources (see below) and use these combined resources to provide grants for adaptation and loans for mitigation to developing countries (on concessional terms for low-income countries). • Delivery. Resources mobilized by the Green Fund could be channeled to developing countries through existing climate funds, or via newly created special-purpose disbursement facilities.


December 2011

INDONESIA CLIMATE CHANGE TRUST FUND


1 Name of Financing Source Indonesia Climate Change Trust Fund

2 Sponsoring Organization United Kingdom, Australia, Sweden

3 Address

ICCTF SECRETARIAT Wisma Bakrie 2, 6th Floor Jl. H.R. Rasuna Said Kav. B-2 Jakarta 12920 - Indonesia


[email protected] http://www.icctf.or.id

5 Objectives

The Indonesia Climate Change Trust Fund has two main objectives:

1. To achieve Indonesia’s goals of a low carbon economy with greater resilience in the face of the impact of climate change dynamics.

2. To establish innovative ways to link international financial sources with national investment strategies, and simultaneously, to become a showcase of alternative financing for climate change mitigation and adaptation programs managed by government, in a transparent and accountable manner.

6 Region/Country Focus Indonesia

7 Sector Focus Mitigation, Mitigation- REDD, Energy Efficiency



Grants


All investment decisions of the ICCTF shall be made by a Steering Committee consisting of representatives from the National Development Planning Agency (BAPPENAS); the Ministry of Finance; the National Council for Climate Change; and development partners (donors). Two members of the civil society are invited to attend Steering


December 2011

Committee meetings as non-voting members. A Technical Committee, represented by relevant GOI line ministries, BAPPENAS, Ministry of Finance and development partners will support the Steering Committee on selection and evaluation of proposals and activities. A Secretariat is established to manage the day-to-day operations of the Fund, to provide technical, administrative and logistical support to both the Steering Committee and the Technical Committee, and provide capacity building and technical assistance to line ministries and local governments implementing ICCTF-financed initiatives.


12


ICCTF will be focusing on 3 priority windows: 1. Energy and energy efficiency ICCTF aims to contribute to the improvement of energy security in Indonesia and reduction of emissions from the energy sector. 2. Sustainable forestry and peat land management Seeking to address the challenges related to the high levels of GHG emissions from the forest and peat land sectors, ICCTF aims to contribute to Indonesia’s efforts to reduce deforestation and forest degradation while advancing efforts toward the sustainable management of peat lands and national forest resources. 3. Resilience ICCTF aims to anticipate the negative impacts of climate change and deal with the risks and uncertainties of climate disruption to ensure Indonesia’s progress along a path to sustainable development and balanced economic growth and having simultaneous efforts to reduce vulnerability and enhance societal resilience in the most vulnerable sectors.



In addition to standard project selection criteria such as impacts, sustainability, scalability and synergy, the capacity and experience required to conduct large and innovative projects in a short time frame, and whether the projects were high priority for the Ministries were also considered.


December 2011

Proposals from Steering Committee member institutions were omitted to prevent conflict of interest.


As the first step Sectoral ministries and local governmental bodies will be invited to submit proposals for activities eligible for financing by the ICCTF. Sector ministries may either submit their own proposals, or partner with other parties such as NGOs or academic institutions.


Disbursement of the fund: • In accordance with the payment terms, the

Contractor or the implementation team can submit a payment request to the Trustee with a copy to the Secretariat.

• Payment requests will be checked by the Trustee and confirmed with the Project Manager of the Coordination Team.

• Once the Project Manager approves it, the Trustee can disburse the fund to the Contractor with a copy of disbursement proof to be sent to the Secretariat.

Three forms of auditing the funds disbursed are proposed:

Annual ‘policy compliance ‘audit. The ICCTF Steering Committee will be held accountable for ensuring that external grants are allocated according to the grant agreements with development partners. An ‘independent’ auditor, paid for by the ICCTF, will conduct an annual ‘policy compliance’ audit.

ICCTF service providers. The same independent auditor will audit the performance of the ICCTF Trustee, based on contracts with the Ministry of Finance.

Recipients of ICCTF grants. An independent auditor will audit the use of ICCTF funds by ICCTF recipients. The recipient ministries will be fully responsible for ensuring compliance with prevailing regulations on the use of public funds.


December 2011


Total budget plan for PREP- ICCTF USD 5.4 million


The first batch of projects was solicited through two calls for proposals announced in December 2009. Since these projects would be funded through UNDP acting as the interim fund manager, eligible project duration was set to one year, while project budgets were capped at 3 million USD. For good projects which exceeded these limits, certain activities were taken out and project durations shortened, under mutual agreement with project proponents.


In general, monitoring and evaluation practices explore six criteria that are applicable to projects, programs, and themes but that do not all need to be systematically reviewed in all cases. The six specific monitoring and evaluation criteria (efficiency, effectiveness, impact, transparency, relevance and sustainability) used in combination provide all the stakeholders with essential information in connection with present and future decisions on projects and programs.


http://www.icctf.or.id/ http://www.climatefundsupdate.org/listing/icctf



December 2011

MEDITERRANEAN INVESTMENT FACILITY (MIF)


1 Name of Financing Source Mediterranean Investment Facility (MIF)

2 Sponsoring Organization The Mediterranean Investment Facility (MIF), is a joint initiative under UNEP and the Italian Ministry for Environment Land and Sea (IMELS)

3 Address


[email protected]

5 Objectives

Aims at developing a vibrant, sustainable renewable energy market system in the greater Mediterranean and Balkan regions, removing project, policy and trade barriers and strengthening the market system, thereby contributing to poverty alleviation through the provision of modern energy services to populations and to climate change mitigation.

6 Region/Country Focus Mediterranean region

7 Sector Focus renewable energy and energy efficiency projects

8 Technology Focus Solar Water Heating (SWH) systems, CFLs and other efficient end-user energy solutions


End-user payment , Grant , In-kind the MIF implements a range of financial support mechanisms and policy enhancements, including:

• Financing incentives, such as an interest rate buy-down for solar home system financing;

• Guarantee facility to secure commercial loans and lower interest rates;

• Investment Advisory Facility-type support that helps banks or other financial institutions evaluate small- and medium-scale investments;

• Guidance on creating specialized credit facilities, clean energy funds, and investment vehicles; and


December 2011

• Bank loan officer training and end-user awareness-raising campaigns.


The MIF is a cooperative effort under the direction of the following authorities:

Ministry Of Environment, Land And Sea of the Republic of Italy (IMELS)

United Nations Environment Programme (UNEP)

Global Environment Facility (GEF)

New and Renewable Energy Authority in Egypt (NREA)

Moroccan Ministry for Energy, Mines, Water And Environment

National Office Of Electricity of Morocco (ONE)

Moroccan National Agency for Renewable Energy and Energy Efficiency (ADEREE)

Montenegrin Ministry of Economy (ME/SEE)

Macedonian Ministry of Environment and Physical Planning


12


The MIF finances renewable energy and energy efficiency projects and in addition, the MIF also engages in policy enhancements.





No information


Total amount $10.2 million


December 2011


No information


No information


MIF homepage http://www.climatefinanceoptions.org/cfo/node/282



December 2011

NORDIC DEVELOPMENT FUND


1 Name of Financing Source Nordic Development Fund

2 Sponsoring Organization Denmark, Finland, Iceland, Norway and Sweden

3 Address

NORDIC DEVELOPMENT FUND P.O. Box 185 FIN-00171 Helsinki Finland


Helge Semb, Managing Director [email protected]

5 Objectives The objective of the Nordic Development Fund's (NDF) operations is to facilitate climate change investments in low-income countries.


Countries where NDF can support projects Africa Benin, Burkina Faso, Cape Verde, Ethiopia, Ghana, Kenya, Malawi, Mozambique, Rwanda, Senegal, Tanzania, Uganda, Zambia, Zimbabwe Asia Bangladesh, Cambodia, Kyrgyz Republic, Lao PDR, Maldives, Mongolia, Nepal, Pakistan, Sri Lanka, Vietnam Latin America Bolivia, Honduras, Nicaragua

7 Sector Focus climate change and poverty reduction



Grants by Co-Financing


NDF is a multilateral development finance institution, governed by an Agreement and Statutes signed in 1988 between its five Nordic member countries–Denmark, Finland, Iceland, Norway and Sweden. Furthermore, NDF has signed a headquarters agreement with the Government of Finland. The Fund’s Board of Directors makes all grant decisions, while the Control Committee oversees that the


December 2011

operations are conducted in accordance with the Statutes. NDF’s Managing Director is responsible for the conduct of the day-to-day operations. NDF’s headquarters are in Helsinki, Finland, in the same building complex as the Nordic Investment Bank (NIB), the Nordic Environment Finance Corporation (NEFCO) and the Nordic Project Fund (Nopef). NIB provides support to NDF regarding office premises, staff administration, IT services, accounting, liquidity management and legal assistance.


Projects are normally identified by governments in partner countries according to national priorities. NDF also has a strong working relationship with the World Bank, Asian Development Bank, Inter-American Development Bank, African Development Bank and Nordic bilateral development organisations, and projects are often identified through these partnerships. In addition, NDF aims at obtaining project information and ideas trough Nordic firms, organisations and networks.

12


Eligible areas for NDF grant financing include climate change mitigation and adaptation activities. NDF grants are provided mainly for technical assistance, i.e. consulting services, and for investments, i.e. goods, works, services, and for other applicable expenses in connection with technical assistance. NDF only finances projects in low-income countries. As NDF is a co-financing institution NDF grants normally constitute a part of the whole project or programme financing. The NDF-financed component of the co-financed project or programme should be in line with NDF’s mandate and eligibility criteria


NDF supports projects in low-income countries which

• are eligible for support from IDA (less than USD 1,165 per capita income in 2011), and

• have previously received NDF support Generally both these criteria should be fulfilled. Under certain conditions, NDF may also provide assistance to other low-income countries on a case by case basis.


December 2011


Same as eligibility criteria above.


The Nordic Climate Facility (NCF) has launched the Third Call for Proposals on “Innovative low-cost climate solutions with a focus on local business development" in eligible developing countries. The deadline for submitting proposals is 16 January 2012.


NDF grants are made in cooperation with bilateral and multilateral development institutions. All grant decisions are made by NDF’s Board of Directors. The decisions are prepared by NDF’s administration.


NDF has financed 190 development assistance credits valued at EUR 1 billion


The grant amounts vary depending on the scope of the project or programme. Grant amounts may amount from EUR 500,000 to EUR 4 million.



http://www.ndf.fi/



December 2011

PILOT PROGRAM FOR CLIMATE RESILIENCE (PPCR)


1 Name of Financing Source Pilot Program for Climate Resilience (PPCR)

2 Sponsoring Organization Operational under the Strategic Climate Fund (SCF), within the Climate Investment Funds (CIF)

3 Address



[email protected]

5 Objectives

• Pilot and demonstrate approaches for integration of climate risk and resilience into development policies and planning;

• Strengthen capacities at the national level to integrate climate resilience into development planning;

• Scale-up and leverage climate resilient investment, building on other ongoing initiatives;

• Enable learning-by-doing and sharing of lessons at country, regional and global levels.


Country programmes- Bangladesh, Bolivia,Cambodia, Kingdom of Mozambique, Republic of Nepal, Niger, Republic of Tajikistan, Republic of Yemen, Zambia; Regional Programmes –1. Caribbean Dominica, Grenada, Haiti, Jamaica, Saint Lucia, Saint Vincent and the Grenadines 2. Pacific Papua New Guinea, Samoa, Tonga

7 Sector Focus Climate Resilience


9 Type of Funding Support The money is split 50-50 between loans and grants. The loans are optional; a country can simply take


December 2011

(e.g., loans, grants, etc.) the grant component and not the loan component.


Decision-making is by consensus by the governing board. The PPCR Sub-Committee was established to oversee the operations and activities of the PPCR.


12


Adaptation, Agriculture , Climate-Resilient , Coastal Zone Management , Energy , Forestry , Infrastructures , Low-Carbon , Populations & Human Settlements , Sustainable Land Management , Water.

Under the PPCR two types of investments are supported:

1) Funding for technical assistance to enable developing countries to build upon existing national work to integrate climate resilience into national and sectoral development plans.

2) Funding public and private sector investments indentified in national or sectoral development plans or strategies addressing climate resilience.


Acknowledging the special needs in relation to funding and technology transfer described in Article 4.8 and 4.9 of the UNFCCC, country eligibility will be based on: (a) ODA-eligibility (according to OECD/DAC guidelines) (b) An active MDB country program. Priority will be given to highly vulnerable Least Developed Countries eligible for MDB concessional funds, including the Small Island Developing States.

14

Proposal Evaluation Criteria

The pilot programs implemented under the PPCR should be:

country led;

build on National Adaptation Programs of Action (NAPAs) and other relevant country studies and strategies;

complement the existing adaptation funding and be supportive of the emerging operations of


December 2011

the Adaptation Fund; and

support actions that are both an outcome of a comprehensive planning process and consistent with the countries' development and poverty reduction goals.

Immediate outcomes of a PPCR program should include: • An increased capacity to integrate climate resilience into country development strategies • A more inclusive approach to climate resilient growth and development; • An increased awareness of the potential impact of climate change; • Scaled-up investment for broader interventions and programming related to climate resilience; and • Improved coordination among stakeholders regarding country-specific climate resilient programs.



The CIF are channeled through the African Development Bank, Asian Development Bank, European Bank for Reconstruction and Development, Inter-American Development Bank, and World Bank Group.


Total USD 1 billion


No information



http://www.climateinvestmentfunds.org/cif/ppcr

http://www.climatefundsupdate.org/listing/pilot-program-for-climate-resilience



December 2011

RENEWABLE ENERGY AND ENERGY EFFICIENCY PARTNERSHIP (REEEP)


1 Name of Financing Source Renewable Energy and Energy Efficiency Partnership (REEEP)

2 Sponsoring Organization REEEP is comprised of more than 350 partners including 45 governments as well as a range of private companies and international organizations

3 Address

REEEP International Secretariat, Vienna International Centre Room D2169, Wagramerstrasse 5, A – 1400 Vienna, Austria

4 Key Contact (Name & e-Mail) Katrin Harvey, Phone: +43 1 26026 3425, [email protected]

5 Mission

Facilitate the transformation of energy systems by accelerating the uptake of renewables and energy efficiency technology, to reduce carbon emissions, increase energy security, and improve access to sustainable energy for the poor worldwide.

6 Objectives

Develop the market for sustainable energy by:

• Assisting governments in creating favorable regulatory and policy frameworks

• Promoting innovative finance and business models to activate the private sector


Global (with a network of Regional Secretariats).

Current focus is on Brazil, China, India, Indonesia and South Africa; as well as a small number of projects in Sub-Saharan Africa

8 Technology Focus All RE and EE technologies

9 Sector Focus N/A

10 Financing Mechanisms Grants

11 Key Characteristics Uses competitive bidding process to select projects on an annual cycle.

12 Management/Governance Managed by an International Secretariat with several Regional Secretariats


December 2011

13 Eligibility Criteria Any project that meets the program objectives and is in one of the priority countries

14 Evaluation Criteria Relevance to REEEP objectives; Relevance to donor objectives; Co-funding; Experience; Implementation capacity


Proposals made by governments, regulators and development financial institutions (DFIs) all follow a one-stage process, with a single submission deadline

All others follow a two-stage bidding process. Applicants are first are asked to make preliminary concept submissions. A shortlist is drawn up, and those who are successful are then asked to submit full, detailed proposals.

Proposals need to define project profile, planned work, details of expertise, project impact, organization information, potential risks and the project budget.

16 Annual or Total Funding €4.5 million in current funding cycle.

Maximum €150,000 per project.

17 Reporting Requirements Financial and technical progress reports (Quarterly)

Final Report


Project Evaluation Report is commissioned by REEEP international secretariat upon project completion

19 Reports/Publications Annual report and many other reports (Available on the REEEP web site)

20 Web Site http://www.reeep.org/31/home.htm

21 Additional Comments Currently in 8th Program Cycle


December 2011

SCALING-UP RENEWABLE ENERGY PROGRAM FOR LOW-INCOME COUNTRIES (SREP)


1 Name of Financing Source Scaling-Up Renewable Energy Program for Low-Income Countries (SREP)

2 Sponsoring Organization Strategic Climate Fund The World Bank

3 Address 1818 H Street, N.W. Mailstop: MC 5-512 Washington, DC 20433 USA


World Bank Group Climate Investment Funds, Admin Unit [email protected]

5 Objectives

Serve as a model in assisting low income countries to foster a transformational change to low carbon pathways by exploiting renewable energy potential

Overcome economic and non-economic barriers to scale up private sector investments to achieve SREP objectives

Highlight economic, social and environmental co-benefits of RE programs

Enable blended financing from multiple sources to enable scaling up of RE programs

Facilitate knowledge sharing and exchange of international experience and lessons

6 Region/Country Focus SREP pilot countries: Ethiopia, Honduras, Kenya, Maldives, Mali, Nepal.

7 Sector Focus

Renewable Energy projects like wind and solar projects, small hydro and biomass, and geothermal. The program will also consider cooking and heating projects like sustainable forests, biogas, and other renewable-based fuels.

8 Technology Focus Low carbon technologies

9 Type of Funding Support Co-financing , Equity , Grant , Loan


December 2011

(e.g., loans, grants, etc.)


The SCF Trust Fund Committee will establish a sub-committee to approve programming priorities, operational criteria and financing modalities for the SREP, as well as financing for programs and projects. The Sub-Committee will be comprised of up to six representatives from donor countries to the SREP identified through a consultation among such donors and a matching number of representatives from SREP recipient countries. Decision-making would be by consensus. The subcommittee of the SREP may invite ad hoc technical experts to advise the sub-committee on issues such as project selection, guidelines, etc.


12


SREP offers grant financing, blended with IDA and other concessional financing. Range of financial instruments include:

1. Output-based aid to increase the affordability of provision of renewable energy services by buying down a portion of the capital cost of the investment.

2. Investment financing using quasi-equity financing, capital cost buy-down or other financial instruments.

3. Credit enhancement facilities that will leverage trade finance and short-term working capital finance to renewable energy suppliers, among others.

4. Financial intermediation grants 5. Incremental budget support for national/regional

programs for delivering community services.


Country selection criteria: Low income countries that are eligible for MDB concessional financing (i.e., IDA or its regional development bank’s equivalent) would receive priority in selecting pilot countries (or regions) to access SREP resources. Objective criteria to guide the selection of priority countries would need to be developed, and could take into account the


December 2011

following: a) Transparent assessment of need, as determined by high dependence on conventional fuels for electricity generation, low electricity access, and/or high dependence on traditional use of biomass for thermal applications. b) Country’s stated interest to take a programmatic approach to large scale renewable energy development that could guide the country towards a low carbon development pathway in the energy sector. c) Institutional capacity to undertake a large scale SREP-funded program. d) Country distributions across regions [with a special focus on Sub-Saharan Africa.] e) The renewable energy resource potential in the country.


Eligible new renewable energy applications comprise of:

Grid and off-grid electricity applications including small hydro or biomass-based power, wind and solar powered systems, and geothermal. Financing would be available for renewable electricity generation and use, and for transmission and distribution grids needed to evacuate/use renewable electricity;

Cooking and heating applications including sustainable community forests, improved cook stoves, geothermal heating, and biogas or other renewable-based fuels.

Preference will be given to projects with strong poverty alleviation benefits, through increased economic growth, enhanced generation capacity or improved services to poorer communities that have limited or no access to modern energy to meet household, community service and productive use needs. Economic and/or social development as well as environmental benefits will be key criteria for project selection. Proposals for SREP co-financing will need to demonstrate how they scale-up from lessons learned in pilot and demonstration projects and


December 2011

programs (such as those supported by the GEF). A key criterion will be the potential of the proposal for demonstration and replication, particularly the potential for removing barriers in the enabling environment beyond the immediate project boundary so as to facilitate scaling up through private sector investments.

15 When and How to Apply No Information


No Information


Total USD 318 million


No Information


No Information


http://www.climateinvestmentfunds.org/cif/srep http://www.climatefinanceoptions.org/cfo/node/145 SREP Programming Modalities and Operational Guidelines SREP Financing Modalities Proposal for the Allocation of resources of the SREP pilots

21 Additional Comments SREP is currently fully subscribed; new funding will be announced in the near future.


December 2011

SPECIAL CLIMATE CHANGE FUND (SCCF)


1 Name of Financing Source Special Climate Change Fund (SCCF)

2 Sponsoring Organization UN Organizations, Multilateral banks

3 Address GEF Secretariat 1818 H Street , NW, MSN G6-602 Washington, DC 20433, U.S.A.


Ms. Bonizella Biagini GEF Program Manager [email protected]

5 Objectives

To support technology transfer projects and programs that:

are country-driven, cost-effective and integrated into national sustainable development and poverty-reduction strategies; and,

take into account national communications or NAPAs and other relevant studies and information provided by the Party

6 Region/Country Focus Asia-Pacific, Africa, South and Central America, Small Island Developing States, Least Developed Countries.

7 Sector Focus

Adaptation projects in the following areas:

Agriculture, coastal zone management, disaster risk reduction, human health, infrastructure, land management, natural resource management, and water resources management.


9 Type of Funding Support (e.g., loans, grants, etc.) Grant


The SCCF is governed by the Global Environmental Facility and therefore is implemented only after the approval of the GEF Council and subsequent endorsement by the GEF CEO. During the project approval process, the Scientific and Technical Advisory Panel (STAP) also advises the GEF bodies and reviews the PIF once it is included in the work program


December 2011


The projects must have additional sources of co-financing (or a plan for obtaining said funding), as the SCCF grants do not completely fund projects but should act to catalyze other sources of financing. SCCF projects must address impacts of climate change on a vulnerable socio-economic sector that are above and beyond the development baseline - which does not include improved public or education, for example. The proposed activities should also achieve integration of climate change risk reduction strategies, policies, and practices into specific sectors or include institutional and constituency capacity building and awareness raising components.

12


Activities supported include atleast two of the following: integration of climate change risk reduction strategies, policies, and practices into specific sectors; implementation of adaptation measures; institutional and constituency capacity building, and awareness rising.

13 Eligibility Criteria Non-Annex I countries with focus on Africa, Asia and small island states.


Project idea and additional cost argument

Implementation setup

Indicative budget and co-financing

Letters of endorsement for all co-financing

Monitoring and Evaluation Framework


The SCCF Project Proponent develops a concept for a project and requests assistance from an Implementing Agency of the GEF.

The SCCF Project Proponent secures the endorsement of the national GEF Operational Focal Point.

Projects over USD 1 million are referred to as Full-sized Projects (FSP); those of USD 1 million or below are referred to as Medium-sized Projects (MSP.) MSPs follow a further


December 2011

streamlined project cycle, compared to FSPs.

For FSPs, submission to the GEF under the SCCF starts with a Project Identification Form (PIF), followed by a CEO Endorsement Form.

MSPs may start with the CEO Endorsement Form. Once the GEF CEO Endorses the project, the funding is released to the Implementing Agency


A Project Identification Form (PIF) is completed and submitted to the GEF Secretariat for approval. Once a PIF is then cleared by the GEF Council, a project preparation grant is awarded to the proponent in order to being the first phases of readying the adaptation intervention.

17 Size of the Funding source (Annual or Total) Total amount USD 110 million



● A clear description of the process and a timetable for the M&E process. ● A project strategic results framework identifying clear impact indicators, as well as baseline and target values, for each of the project’s outcomes and outputs.


• Webpage on the Special Climate Change Fund

• GEF project database • GEF webpage on climate change • UNFCC webpage on SCCF • UNFCC webpage on NAPAs • UNDP database on SCCF projects



December 2011

SEED CAPITAL ASSISTANCE FACILITY (SCAF)


1 Name of Financing Source Seed Capital Assistance Facility (SCAF)

2 Sponsoring Organization GEF and United Nations Foundation

3 Address

Global Environment Facility Climate Change Mitigation 1818 H Street NW Washington DC 20433


Eric Usher UNEP [email protected]

5 Objectives To help energy investment funds provide seed financing to early stage clean energy enterprises and projects.

6 Region/Country Focus GEF eligible countries in Asia or Africa.

7 Sector Focus Clean Energy enterprise development

8 Technology Focus

In Least Developed Countries most technologies will be eligible, other than those included in the all-country negative list below. In other emerging market countries only the ‘second wave’ of technologies will be eligible, not the first wave that today are considered fully commercial. For example wind and hydro generation projects in China and India, or geothermal projects in the Philippines, would not qualify for SCAF support. Technologies ineligible for support in all countries:

• Landfill methane • Bio-fuels projects, unless they can be

clearly shown to meet sustainability criteria (non-food crop with minimal impact on food security, biodiversity impacts, etc)

• Vehicle efficiency (in the transport sector only modal shift and bio-fuel projects that meet condition (b) above are eligible)

• Large hydro (>25 MW)


December 2011

• Nuclear energy


Co-financing , Equity , Grant


The Facility is implemented through the United Nations Environment Programme, the Asian Development Bank and the African Development Bank


The following check-list summarizes all issues that must be addressed within proposals to be considered for support:

• Size of seed investment window, • Form of financing to be used, • Expected areas of technology focus, • Investee company types, • Geographic focus.

Applicants must also explain the overall fund investment strategy

12


Mitigation, Energy , Energy Efficiency , Renewable Energy.

SCAF Support Line 1 - Enterprise Development Support- The first SCAF support line can be used to cost-share some of the elevated costs associated with deal sourcing, providing enterprise development services to and transacting seed scale investments.

SCAF Support Line 2 - Seed Capital Support- The second SCAF support line is designed to help offset the hurdle of higher perceived risks and lower expected returns when dealing with early stage clean energy project and enterprise developments.


Commercial Private Equity or Venture Capital Funds can receive cost-sharing support for including early stage seed capital windows within their broader commercial investment offering.


Cooperating funds will be selected through an open and on-going competitive tendering process based on: • Fund Manager Experience - track record,

performance with previous investment


December 2011

activities and sector expertise; • Proposed Seed Finance Strategy - type of seed

financing proposed, whether this form of financing is needed in the target sectors and countries and the alignment of the activities to be supported with the overall fund investment strategy


There is no required format for proposals submitted to become a SCAF cooperating fund manager. Bidding organisations are required to submit detailed technical and financial proposals explaining how enterprise development services will be offered and how a seed window will be created within an existing or planned clean energy fund.


The contractual agreement will involve annual disbursements to pay for enterprise development activities (reviewed and approved on an annual basis), as well as individual disbursements for each project seed financed by the cooperating fund (screened on a case by case basis). The fund manager will be obliged to meet an investment schedule (i.e., the enterprise development support must lead to subsequent investments from the seed finance window) failing which they will be obliged to repay a share of the enterprise development support provided.


Total $10.47 million




Seed Capital Assistance Facility homepage; http://scaf-energy.org/


Projects that have received prior support through the GEF or ones that are intended to reap financial benefits through the CDM or JI will not be considered eligible for SCAF funding.


December 2011


December 2011

UNDP/SPAIN MDG ACHIEVEMENT FUND


1 Name of Financing Source UNDP/Spain MDG Achievement Fund

2 Sponsoring Organization Spanish Government support of €528 million Euros ($US710M) to the United Nations system.

3 Address MDG-F Secretariat UNDP, DC1-1962 1 UN Plaza, New York, NY 10017, USA


Ms. Sophie de Caen Director [email protected]

5 Objectives

1. Supporting policies and programs that promise significant and measurable impact on select MDGs;

2. Financing the testing and scaling-up of successful pilot programs;

3. Catalyzing innovations in development practice; and

4. Adopting mechanisms that improve the quality of financing aid.

6 Region/Country Focus 50 countries from Africa, Asia Latin America and the Caribbean, Arab States and Eastern Europe

7 Sector Focus Environment and Climate Change



Grant , ODA


The Steering Committee decides to invest resources in thematic windows. For each thematic window, Terms of Reference, along with the operating principles as well as a framework for evaluating progress and impact are prepared by experts in the given field and approved by the Steering Committee.

Implementation is often done in partnership with or entirely through local parties, although any activity must be endorsed by the national government


December 2011

counterpart.


Project Concept Note, which is formulated into a Joint Programme.

12


The MDG Achievement Fund supports activities in the following areas:

Mainstreaming environmental issues in national and sub-national policy, planning and investment frameworks

Improving local management of resources and service delivery

Expanding access to environmental finance

13 Eligibility Criteria The Spanish Master Plan for International Cooperation 2005-2008


Programmes are formulated at the country level to address national MDG and related development priorities, that form part of the United Nations Development Assistance Framework (UNDAF), the common strategic framework that guides operational activities of the United Nations system at the country level.


In response to the Fund request for proposals, UN country offices submit a project concept note, assessed by the responsible UN agency (the “Convenor”) and a technical subcommittee consisting of representatives from FAO, UNDP and the World Bank as well as five independent experts plus two experts nominated by Spain.

The concept notes are rated and submitted for approval to the MDG-F Steering Committee via the MDG-F Secretariat. Once approved, the concept note is then formulated into a joint program through a consultative process.


Funds are released on an annual basis through the Multi-Donor Trust Fund to the UN Organizations that participate in the joint programs


90 million USD in climate change thematic window


None mentioned

19 Monitoring & Evaluation The main elements of M&E strategy consist of:


December 2011

Procedures • Joint programme biannual monitoring reports that provide information against a set of indicators relevant to specific programme areas, collaborative “ONE UN” efforts and on development effectiveness as seen in the Paris Declaration.

• Mid-term (formative) evaluations of all 128 joint programmes which aim to improve programmes during their implementation period.

• Final Evaluation upon completion of each of the (128) JP, which assesses the final performance of the Programme.

• 9 country evaluations consisting of an in depth and detailed evaluation exercise, using a participatory case study methodology focusing on MDGs advances, One UN efforts and the implementation of the Paris Declaration Principles at country level.

• 8 Meta-evaluations, 1 for thematic area and • An evaluation of the MDG-F as cooperation

for development instrument.


UNDP/Spain MDG Achievement Fund homepage MDG Achievement Fund - UNFCCC page http://www.climatefinanceoptions.org/cfo/node/59



December 2011

A.3 CARBON FUNDS


December 2011

ADB ASIA PACIFIC CARBON FUND (APCF) AND FUTURE CARBON FUND (FCF)


1 Name of Financing Source ADB Asia Pacific Carbon Fund (APCF) and Future Carbon Fund (FCF)


3 Address 6 ADB Avenue, Mandaluyong City 1550 Metro Manila, Philippines


Director Sustainable Infrastructure Division Regional and Sustainable Development DepartmentAsian Development Bank [email protected] http://adb-apcf.org

5 Objectives

The Asia Pacific Carbon Fund (APCF) and Future Carbon Fund (FCF) are funds established and managed by ADB that co-finance CDM projects in its DMCs by securing a portion of the expected future certified emission reductions (CERs) from CDM-eligible projects in exchange for upfront finance. APCF purchases CERs up to 2012 when the first commitment period of the KP ends, while FCF purchases CERs beyond 2012 up to 2020.

Both APCF and FCF operate under Carbon Market Program (CMP) as an element that provides upfront carbon financing.

6 Region/Country Focus Developing Member Countries (DMCs)

7 Sector Focus Energy efficiency, renewable energy, and methane capture and utilization



Co finance

10 Management/Governance ADB Board of Directors


In addition to the application form, There will be less additional documentation required for project appraisal as existing project documents such as feasibility studies, detailed design and other project preparation reports previously submitted to the


December 2011

ADB operations departments shall be utilized.

12


The CMP will lend support to renewable energy, energy efficiency, and other GHG mitigation projects in ADB's DMCs where ADB provides other investment support such as loans or guarantees

13 Eligibility Criteria Developing countries in Asia and the Pacific that are eligible under the Clean Development Mechanism (CDM) of the Kyoto Protocol (KP)


Project selection criteria: • Has access to ADB support in the form of

debt, equity or guarantee, and/or technical support from CMP's Technical Support Facility;

• Complies with ADB operational policies and procedures;

• Located in a DMC that is a CDM-eligible country;

• Validated (or is likely to be validated for FCF) as a CDM project;

• Generates permanent (not temporary) GHG reductions


The CMI application process is relatively simple. Applications to CMI are made by filling out an application form detailing the type of project they wish to seek assistance for and the specific assistance they require. Project sponsors who wish to qualify for the CMI should liaise with the ADB staff from the relevant regional or private sector operations department. The project sponsor and concerned ADB staff will jointly fill out the CMI application form which may be requested from the CMI team, Sustainable Infrastructure Division of the Regional and Sustainable Development Department.


APCF/FCF Upfront Payment. The APCF and/or FCF will release cofinancing payments to the project when they are satisfied that conditions have been met under the CERPA and in accordance with


December 2011

the terms of the agreement. CER Issuance and Transfer to Participants. CERs issued for each CDM project in which APCF and/or FCF has participated will be put, at first instance, into an APCF and/or FCF account. The APCF and/or FCF will subsequently transfer the CERs into the national registry accounts of the fund participants. APCF/FCF Payment Upon Delivery. In selected cases where payment on-delivery structure forms part of the transaction, payment is made upon receipt of CERs into relevant registry accounts.


Fund size of APCF- $151.8 million Fund size of FCF - $115 million


APCF: Upfront financing of Up to 50% of expected CER volume. CER pricing is subject to individual negotiations between APCF and project sponsors and is determined by a range of criteria, including independent pricing assessments, advanced payment structures, and project-specific risks. FCF Upfront financing of up to 75% of expected CER volume. CER pricing is based on a band or range determined by at least three independent pricing agents. The recommended band is based on a pay-on-delivery scheme and on a framework that includes the risks and uncertainties related to post-2012 carbon markets. It is approved by the Board and updated quarterly


Monitoring: Project sponsors will be required to provide regular reports to the APCF and/or FCF on the performance of each CDM project. The APCF and/or FCF will perform the role of "focal point" between the projects and the CDM Executive Board

20 Sources for Further Information http://adb-apcf.org



December 2011


December 2011

ADB CARBON MARKET INITIATIVE (CMI)


1 Name of Financing Source ADB Carbon Market Initiative (CMI)



4 Key Contact (Name & e-Mail)

Director, Energy, Transport, and Water Division Regional and Sustainable Development [email protected]

5 Objectives The main aim of CMI is to help developing member countries (DMCs) benefit from market-based instruments under the Kyoto Protocol to promote sustainable development, the principle at the base of Agenda 21.

6 Region/Country Focus DMCs


8 Sector Focus • Renewable energy • Energy efficiency • Methane capture and utilization

9 Financing Mechanisms Carbon finance , Co-financing , Technical assistance

10 Key Characteristics 1. Upfront carbon financing through the Asian Pacific Carbon Fund (APCF) for carbon credits up to 2012.

2. Upfront carbon financing through the Future Carbon Fund (FCF) for carbon credits beyond 2012 up to 2020.

3. Technical Clean Development Mechanism (CDM) support through the Technical Support Facility .

4. Marketing support for carbon credits through the Credit Marketing Facility (CMF).

11 Management/Governance Fund Board of Directors approves the terms and conditions of each Certified Emission Reduction Purchase Agreement (CERPA) to be executed by the Trustee, on behalf of the Fund.

As the Trustee, the ADB selects suitable projects.


December 2011

12 Qualifying Projects/Programs

Mitigation, Energy , Energy Efficiency , Fugitive Methane , Low-Carbon , Renewable Energy , Waste Management

13 Eligibility Criteria DMC

14 Proposal Evaluation Criteria Has access to ADB support in the form of debt, equity or guarantee, or technical support from CMI’s Technical Support Facility; • Complies with ADB operational policies and procedures; • Located in a DMC that is a CDM-eligible country according to the Kyoto Protocol; • Validated as a CDM project by a designated operational entity; • Generates permanent and not temporary GHG reductions.


Cofinancing payments are released by APCF to the project only when the former is satisfied with any condition precedent to Emission Reduction Purchase Agreement (ERPA) and in accordance with the terms of these agreements.

16 Annual or Total Funding Total USD 152 million (Asia Pacific Carbon Fund), USD 115 million (Future Carbon Fund)

17 Reporting Requirements


Project sponsors will be required to provide regular reports to the APCF on the performance of each CDM project. The APCF will perform the role of “focal point” between the projects and the CDM Executive Board.

19 Reports/Publications



December 2011

AFDB AFRICAN CARBON SUPPORT PROGRAM (ACSP)


1 Name of Financing Source AfDB African Carbon Support Program (ACSP)


African Development Bank The Africa Carbon Support Program has benefited from a grant of US$ 1 million from the Fund for African Private Sector Assistance (FAPA) which was established by the African Development Bank in partnership with the Japanese government.

3 Address 15 Avenue du Ghana P.O.Box 323-1002 Tunis-Belvedère, Tunisia


Duru Uche Energy, Environment and Climate Change Department African Development Bank [email protected] [email protected]

5 Objectives

key objectives of the program: • To assist in the development of appropriate

project preparation documentations including Project Information Notes (PIN) and Project Design Documents (PDD) which are requirements under the Clean Development Mechanism. This support would help to lower the transactional costs faced by project developers in realizing carbon credits for their projects.

• To support the development of regional grid emission factor(s). This has been a crucial element for projects in the power sector and will allow projects in countries with low emission factors to benefit from the fact that their project will feed into wider regional grids which have cumulative high emission factors.

• To support project owners to successfully


December 2011

commercialize the carbon potential of projects. This will ensure that the project owners are in a position to determine the optimum proposal for purchase of their project’s carbon credits. Equally important, this component will also aim to ensure that the project owners can successfully monitor and report the emission reductions resulting from their respective CDM projects.

6 Region/Country Focus Least Developed Countries in Africa

7 Sector Focus Carbon funding, climate change, Clean Development Mechanism



Technical assistance




12


The ACSP is assisting project owners in securing funds to cover transactions costs from potential carbon credits buyers and other instruments and hire a qualified consultant for project design development and validation, quality control and registration. These projects are expected to be registered before the end of December 2012.

13 Eligibility Criteria Carbon finance eligible projects



The ACSP plans to continue screening projects mainly from least developed countries (LDC) for their CDM potential as they arise in 2012 and to initiate CDM capacity building and technical assistance programs in select regional member countries.




December 2011





http://www.afdb.org/en/topics-and-sectors/initiatives-partnerships/african-carbon-support-program/


In 2012, the ACSP is moving forward with four projects it has selected from AfDB’s portfolio to receive advance CDM project cycle support. They are an Ethiopia-Kenya hydro power interconnection project, the Itezhi Tezhi hydro power project in Zambia, a project to develop cable propelled cars in Lagos, Nigeria and the Ouarzazate concentrated solar power project in Morocco.


December 2011

AFRICAN CARBON ASSET DEVELOPMENT FACILITY (ACAD)


1 Name of Financing Source African Carbon Asset Development Facility (ACAD)

2 Sponsoring Organization ACAD was formed by UNEP in cooperation with Standard Bank. It is funded by the German Federal Environment Ministry.

3 Address UNEP DTIE 15 rue de Milan 75441 Paris Cedex 09 France


Mr. James Vener UNEP-DTIE [email protected] [email protected]

5 Objectives

The African Carbon Asset Development (ACAD) Facility is designed to help overcome barriers currently prohibiting the African finance sector from playing a major role in the African carbon market. Taking a new approach towards African capacity and market development, ACAD is sharing costs and risks with regional banks in realising and replicating projects.

6 Region/Country Focus Sub-Saharan Africa

7 Sector Focus Mitigation, Energy , Energy Efficiency , Fuel Switching, Low-Carbon, Renewable Energy, Waste Management

8 Technology Focus innovative technologies for biomass, cook stoves, and renewable energy


Carbon finance , Grant , Loan , Technical assistance


This project is part of the International Climate Initiative. The Federal Ministry for the Environment, Nature Conservation and Nuclear Safety (BMU) supports this initiative on the basis of a decision adopted by the German Bundestag. The project is a public-private partnership between BMU, UNEP, and the African financial sector (including Standard Bank).


December 2011

The ACAD Facility falls under the joint supervision of UNEP-DTIE and the UNEP Risø Centre (URC).


Project proponents are encouraged to contact ACAD with the following documentation:

• Draft project documentation (e.g., feasibility reports, CDM project idea note)

• Letters of endorsement or approval from host countries

• Financial models/business plans • Letters of interest from potential investors

12


ACAD offers three complementary Support Lines to stimulate the African carbon market: risk and transaction cost sharing, technical assistance to project developers, and targeted training and outreach for financial institutions.

Support Line #1: Transaction Cost Sharing Targeted grants will be directed through financial institutions to ensure that projects not immediately commercially viable can complete critical steps like environmental impact assessments and project validation. This sharing will complement the project developer’s own contributions.

Support Line #2: Technical Assistance to Project Developers Project clinics and one-on-one technical assistance will help developers tackle key issues that occur throughout the advanced stages of the carbon project development cycle (e.g. proving additionality and preparing a monitoring plan).

Support Line #3: Financial Institution Outreach and Training ACAD will partner with local financial sector players and provide them with training on how to tap into carbon finance opportunities. A number of regional investor outreach and mobilisation activities are planned for 2009-2010. The over-arching goal is to mainstream carbon finance capacity within the African financial sector.

13 Eligibility Criteria Projects must be located in sub-Saharan Africa and eligible for CDM investment.


December 2011


1. Located in sub‐Saharan Africa countries. • No countries a priori excluded from consideration except those sanctioned due to existing conflict or support international terrorism • CDM Designated National Authority (DNA) must exist and be operational in Host Country • Preference shall be given to projects that have already received a Letter of Non‐Objection or Letter of Approval from a Host Country DNA 2. Project shall be developed under CDM and/or Gold Standard VER or VCS protocols. • Projects must adequately address additionality, permanence, leakage, & measurable reductions 3. All project types/methodologies except carbon sink, afforestation & reforestation shall be eligible. • Sustainable biofuel projects shall be oriented toward domestic market consumption and implemented in compliance to internationally accepted, third party sustainable certification protocols and standards, including, but not limited to, the German Government’s “Ordinance on requirements pertaining to sustainable production of bioliquids for electricity production”, the Roundtable on Sustainable Biofuels (RSB) sustainability guidelines, and the International Sustainability and Carbon Certification (ISCC). 4. Demonstrated need for ACAD financial and technical support. 5. Highly relevant and replicable in a Sub‐Saharan African context. • ACAD portfolio shall include diverse technologies and projects shall be innovative or otherwise contribute to capacity building, learning processes, and knowledge/experience development. 6. Preference to projects with high social and other local sustainable development impacts. • Use of appropriate technology, equipment, and locally‐sourced labor/content • Impact on the local environment and local communities shall be taken into account 7. Bankability (i.e., ability of the proposed project to be financed).


December 2011

• Ability for project proponents to secure required capital for project to be implemented • Projects should be able to demonstrate, through letters and emails of investor interest, likelihood to reach financial closure within a 12‐18 month period. • Sufficient risk sharing for asset development costs taken among parties 8. Likelihood of project’s being constructed, commissioned, and generating credits within a 3‐year timeframe. 9. Reasonable amount of credits that could be generated by the project over its lifetime.


Applications may be submitted by project proponents directly, or through an appointed carbon asset developer or financial institution interested in investing in the project.



Total amount $87.1 million


The total amount of financial assistance requested from the ACAD Facility should not exceed USD 100,000 per project. A single project proponent or developer can submit multiple projects for consideration for ACAD Facility support.



ACAD Facility homepage http://www.climatefinanceoptions.org/cfo/node/283


UNEP reserves the right to reject any or all proposals. Additional material beyond what is requested will not be part of the evaluation. Elaborate proposals, lengthy discussions, and non-critical attachments are discouraged. The application evaluation panel may determine that the basic requirements have been met, but that additional information is needed to fully evaluate an application. Information or required details may be sought from the applicant in the form of additional written material or oral presentation that


December 2011

will expand upon the original material presented in the application. UNEP has sole discretion to declare an application non-responsive or request additional information.


December 2011

CARBON FINANCE FOR AGRICULTURE, SILVICULTURE, CONSERVATION, AND ACTION AGAINST DEFORESTATION


1 Name of Financing Source Carbon Finance for Agriculture, Silviculture, Conservation, and Action against Deforestation

2 Sponsoring Organization The Programme's core funding is provided by the Fonds Français pour l'Environnement Mondial (FFEM).

3 Address

United Nations Environment Programme United Nations Avenue, Gigiri PO Box 30552, 00100 Nairobi, Kenya


Françoise D'Estais CASCADe [email protected]

5 Objectives

CASCADe The Programme primarily aims at enhancing expertise to generate African carbon credits in Land-Use Change and Forestry (LULUCF) as well as bioenergy activities.

6 Region/Country Focus CASCADe works with the African pilot countries of Bénin, Cameroon, Dem. Rep. of the Congo, Gabon, Madagascar, Mali, and Sénégal

7 Sector Focus Agroforestry, bioenergy and REDD+ projects aimed at reducing carbon emissions



Carbon finance , Technical assistance


The programme is jointly implemented by UNEP and UNEP Risø Centre, in partnership with the French Agricultural Research for Development (CIRAD), ONF International, ERM and Winrock International. CASCADe’s core funding is provided by the Fonds Français pour l’Environnement Mondial (FFEM).


Case to case

12 Eligible Projects/Programs (whether only for soft items

Capacity building, project development, knowledge management.


December 2011

such as capacity building or policy advice, etc, or also for hard items, such as for plant and equipment) or Organizations


The projects that encourage economic development, conserve biodiversity, strengthen resilience to climate change, and improve life in rural African communities.


15 When and How to Apply Prospective applicants should contact CASCADe focal points directly via their website.


No Information


Total amount €2.3 million


No information


No Information


CASCADe homepage http://www.climatefinanceoptions.org/cfo/node/281



December 2011

EIB-KFW CARBON PROGRAM II


1 Name of Financing Source EIB-KfW Carbon Program II

2 Sponsoring Organization European Investment Bank and KfW Bankengruppe

3 Address

European Investment Bank 98 -100, boulevard Konrad Adenauer L-2950 Luxembourg KfW Bankengruppe Carbon Fund, L1- KLF Palmengartenstrasse 5-9 60325 Frankfurt am Main, Germany


James Ranaivoson European Investment Bank [email protected] www.eib.org

5 Objectives

The EIB-KfW Carbon Programme II represents not only a new opportunity for selling and purchasing carbon emission credits according to the Clean Development (CDM) and Joint Implementation (JI) Mechanisms set up by the Kyoto Protocol, but also for credits to be regulated under their post- 2012 successor(s).


Least developed countries (LDCs) which are especially vulnerable to the effects of climate change while being responsible only for a very low level of GHG emissions.

7 Sector Focus

Eligible project sectors: (a) in all countries where the EIB and KfW operate: • renewable energy, including landfill gas and coal mine methane; • energy efficiency. (b) in LDCs where the EIB and KfW operate: • fuel switching


December 2011



Carbon Finance


KfW is responsible for implementing the operating objectives of the Fund, in particular deal sourcing of eligible transactions, structuring, negotiating and monitoring individual projects and their associated carbon credit purchase agreements, identifying transactions that would be eligible for an advance payment and triggering the necessary credit analysis and submit a proposal, managing the assets of the fund, including calls for payments from the participants to meet their contractual payment obligations.

A Supervisory Committee, comprising of two members and two alternates from both the EIB and Kfw oversees the activities of the Fund and takes decision by unanimous consent. Meetings are scheduled to take place four times a year. Particular activities of the Supervisory Committee include: decision on the overall procurement and sales policy of the Fund, approval of the marketing strategy of the Fund and agreement on potential buyers, approval of individual transactions that fall outside the scope of the Guidelines, proposal of revisions to the Policy and Operational Guidelines to the buyers, determination of “Reference Price” where relevant and approval of management and statutory reports prior to their submission to the buyers.


12


N/A


Least Developed Countries (LDCs) -- all sectors; Programmatic approaches (PoA) -- all sectors; If country is not LDC or PoA, then only sectors: Renewable Energy, Energy Efficiency, Methane


December 2011

Avoidance (incl. landfill gas) Pre-2013 Credits (CERs in accordance with Art. 12 of the Kyoto Protocol (CDM) and ERUs in accordance with Art. 6 of the Kyoto Protocol (JI) Post-2012 Credits


15 When and How to Apply Project promoters are invited to contact the Programme Manager (KfW).


N/A


Total amount EUR 100 million


the following limits apply to purchase obligations assumed by the Programme Manager for the Purchase Programme under any individual ERPA with one specific Relevant Project or group of bundled Relevant Projects:

• Minimum of 20,000 t CO2e p.a. • Maximum of the lower of (a) 20% of the

Total Commitment, and (b) 2 million tonnes CO2e

In respect of buyers, each “Buyer” must assume the following minimum or maximum Commitment Levels:

• Non-Government Buyers: Min. EUR 1 million, Max. EUR 10 million

• Government Buyers: Min. EUR 1 million, Max. EUR 20 million

• Intermediary Buyers: Min. EUR 1 million, Max. EUR 20 million


N/A


http://www.climatefinanceoptions.org/cfo/node/211 Carbon Programme II -- KfW site Carbon Programme II -- EIB brochure (.pdf) Presentation on Carbon Programme II (.pdf)



December 2011

EIB POST-2012 CARBON CREDIT FUND


1 Name of Financing Source EIB Post-2012 Carbon Credit Fund


The investors include five leading European public financing institutions:

• Caisse des Dépôts • European Investment Bank (principal

investor) • Instituto de Crédito Oficial • KfW Bankengruppe • Nordic Investment Bank

3 Address EIB 98-100, boulevard Konrad Adenauer L-2950 Luxembourg


Mr. Markus van der Burg Conning Asset Management www.conning.com [email protected]

5 Objectives Promoting the development of the market for reductions in greenhouse gas emissions achieved after 2012.

6 Region/Country Focus All CDM and JI host countries

7 Sector Focus

The Fund will consider projects from various sectors, including:

• Renewable Energy • Energy Efficiency • Fuel Switch • Fugitive methane, including landfill gas and

coal bed methane • Land use, land use change and forestry

(LULUCF) • Carbon Capture and Storage (CCS)


9 Type of Funding Support Carbon finance


December 2011

(e.g., loans, grants, etc.)


The Post-2012 Carbon Credit Fund is managed by Conning Asset Management (Europe) Limited, its investment manager, and First Climate, its investment advisor.


The project proponent (“promoter”) contacts EIB to determine the project’s eligibility.

12


Mitigation, Carbon Capture & Storage (CCS) , Energy , Energy Efficiency , Forestry , Fuel Switching , Fugitive Methane , Low-Carbon , Renewable Energy , Sustainable Land Management.

13 Eligibility Criteria Projects generating at least 250,000 tonnes CO2e in EURs or CERs with vintages 2013-2020

14 Proposal Evaluation Criteria Staff teams on economic, financial, technical and environmental banking criteria.


The Post-2012 Carbon Credit Fund will consider projects under the auspices of the CDM or JI, in any operational stage, from planning to operation construction stages, and from PIN to registered CDM development stage.


The Fund will on-sell carbon credits to compliance and other buyers as and when the shape of the post-Kyoto regime emerges.


Total Fund assets of EUR 125 million


N/A


N/A

20 Sources for Further Information Post-2012 Carbon Fund Guidelines



December 2011

FOREST CARBON PARTNERSHIP FACILITY (FCPF)


1 Name of Financing Source Forest Carbon Partnership Facility (FCPF)

2 Sponsoring Organization Sixteen financial contributors (Agence Française de Développement, Australia, British Petroleum, Canada, CDC Climat, Denmark, the European Union, Finland, Germany, Italy, Japan, The Nature Conservancy, the Netherlands, Norway, Spain, Switzerland, the United Kingdom and the United States



World Bank Group [email protected]

5 Objectives The following are the main objectives of the FCPF: Assist a selected group of countries in preparing for a

large-scale system of positive incentives for reducing emissions from deforestation and land degradation (REDD), including the preparation of a national REDD strategy, establishing reference scenarios for emissions reductions from those sources and establishing monitoring systems for such reductions. This objective will be achieved through the “Readiness Mechanism” (financed through the ‘Readiness Fund’).

Remunerate a small group of countries in accordance with contracts for verifiable reductions in emissions from deforestation and land degradation beyond the reference scenario. This objective will be achieved through the “Carbon Finance Mechanism” (financed through the “Carbon Fund”).

6 Region/Country Focus Developing countries. Continent Focus are on Africa, Asia, North America, Oceania and South America.

7 Sector Focus Deforestation and Land degradation (REDD)



Carbon finance , Grant Two separate mechanisms have been set up: Readiness Mechanism, for technical assistance and


December 2011

capacity building for REDD (or ‘REDD Readiness’) and Carbon Finance Mechanism, to pilot incentive payments for REDD policies and measures in approximately five countries

10 Management/Governance The FCPF governance structure includes a 28-member Participants Committee elected by the REDD Country Participants and the financial contributors, six Observers nominated by forest-dependent indigenous peoples and other forest dwellers, NGOs and international organizations, and the World Bank. The World Bank acts as trustee for the Readiness Fund and the Carbon Fund.


12 Eligible Projects/Programs (whether only for soft items such as capacity building or policy advice, etc, or also for hard items, such as for plant and equipment) or Organizations

Following activities are supported; (i) The Readiness Mechanism is designed to assist developing countries to reach a capacity level at which they will be ready to participate in a future system for positive incentives to REDD. This assistance will include, but is not limited to, support for:

Developing a national reference scenario for REDD;

Adopting a national REDD strategy that would seek to reduce emissions and at the same time conserve biodiversity and enhance the livelihoods of forest-dependent indigenous peoples and other forest dwellers. The REDD strategy should reflect each country’s priorities and be mindful of its constraints; and

Designing and, if possible, implementing accurate measurements, monitoring and verification systems to enable countries to report on emissions from deforestation and forest degradation.

(ii) For the Carbon Finance Mechanism, the following groups and categories of emission reduction Programs are envisaged:

General Economic Policies and Regulations (taxation, subsidies, rural credit, certification, law enforcement).

Forest Policies and Regulations (taxation, subsidies, certification, concession regimes, securing land tenure and land rights, forest law,


December 2011

governance and enforcement, zoning, protected areas, PES).

Forest Management (forest fires, reduced impact logging, reforestation).

Rural Development (community development, rural electrification, community forestry)

13 Eligibility Criteria All borrowing member countries of the IBRD or IDA that are located in subtropical or tropical areas are eligible. However, priority will be given to countries with substantial forest areas and forest carbon stocks and to those that have forests that are important for the livelihoods of forest dwellers and indigenous peoples. The participants committee will select countries to participate based on the submission of a Readiness Plan Idea Note in accordance with technical criteria.

14 Proposal Evaluation Criteria Selection into the Readiness Mechanism: An eligible REDD Country’s first step for accessing financing under the Readiness Mechanism is to complete the Readiness Plan Idea Note (R-PIN). This Note describes the country’s overall vision for REDD, explains the situation and challenges of the country, and indicates the work areas for which it will request assistance. Eligibility of Countries and Selection Criteria: REDD countries are selected based on their submission of a Readiness Plan Idea Note (R-PIN) and in accordance with the following criteria.

Relevance of the country in the REDD context: Priority would be given to countries with the following characteristics: (i) substantial forest area and forest carbon stocks; and (ii) relevance of the forests in the country’s economy, including relevance for poverty reduction, the livelihoods of forest-dependent indigenous peoples and other forest dwellers, and clarification of land tenure regimes;

Quality of the Readiness Plan Idea Note: The Quality of the R-PIN would be evaluated on the following criteria: (i) ownership of the proposal by both the government and relevant stakeholders; (ii) consistency between national and sectoral


December 2011

strategies and the proposed REDD Strategy; (iii) completeness of information and data provided; (iv) clarity of responsibilities for the execution of REDD activities to be financed; and (v) the feasibility of proposed activities to reduce deforestation and forest degradation and their likelihood of success;

Geographic and biome balance: Selection would take into account the need to balance experiences and learning across different continents and across the world’s main forest biomes; and

Variety of approaches: Consideration would be given to approaches that can contributeto the learning objective of the FCPF, by selecting country proposals that: (i) suggest innovative and/or comprehensive strategies/programs and approaches to tackle deforestation and degradation; (ii) focus on innovative and/or advanced concepts of monitoring, reporting and remote sensing of forest degradation, biodiversity protection and social benefits; (iii) aim to test new mechanisms and distribution methods of REDD revenues; (iv) provide regionally important leadership in addressing REDD or in technical areas relevant to Readiness; or (v) demonstrate approaches that are inclusive and focus on REDD in combination with poverty reduction, livelihood enhancement, and/or land tenure rights, including alternative forest sector or other governance arrangements.

Selection into the Carbon Fund: Following an assessment of a country's readiness package, criteria for inclusion include: - a focus on results, including sustainable emissions reductions and social and environmental benefits; - sufficient scale of implementation; - consistency with emerging compliance standards; - diversity so as to generate learning value for the FCPF and other Participants; - clear mechanisms; - and transparent stakeholder consultations.



December 2011


Selection of additional countries will depend on results of an evaluation of the FCPF, which is ongoing, and sufficient financial resources being available.


About USD 160 million so far (USD 110 million under the Readiness Mechanism and USD 51 million under the Carbon Finance Mechanism).


None



http://www.forestcarbonpartnership.org/fcp/ Useful Information related to the Readiness Fund: http://www.forestcarbonpartnership.org/fcp/node/39 Useful information related to the Carbon Fund: http://www.forestcarbonpartnership.org/fcp/node/277 http://www.climatefundsupdate.org/listing/forest-carbon-partnership-facility


MULTILATERAL CARBON CREDIT FUND (MCCF)


1 Name of Financing Source Multilateral Carbon Credit Fund (MCCF)


The (EIB) with the European Bank for Reconstruction and Development (EBRD). Apart from EIB and EBRD member states, sovereign participants include Finland, Belgium (Flanders), Ireland, Luxembourg, Spain and Sweden and private participants CEZ (Czech Rep.), Endesa (Spain), Gas Natural (Spain), PPC (Greece), Union Fenosa (Spain) and Zeroemissions (Spain)

3 Address

European Investment Bank 98 -100, boulevard Konrad Adenauer L-2950 Luxembourg European Bank for Reconstruction and Development One Exchange Square


December 2011

London EC2A 2JN United Kingdom


Jan-Willem van de Ven Head of the MCCF Secretariat, EBRD [email protected] www.eib.org

5 Objectives The MCCF is one of the few carbon funds dedicated specifically to countries from Central Europe to Central Asia

6 Region/Country Focus Region of EBRD countries of operation (Eastern Europe and Central Asia)

7 Sector Focus

The sectors eligible include: • Energy efficiency in industry (co-

generation) and larger projects in the residential sector (double glazing, insulation)

• Renewable energy such as wind, hydro, biogas (from landfills/wastewater) and biomass

• Avoided venting/flaring from gas exploration, transport and distribution and petro-chemical plants

• Fuel-switching from carbon-intensive (coal, heating oil, oil shale) to less carbon-intensive fuels such as natural gas

• Sequestration of greenhouse gases (forestry)



Carbon Finance


The MCCF does not have separate legal personality and EBRD acts as the contractual counterparty (i.e. EIB contributes management capacity, deal flow and its name, but has no direct contractual role in MCCF or exposure to the Fund or its participants). The EIB and EBRD are each represented by one person in the Secretariat (executive, full time, day-to-day fund management) and also on the Steering Committee (supervision, periodic meetings). The identification, preparation, negotiation and monitoring of project based carbon credit


December 2011

transactions are conducted by three private sector Carbon Managers.

Carbon credits purchased from projects by the Carbon Managers are acquired, via a special purpose company established by the Carbon Managers, by the EBRD acting for the account of Sovereigns, and by Private Participants directly. Another distinct feature of the MCCF is that Participants have the opportunity to decide whether to participate in each carbon credit transaction submitted to them by the MCCF Secretariat. Project-based carbon credits are then allocated amongst participants wishing to participate and pro rata to their contributions.


12


N/A


Focus on JI but with some CDM and EUAs projects (provided that the reductions result from investment in a project) and AAUs in CEE and the FSU. Carbon credits must originate from EBRD and/or ElB-financed projects located in EBRD's 29 countries of operation.



Developers and owners of greenhouse gas emission reduction projects, including sovereign entities, who are interested in bringing these projects forward for financing and carbon credit sales, are invited to contact the MCCF Secretariat.


N/A


EUR 208.5 million (Project Fund = EUR 150 m, Green Fund = EUR 58.5 m)


none


December 2011


No information


The Multilateral Carbon Credit Fund -- EIB site The Multilateral Carbon Credit Fund -- EBRD site MCCF/Russia Energy Efficiency Project MCCF/Baltic Wind Farms Projects MCCF/Georgia Clean Energy Project



December 2011

UNDP/MDG CARBON FACILITY


1 Name of Financing Source UNDP/MDG Carbon Facility

2 Sponsoring Organization UNDP and Fortis Bank

3 Address

United Nations Development Programme 304 East 45th Street New York NY 10017


[email protected]

5 Objectives

Broadening access to carbon finance by enabling a wider range of developing countries to participate; Promoting emission reduction projects which contribute to the Millennium Development Goals by yielding additional sustainable development and poverty reduction benefits.


The Facility targets projects in (i) countries which are either under-represented in carbon finance, and/or (ii) which achieve outcomes which contribute to the host state’s Millennium Development Goals.

7 Sector Focus Methane mitigation sector, Renewable energy, energy efficiency sector, bio-sequestration, transport sector and cleaner energy sector.

8 Technology Focus

Ineligible categories are nuclear energy, large scale hydropower, geo-sequestration (including enhanced oil recovery). Shifting of electric power loads, and the capture and destruction of industrial gases.


carbon finance


UNDP works with project proponents towards emission reductions. UNDP partner up with buyers, either private sector or government, who will then purchase the credits generated by the project.


Project Idea Note


December 2011

12


Mitigation, Agriculture , Energy Efficiency , Fuel Switching , Fugitive Methane , Infrastructures , Renewable Energy , Transport , Waste Management

UDP provides technical assistance, due diligence, and carbon finance services to implement emissions reductions projects.

13 Eligibility Criteria No specific exclusions. Initial eligibility screening early in project cycle.

14 Proposal Evaluation CriteriaStandardized criteria in five areas: carbon credit yields, technical feasibility, financial and legal constraints, MDG compliance, and country risks.


Project developers interested in taking advantage of the Facility’s program complete a series of documents as the initial application, including a Project Idea Note (PIN). The PIN serves as the initial contact between project proponent and the Facility, and is the basis for the screening exercise to determine a project's eligibility to participate in the Facility.


If UNDP’s screening during Phase I concludes that the potential project is eligible, the project will proceed to Phase II. During Phase II, UNDP provides the technical assistance necessary to develop and implement the project, as well paying for the initial validation and verification from a Designated Operational Entity (DOE). The relationship between UNDP and the project proponent is guided by a memorandum of understanding in Phase I and a service agreement in Phase II.


Project-specific


Project-specific


Info not provided


http://www.mdgcarbonfacility.org http://www.undp.org/mdg



December 2011


December 2011

WORLD BANK CARBON FUNDS AND FACILITIES


1 Name of Financing Source World Bank Carbon Funds and Facilities




Carbon Finance Helpdesk [email protected] [email protected]

5 Objectives

Carbon finance facilitates the financial reward through carbon credits for the reduction of greenhouse gas emissions by emitters in developing countries.

6 Region/Country Focus Developing countries and countries with economies in transition

7 Sector Focus

Collaborates across sectors, in projects relating to rural electrification, renewable energy, energy efficiency, urban infrastructure, waste management, pollution abatement, forestry, and water resource management.



Carbon finance, with possible upfront payment (up to 25% of transaction amount) and some possible post-2012 purchase. Carbon asset development costs can also be covered in deserving cases.


The emission reductions are purchased through one of the CFU's carbon funds on behalf of the contributor, and within the framework of the Kyoto Protocol's Clean Development Mechanism (CDM) or Joint Implementation (JI).



Adaptation , Mitigation, Agriculture , Climate-Resilient, Energy, Energy Efficiency, Forestry, Fuel Switching, Fugitive Methane , Low-Carbon , Natural Resource Management , Renewable Energy


December 2011


, Sustainable Land Management , Transport , Urban , Waste Management CFU does not lend or grant resources to projects, but rather contracts to purchase emission reductions similar to a commercial transaction.


IBRD/IDA member countries; CDM or JI-eligible project activities (also voluntary window mainly for forestry and agriculture-based projects) and AAU transactions (through GIS); Project with at least 200,000 MtCO2e emission reductions by 2012; Host country approval


A financial analysis model is mandatory when submitting a Project Idea Note. The PIN is used as an initial screening instrument and provides the proponents with feedback. When the World Bank’s Carbon Finance Unit decides to develop a project idea further, it provides guidance, as needed, to the project proponent through the steps of the project cycle.



Payments for purchases are made annually or periodically once they have been verified by a third party auditor.


Total - About USD 2.5 billion under management through 10 carbon funds and facilities


N/A


N/A

20 Sources for Further Information www.carbonfinance.org

21 Additional Comments The Bank has determined that its portfolio has enough HFC projects and will not be taking on more such projects.


December 2011

WORLD BANK CARBON PARTNERSHIP FACILITY (CPF)


1 Name of Financing Source World Bank Carbon Partnership Facility (CPF)


3 Address

The World Bank MC 3 - 721 1818 H Street, NW Washington, DC 20433


Richard H. Zechter, Lead Carbon Finance Specialist [email protected]

5 Objectives The CPF's objective is to develop emission reductions and support their purchase, on a larger scale through the provision of carbon finance to long-term investments. (post-2012 period)


As of September 2011, the CPF Buyer Participants included the Governments of Spain, Norway and Sweden, and Endesa SA and E.ON Carbon Sourcing North America LLC. The Seller Participants were the Fonds D’equipement Communal of Morocco, Caixa Econômica Federal of Brazil, the Ministry of Industry and Trade of Vietnam, the Greater Amman Municipality, the Provincial Electricity Authority of Thailand, the Hebei Green Agriculture Company and the Rural Energy Agency of Tanzania. Donors to the Carbon Asset Development Fund included the Governments of Spain, Norway and Italy, and the European Commission.

7 Sector Focus Energy generation and distribution, Energy efficiency, and Waste management



Trust funding

10 Management/Governance The Carbon Partnership Facility (CPF) is employing a governance structure that features the balanced participation of buyers and sellers. Host country governments and donors will also directly


December 2011

participate in the governance of the CPF in an advisory capacity. Donor contributors may include governments and other public and private entities. Closer collaboration and partnership between all parties in the carbon market provides a unique operational level opportunity for the parties involved to exchange views and discuss issues of mutual interest, with the goal of making carbon finance an even more effective tool in climate change mitigation and development.


12


CPF Pipeline – programs under development:

Programs with Seller Participation Agreements

Brazil – Solid Waste Management Program

Vietnam – Renewable Energy Program

Morocco – Solid Solid Waste Management Program Waste Management Program

Jordan – Amman Green Growth Program (City-wide Approach)

Thailand – Clean Energy Program

China – Hebei Regional Biogas Program

Tanzania – Renewable Energy Program

Under Negotiation: Egypt – Wind Program



15 When and How to Apply CPF Expression Of Interest Templates are available online



The CPF is comprised of two trust funds: (i) the Carbon Asset Development Fund (CADF) to prepare and implement emission-reduction programs, and (ii) the Carbon Fund (CF) to purchase carbon credits from the pool of emission reduction programs.

18 Funding Limit for


December 2011

Individual Projects



http://cpf.wbcarbonfinance.org/cpf/ http://cpf.wbcarbonfinance.org/cpf/system/files/CPF_structure_and_governance_Updated_Nov.2011.pdf



December 2011

B. BILATERAL FINANCING SOURCES


December 2011

AFD – FRENCH DEVELOPMENT AGENCY


1 Name of Financing Source AFD – French Development Agency


Agence Française de Développement (AFD) is a financial institution and the main implementing agency for France’s official development assistance to developing countries.

3 Address

AFD Headquarters 5 Rue Roland Barthes 75598 PARIS CEDEX 12 FRANCE


[email protected]

5 Objectives

The Primary Objectives of AFD’s 2007-2011 Strategic Orientation Project are: • Provide a diversified range of services including

advice, capacity building and financing, and devote 10% of net banking income to the creation of knowledge, technical training and consulting.

• Aim for AFD's financing commitments to contribute to at least 40% of each of its three primary goals: promoting economic growth, fighting poverty and preserving “Global Public Goods,” which means fighting climate change and pandemics, and preserving biodiversity.

• Dedicate at least 80% of all grant monies and 60% of France's development aid contribution to AFD's budget to interventions in sub-Saharan Africa, while extending lending activity to all African countries. In 2009, the French Interministerial Committee for International Cooperation and Development re-affirmed that 60% of France’s development aid contribution to AFD's budget would be devoted to sub-Saharan Africa. It also defined a new objective for AFD to focus at least 50% of its grant monies (excluding grants to countries in crisis) on 14 poor countries in sub-Saharan Africa.


December 2011

• Implement a strategy for interventions in emerging countries based on managing Global Public Goods of benefit to all humanity, i.e. fighting climate change and pandemics, and preserving biodiversity.

• Direct 50%of financing commitments to non-sovereign entities, such as local governments and authorities, businesses and non-governmental organizations.


AFD operates in more than 70 countries worldwide.Sub-Saharan Africa: South Africa, Angola, Benin, Botswana, Burkina Faso, Burundi, Cameroon, Cape Verde, Centrafrican Republic, Chad, Comoros, Congo, Côte d'Ivoire, Democratic Republic of the Congo, Djibouti, Ethiopia, Gabon, Ghana, Guinea, Guinea Bissau, Kenya, Madagascar, Mali, Mauritius, Mauritania, Mozambique, Namibia, Nigeria, Niger, Rwanda, Sao Tome and Principe, Senegal, Sudan, South Sudan, Tanzania, Togo, Uganda, Zambia, Zimbabwe. Latin America and the Caribbean: Brazil, Colombia, Haiti, Mexico, Antilles, Dominican Republic, Suriname. Asia: Afghanistan, Cambodia, China, India, Indonesia, Laos, Pakistan, Philippines, Sri Lanka, Thailand, Vietnam Mediterranean and Middle East: Algeria, Egypt, Jordan, Lebanon, Morocco, Syria, Palestinian Territories, Tunisia, Turkey, Yemen

7 Sector Focus

The issue of sustainable development is at the heart of the AFD’s activities, which seek to simultaneously achieve three goals: promoting economic growth, reducing poverty and social inequality and protecting the environment.



AFD and its subsidiary, Proparco, combine grants with the widest range of traditional and structured financial instruments. They include grants through private equity, as well as the most innovative credit and capital risk underwriting techniques. AFD’s special expertise is known as “financial


December 2011

engineering.”


AFD works within the framework of the French government’s development policy via several tools:

• A coherence tool for each country: “Partnership Framework Documents (PFDs)”. They are the reference documents for all the actors of French cooperation, which naturally means that AFD and its representatives in the field fully participate in their definition and integrate this reference when preparing Intervention Frameworks.

• A coherence tool for each sector: “Sector Strategies ". They are jointly prepared by AFD, the Directorate General for International Cooperation and Development (DGCID) and the Directorate General of the Treasury and Economic Policy (DGTPE) following in-depth consultations. AFD’s Sector Intervention Frameworks (SIFs) are in line with these Sector Strategies.

• Financial tools: AFD implements financing and project grants under the budget programs of the Ministry of Foreign and European Affairs (MAE) and the Ministry of the Economy, Industry and Employment (MINEFI) for official development assistance.

11 Proposal/Application Requirements No information available

12




14 Proposal Evaluation Criteria AFD only contractually undertakes to finance a project provided (1) there is a favorable outcome to


December 2011

AFD’s preparation and appraisal procedure for the relevant project, (2) its internal decision-making bodies approve financing for the relevant project and (3) the financing agreement is signed with terms that are satisfactory to AFD.


Applications for project funding are submitted by the local contracting authorities to the AFD offices that identify the project. Together with the contractor, the AFD then undertakes a preliminary appraisal of the project idea. The next step is a feasibility study, often AFD-funded, which is carried out by a consulting firm engaged on the initiative of the contracting authorities. A technical study, marketing survey and financial projections are all part of the feasibility study. If the study is positive, the local office, in collaboration with the operational departments at AFD headquarters, makes the decision to take the project development process a step further. A study is then carried out to check that the project is technically, economically and financially viable. At this stage, the financing plan is drawn up with the borrower. Each stage of the project development process is ensured by a "project team" led from the AFD headquarters. The decision to grant funding is only taken if all the conditions for the project's success seem to be met and are agreed on by the contractor. The funding is then approved by the AFD's appropriate decision-making body (Supervisory Board, States Committee or Overseas Committee). The beneficiary then signs a loan or subsidy agreement with the AFD.


The beneficiary signs a loan or grant agreement with AFD. The selection of enterprises and service providers (contractors) is made through a bidding process launched by the Owner in compliance with local regulations. AFD verifies this compliance but does not intervene in the selection of enterprises. It does however regularly monitor project performance. Payments are made through a closely-controlled disbursement circuit.


December 2011

17 Size of the Funding source (Annual or Total) €6.8 billion to finance development in 2010

18 Funding Limit for Individual Projects No information


AFD regularly monitors and supervises project performance during the implementation phase.

The Evaluation and Knowledge Development Unit (RCH/EVA) is responsible for conducting evaluations in line with these objectives, and in particular for: (i) defining evaluation methods and the quality assurance process for evaluations conducted on completion of AFD financing; (ii) producing impact analyses of some of the projects, programmes and policies that AFD supports; (iii) managing overall or strategic evaluations; (iv) carrying out meta-evaluations and developing a knowledge base on specific topics. The evaluation process at AFD has two main objectives, in accordance with the guidelines set by the OECD Development Assistance Committee (DAC) :

• to draw lessons from the past in order to improve future aid policies, programmes and projects;

• to serve as the basis for accountability, including with respect to the public.


http://www.afd.fr



December 2011

AUSAID - COMMUNITY BASED CLIMATE CHANGE ACTION GRANTS


1 Name of Financing Source AusAID - Community Based Climate change Action Grants

2 Sponsoring Organization Australian Agency for International Development

3 Address 255 London Circuit Canberra ACT 2601 Australia


Kellie Raab Climate Change Policy and Adaptation Section AusAID GPO Box 887 Canberra ACT 2601

Email: [email protected]

5 Objectives Achieving environmental sustainability is a key theme of the Australian aid programme, as well as the Millennium Development Goals.

6 Region/Country Focus Pacific and South-East Asia

7 Sector Focus Adaptation and mitigation



Grants The grants fall into two main categories:

1. Community-based adaptation grants, which will help build the resilience of communities to the impacts of climate change; and

2. Community-based mitigation grants, which will help communities reduce or avoid greenhouse gas emissions, while also addressing key development priorities


The Australian Agency for International Development (AusAID) is an administratively autonomous agency within the Foreign Affairs and Trade portfolio. Final responsibility for the operation and performance of AusAID rests with


December 2011

the Director General who reports directly to the Minister for Foreign Affairs and Trade on all aspects of aid policy and operations.


12


In applying for support, applicants should note the following funding criteria:

a) Funding support will cover activities beginning by mid-2012 and finishing on or before 31 December 2014. All funding will be disbursed in the 2011-12 and 2012-13 financial years.

b) Funding must be proportional to the work entailed and demonstrate value for money. A project budget must be included as an annex to each application.

c) AusAID will fund up to 70 percent of the detailed design of activities for successful applicants. Design should be undertaken in consultation with AusAID in the first half of 2012. Organisations should include an estimate of the design costs in their proposals. The grants awarded to organisations will be inclusive of design costs.

d) Proposal budgets should include the costs of monitoring and evaluation. 100 percent of these costs will be eligible for funding.

e) Funding for mitigation activities is focused on low emissions growth, such as energy efficiency, sustainable transport, the promotion of clean technologies and land use management. REDD+ activities are not eligible for funding.

f) Funding must not be used for purposes other than for the activity outlined in


December 2011

the application.


Grants are available for Australian and international NGOs to work with local organisations to increase current successful community-based climate change activities or to build a climate change component into existing community development activities in the Pacific and South-East Asia. To be eligible for funding, proposed activities must comply with the following criteria:

1. Proposed activities must be consistent with the Australian aid program’s strategic goals and development objectives.

2. The proposed activities must comply with AusAID’s safeguards, as described in Annex 4.

3. The proposed activity is to be implemented in one or more Pacific Island countries or in a single country in South East Asia

4. Organisations proposing to run activities in Vietnam are eligible for mitigation funding for this grants program. However, adaptation proposals for other eligible countries can include a mitigation component. The mitigation component of these projects must not exceed 20 percent of the total activity.

5. Proposals for integrated adaptation and mitigation activities may be accepted for Vietnam. The proposals should clearly indicate the relative proportions of adaptation and mitigation components.

6. The proposal must be consistent with the relevant policies of partner countries and address priorities at the community level. Organisations are encouraged to develop proposals in consultation with partner country governments. Host


December 2011

government endorsement will be required prior to commencing implementation (and while not required at the application stage, organisations are encouraged to consult with partner country governments when developing their proposals).

Ineligible activities and ineligible costs Support will NOT be provided for applications that seek funding for:

1. Activities that are determined reasonably to be contrary to the interests of the Commonwealth of Australia.

2. Activities that do not clearly demonstrate a commitment to the participation of partners in programming and implementation.

3. Recurrent costs, unless there is a convincing plan to ensure the recipients will be able to take over those recurrent costs within the life of the activity.

4. Retrospective activities. 5. Management overheads that exceed 10

percent of total project costs. 6. Travel expenses that exceed 20 percent

of total project costs. 7. Activities that cannot clearly

demonstrate an ability to generate “on-the-ground” benefits for target communities.

8. REDD+ projects.


Organizations will be assessed against the following criteria:

a) The organization(s) has proven ability to generate positive, measureable development and climate change adaptation or mitigation outcomes at the community level, and demonstrates


December 2011

capacity to scale-up and build on current successful operations.

b) The organization(s) has demonstrated extensive and relevant in-country experience in target country(ies) with established relationships with local partners, organizations and governments in target country(ies).

c) The organisation(s) has the ability to build the capacity of partner NGOs/community based organisations and communities in target country(ies) to respond to climate change.

Activities will be assessed against the following criteria:

a) The activity has clear objectives and outcomes that will help to meet: i) the objectives of the

Community-based Climate Change Action Grants program (Section 2 of these Guidelines);

ii) the priorities of Australia’s aid program for the relevant partner country(ies) (Annex 5 of these Guidelines);

iii) the climate change and development priorities of the national government of the intended partner country(ies);

iv) the objectives of the International Climate Change Adaptation Initiative.

b) The activity replicates or scales up existing successful climate change projects and/or integrates climate change considerations into existing successful sectoral projects (for example agriculture or water projects) in the target country(ies). New climate change projects will also be considered


December 2011

when the applicant can demonstrate an ability to achieve tangible results in the program timeframe.

c) The activity focuses on: i) key climate vulnerabilities and

adaptation priorities at the community level (activities incorporating sustainable livelihoods outcomes, disaster risk reduction, and/or environmental co-benefits are strongly encouraged); and/or

ii) opportunities to reduce or avoid greenhouse gas emissions at the community-level, while also contributing to development priorities in the target community (activities incorporating sustainable livelihoods outcomes, low-emissions growth, ‘green growth’, pragmatic low emission technology transfer, and/or environmental co-benefits are strongly encouraged).

d) The activity includes a prominent role for local NGOs, community-based organisations and/or partner country governments (national or sub-national) in development and implementation and includes capacity building within the community to assist in achieving sustainable adaptation outcomes.

e) The activity integrates gender equality, environmental sustainability, disaster risk reduction and social inclusion including people with a disability.

The activity includes adequate monitoring and evaluation arrangements to effectively measure and


December 2011

report on progress towards project objectives and, for adaptation proposals, ICCAI objectives.


Organisations are invited to submit concept proposals for the grants program. AusAID will co-fund the detailed design of activities for successful organizations Activities are expected to commence by mid-2012 and be completed by 31 December 2014. All concept papers must be received by AusAID by 5pm Canberra time on 10 February 2012.




Applications of $1-3 million in South-East Asia and $1-2 million in the Pacific will be considered.

Up to AUD$30 million in funding is available to non-government organisations though the Community-based Climate Change Action Grants. The available funding by region is detailed below:

Focus Region Country specific or regional

Size of individual grants (AUD)

Total funding avai

Adaptation

Pacific Regional or single country

$1-2 million

Up to $10 million

South East Asia

Single country

$1-3 million

Up to $15 million

Mitigation

Vietnam

Single country

$1-3 million

Up to $5 million


No information


http://www.ausaid.gov.au/ http://www.ausaid.gov.au/keyaid/envt.cfm http://www.ausaid.gov.au/publications/pubout.cfm?ID=3274_9430_2044_3181_1829&Type=



December 2011

AUSTRIAN DEVELOPMENT COOPERATION (ADC) ENERGY AND ENVIRONMENT PARTNERSHIP PROGRAM


1 Name of Financing Source Austrian Development Cooperation (ADC) Energy and Environment Partnership Program with Southern and East Africa (EEP S&EA)


The EEP S&EA is jointly funded by the Ministry for Foreign Affairs of Finland, the Austrian Development Agency and the UK Department for International Development (DFID) while the EEP Regional Coordination Office (RCO) is hosted by the Development Bank of Southern Africa (DBSA), South Africa.

3 Address


EEP Regional Coordination Office Ms. Memory Dhliwayo (Programme Administrator) [email protected]

5 Objectives

Austrian Development Cooperation (ADC) pursues its goals of reducing global poverty, ensuring peace and human security and preserving the environment in an international framework. The policies and programme parameters are agreed on with the European Union and in international committees (EU, UN, OECD, IFIs). Two policy pillars of bilateral and multilateral development cooperation are the Millennium Development Goals and the Paris Declaration.


Southern and Eastern Africa. The projects must be implemented in at least one of the following Southern and Eastern African Partner Countries: Botswana, Kenya, Mozambique, Namibia, Seychelles, South Africa, Swaziland, Tanzania and Zambia

7 Sector Focus

Sector focus: 1. Rural Energy Solutions 2. Electrification 3. Industrial energy efficiency


December 2011

4. Industrial energy solution 5. Urban/ Peri-urban Energy Solutions 6. Water supply, 7. improvement of education 8. Health/hygiene services provision) 9. Agricultural Development 10. Other (will have to be specified)

8 Technology Focus

1. Solid Biomass (improved woody biomass, improved charcoaling, improved cookstoves, etc)

2. Liquid Bio-fuels (Bio-diesel, Bio-ethanol). Projects which promote biofuels from jatrophas curcas are not eligible

3. Biomass power generation 4. Biogas for large scale thermal

applications or for electricity generation 5. Biogas for small scale domestic

applications 6. Energy Efficiency/Conservation

(Quantifiable) 7. Geothermal 8. Hydroelectric Power 9. Solar PV (grid/off-grid/ mini –grid) 10. Solar thermal applications (SWH, CSP,

etc) 11. Waste-to-Energy 12. Wind turbines for electricity generation 13. Wind pumps 14. Hybrid (indicate sources and

technologies) 15. Multi-Energy Use Solution 16. Other (will have to be specified)


non-reimbursable grant

10 Management/Governance The Austrian Development Agency (ADA) is in charge


December 2011

of implementing all bilateral projects and programmes of the Austrian Development Cooperation (ADC). For this, ADA has various financing instruments at its disposal.


The application worksheet comprises four Major sections namely 1) Overview, 2) Project Details 3) Financial Information and 4) Applicant information. Instructions on the information which should be filled in each section is available on the worksheet.

12


EEP funded project is NOT about “promoting” renewable energy or energy saving/conservation but about “producing” renewable energy or “saving/conserving” energy. Activities like Market Development Studies, Market Surveys/Design, Strategic Framework Studies, Capacity Building/Training, Policy Development Studies, Regulatory Frameworks, Energy Planning Tools, Innovative Financing Schemes Development not producing renewable energy or saving or conserving energy are all outside the scope of the EEP Call for Proposals and if you submit such proposal applications they would NOT be considered for funding. The Eligible EEP activities are pre-feasibility study, feasibility study, pilot project, demonstration projects and an up-scaling of existing pilot or demonstration project


Individuals and government entities are not eligible. An applicant should be registered with the appropriate registration body in your country of operation and your appropriate registration number will be required on the application form before you are allowed to proceed with your application online. Each organisation should submit ONLY ONE application for a given country. The EEP Programme strives to give every entity a chance and encourages a diverse pool of submissions from applicants. Applicants can partner with other organisations or entities in order to meet human resource capacity and competence to implement the proposed project. If a project is submitted by a consortium of organizations, the lead partner will be the applicant. The applicants should be the organisations or entities which have longer term commitment to develop the projects to investment


December 2011

stage. Applications will not be accepted if submitted by consultancy companies on behalf of their clients who are supposed to be the lead applicants. The consultancy firms should remain with the role of providing services to the project lead applicant and should be listed as a project partner. Only applicants who have committed the required level of own contribution to the project budget will be eligible.

14 Proposal Evaluation Criteria Projects with higher proportion of own fund contribution stands a better chance to be selected.


The following rules will strictly apply: a. Applicants need to create an account at the EEP-S&EA website, log in and then complete the application form. b. After completing the form online and clicking the “Submit” button, you would receive an email feedback message to your user email address indicating the success of your submission as well as a copy of your completed application. c. Incomplete application forms or applications submitted via email will not be accepted. d. Each application will be identified with the applicants email address and its registration user name for a legal entity. e. Applications should be submitted by the lead partner, the organization which will sign the project contract with EEP. Applications which are received through other project partners will be rejected. f. For all applicants, it is advised that you download the offline application form, check the requirements and make notes offline before logging in to fill the online form. To enable all applicants to acquaint themselves with all the requirements of the Fourth Call for Proposals before logging in to fill the application online, the online application system will only open to the public on 04 January 2012 when project proponents will be allowed to submit their applications. g. It is also advised to avoid completion of the online application form towards the deadline when the usage traffic on the website is expected to be high such that it may cause slow system response. h. If you do not receive any confirmation message


December 2011

after you have submitted your proposal online, please inform EEP S&EA on [email protected]. If you do not receive a PDF copy of your proposal through your email address after your online submission, it could be that your proposal submission was unsuccessful due to outstanding or incorrect information and therefore you may have to check if all is in order first before contacting our office. i. Where in difficulty submitting your proposal through the EEP website please contact your National Coordinator for assistance in perhaps using their internet for submission. The contact details of the National Coordinators have been listed below for your perusal. j. The deadline for submission of the project profile note is 16 January 2012 13h00 South African Time (GMT+2). Any proposal submission after this time will be rejected by the online application system and any emails or telephone calls received regarding such late applications will not be responded to. Only online submissions at the EEP website www.eepafrica.org will be accepted in this Fourth Call for Proposals.



The estimated projects grant budget for this Fourth Call for Proposals is about EUR 4.3 million and this is expected to be awarded to about 25 projects


The project implementation period is limited to 12 months. For all projects, the Amount Requested from EEP should not be more than EUR 200 000 depending on the type of project. For a Leading Applicant being an NGO, Community Based Organisation, Non-for Profit Organisation and the like, the Amount Requested from EEP should not be more than 90% of the Total Project Cost and the Total Own Contribution should not be less than 10% of the Total Project Cost. For all other organisations being the Lead Applicant, the Amount Requested from EEP should not be more than 75% of the Total Project Cost and the Total Own Contribution should not be less than 25%.


December 2011



www.eepafrica.org

http://www.entwicklung.at/fileadmin/media/F%C3%B6rderungen_und_Ausschreibungen/Aktuelles/Ausschreibungen/2012/EEP/Guidelines.pdf



December 2011

DANIDA (DANISH INTERNATIONAL DEVELOPMENT AGENCY)


1 Name of Financing Source DANIDA (Danish International Development Agency)

2 Sponsoring Organization Danish Government

3 Address

Ministry of Foreign Affairs of Denmark Danida Asiatisk Plads 2 DK-1448 Copenhagen K

4 Key Contact (Name, e-Mail, and Website) [email protected]

5 Objectives

Denmark’s development policy aims to contribute to reducing global poverty and helping people to take charge of their own destinies. This is the overriding objective for which Danida works.


7 Sector Focus Environment, natural resources, adaptation to and prevention of climate change and access to sustainable energy




Danida has responsibility for the planning, implementation and quality assurance of development cooperation. There are local and posted staff at Danish embassies and missions abroad who are responsible for the administration and management of development cooperation with the individual country.



12




December 2011

13 Eligibility Criteria No information available online

14 Proposal Evaluation Criteria No information available online

15 When and How to Apply No information available online




Denmark grants an annual approximately DKK 15 billion in development assistance.





20 Sources for Further Information http://www.amg.um.dk/en


1. Active participation in international cooperation on sustainable development.

Denmark support a number of international organisations working with environment and climate: GEF - Global Environment Facility, GGGI - Global Green Growth Institute, IIED - International Institute for Environmental Development, IISD - International Institute for Sustainable Development, IUCN - International Union for Conservation of Nature. 2. Increased access to sustainable energy Denmark grants a considerable amount of support through the World Bank’s energy programme, ESMAP, to increase sustainable energy capacity in a number of developing countries. Denmark also cooperates with the African Development Bank to help local energy producers to prepare their investment projects in sustainable energy and procure venture capital to finance the projects. Through the UNEP, the UN’s environment programme, Denmark supports the Risoe Centre, which provides the developing countries with energy advisory support and which has succeeded in establishing itself as a key actor in energy consultancy. 3. Enhanced effort for environment and

climate in developing countries Contributions are made to a number of different


December 2011

multilateral and bilateral activities that support adaptation by the most vulnerable developing countries to climate change and also support initiatives to limit emissions of greenhouse gases, including promoting sustainable energy and, on a more general level, the organisation of green economic growth. DANIDA has made contributions to Bangladesh, CIF - Climate Investment Funds, Fast Start Finance Initiative, GCPF - Global Climate Partnership Fund, GGGI - Global Green Growth Institute, NDF - Nordic Development Fund, The World Bank, UN-REDD - United Nations forest programme. 4. Sustainable management of natural

resources: land, water and forests Denmark assists developing countries to build their capacity to mange natural resources in a sustainable manner through a number of multilateral and bilateral programmes.


December 2011

GUYANA REDD + INVESTMENT FUND (GRIF)


1 Name of Financing Source Guyana REDD + Investment Fund (GRIF)

2 Sponsoring Organization Government of Norway

3 Address

Office of Climate Change Office of The President Shiv Chanderpaul Drive Georgetown GUYANA


Government of Guyana: Shyam Nokta, [email protected] Government of Norway: Ellen Bruzelius Backer, [email protected] World Bank: Sergio Jellinek, [email protected] [email protected] www.lcds.gov.gy

5 Objectives

The GRIF is the financial mechanism for the ongoing cooperation on climate change between Guyana and Norway. Norway will pay for Guyana’s performance on limiting greenhouse gas emissions from deforestation and forest degradation, and for progress made against governance-related indicators. Guyana will invest the payments it receives, and any income earned on them, in its Low Carbon Development Strategy (LCDS).

6 Region/Country Focus Guyana

7 Sector Focus Adaptation , Mitigation, Energy , Forestry , Low-Carbon , Natural Resource Management , Renewable Energy , Sustainable Land Management



Carbon finance , Grant , Other , Payment for Ecosystem Services (PES)

10 Management/Governance The Steering Committee (SC) will be chaired by


December 2011

the Government of Guyana, and its members will be the Government and the Contributors to the GRIF. Any decision of the Committee will be made by consensus. The World Bank’s International Development Association (IDA) was invited by Guyana and Norway to act as Trustee and will be responsible for providing financial intermediary services to the GRIF. The Trustee will receive funds from contributors, and manage them within a trust fund on Guyana's behalf. The Trustee will make transfers of GRIF resources in the amounts approved by the SC to Partner Entities. The Trustee, each of the GRIF Partner Entities, civil-society organizations and private sector entities will be invited to participate in the Steering Committee as observers. The number of observers representing civil-society organizations and private sector entities, and the process for their selection, will be decided by the Steering Committee.


N/A

12


The GRIF will provide grant financing for goods, works or services for an investment, technical assistance or capacity building activity or activities as approved by the Steering Committee in accordance with the GRIF Governance Framework Document. The GRIF will not provide financing for budget support.

13 Eligibility Criteria Projects financed by GRIF must adhere to REDD+ principles and to the guidelines of Guyana's Low Carbon Development Strategy.




Performance based payments. Payment will be based on an independent verification of Guyana’s implementation of REDD+ enabling activities.


Total up to $250 million through 2015

18 Funding Limit for N/A


December 2011

Individual Projects


The extent to which Guyana’s forest provides climate change mitigation services, as set out in the Guyana-Norway Memorandum of Understanding and Joint Concept Note.


Guyana Low-Carbon Development Strategy

World Bank GRIF




December 2011

INTERNATIONAL CLIMATE FUND (FORMERLY ETF-IW)


1 Name of Financing Source International Climate Fund (Formerly ETF-IW)

2 Sponsoring Organization Government of United Kingdom

3 Address



[email protected]

5 Objectives

The International Climate Fund follows on from the Environmental Transformation Fund – International window (ETF-IW) and is set up on the same basis.

The ETF-IW supported development and poverty reduction through environmental protection, and helped poor countries respond to climate change.

The ETF-IW objectives were:

1. Contribute to a successful global deal on climate change:

i. By generating experience to inform, support and influence the development and implementation of an efficient, effective and equitable financing framework as part of a new global deal.

ii. By raising ambition, capacity and confidence in developing countries.

2. Transform the way in which developing countries approach climate change, by piloting financial approaches which demonstrate how low carbon growth and climate resilience are compatible with countries’ overall development paths.

3. Contribute to the international institutional reform agenda by putting climate resilient development and low carbon growth at the heart of the work of the multilateral development banks.


December 2011

4. Support strategic coordination and coherence across the international financing system for climate change by providing a forum for discussions between donors and recipients about appropriate financing mechanisms and tools for low carbon and climate resilient development.

5. Leverage additional finance from other donors and the private sector for climate change.

6. Maximise co-benefits in poverty reduction and sustainable management of natural resources.

The ICF is intended to drive urgent action to tackle climate change by supporting low carbon growth and adaptation in developing countries.

6 Region/Country Focus Global

7 Sector Focus

8 Technology Focus

Following are outside the scope of the programme: Research into New technologies, given the

policy focus on deployment.

Technologies that are not either very low or zero carbon (with the exception of Carbon Capture and Storage [CSS] readiness work), given the policy focus on transformation.


Finance disbursed through the Climate Investment Funds (including from the UK’s contribution to them) will be part concessional loans and part grant.


The International Climate Fund will be managed by a high level cross-departmental project team with representation from the Department for International Development (DFID), the Department for Environment and Climate Change (DECC) and the finance ministry (Her Majesty’s Treasury). The Department for Environment, Food and Rural Affairs (DEFRA) will also be involved in decisions on the use of the International Climate Fund for forestry.


12 Eligible Projects/Programs (whether only for soft items

Mentioned under eligibility criteria section


December 2011

such as capacity building or policy advice, etc, or also for hard items, such as for plant and equipment) or Organizations


Country access to the Climate Investment Funds will be based on: (a) ODA-eligibility (according to OECD/DAC guidelines); and (b) An active multilateral development bank (MDB) country program. Individual Funds/Programmes may develop additional country prioritisation criteria. The only programme to have done this so far is the Pilot Programme for Climate Resilience. The additional prioritisation criteria for this programme were set by an independent expert group. What is outside the scope of the programme and why?

Small projects. The Climate Investment Funds are designed to pilot different approaches at scale. They will finance country owned investment programmes. The CIFs will not fund small scale ad-hoc projects

Some countries. In order to pilot different approaches at scale, the CIFs will focus on a small number of countries. They will not be able to provide resources for everybody.

Projects that could be financed by other funds – the CIFs will work closely with, but not duplicate the efforts of other funds such as the GEF

Business as usual – the CIFs will cover the additional costs of transformation.




17 Size of the Funding source Total from ETF- IW £800Mn


December 2011

(Annual or Total)




DEFRA website http://www.defra.gov.uk/environment/climatechange/internat/devcountry/funding.htm DFID website http://www.dfid.gov.uk/news/files/climate-etf.asp World Bank website http://www.worldbank.org/cif Brochure produced by UK Government summarising many of the funding flowing through ETF-IW:http://www.dfid.gov.uk/Documents/BROCHURE%20UK%20FAST%20START.pdf



December 2011

INTERNATIONAL CLIMATE INITIATIVE (GERMANY)


1 Name of Financing Source International Climate Initiative (Germany)

2 Sponsoring Organization The Ministry for the Environment, Nature Conservation, and Nuclear Safety (BMU) of the Government of Germany.

3 Address Programmbüro Internationale KlimaschutzinitiativePotsdamer Platz 10 10785 Berlin Germany


Government of Germany Ministry for the Environment [email protected]

5 Objectives

Promoting a climate-friendly economy

Promoting measures for adaptation to the impacts of climate change

Promoting measures for preservation and sustainable use of carbon reservoirs/ Reducing Emissions from Deforestation and Degradation (REDD)

6 Region/Country Focus Developing countries, Emerging economies and in the Transition countries

7 Sector Focus Climate change mitigation, climate change adaptation, and conservation of climate-relevant biodiversity.



Grant , Loan , ODA Funding from the ICI directed to developing countries is considered official development assistance (ODA). Funds are disbursed mainly in the form of grants, yet some ICI financing may be provided as interest rate subsidized loans, such as that provided to Russia/CIS states for use in CDM/JI projects. The financing is intended to encourage private-sector investment by making projects.

10 Management/Governance The administration of the International Climate Initiative is carried out by a programme office


December 2011

located at GTZ, supported by additional personnel capacity provided by KfW.

An international advisory board offers strategic support to the practical work undertaken in the ICI.


If their project outlines are promising, request will be made to submit a formal grant application, with detailed project plan and a financing strategy.

12


Adaptation , Mitigation, Agriculture , Disaster Risk Reduction , Energy Efficiency , Forestry , Populations & Human Settlements , Renewable Energy , Sustainable Land Management , Transport , Water Financing through the Initiative seeks to ensure that its investments will catalyze other funding streams, particularly those from the private-sector, of a greater magnitude.


Any project proponent must prove at least three years of international project development experience; Total project duration of less than five years;


Cost-effectiveness, ability to partially self-fund the project or otherwise attract third-party financing, replicability, effective integration with national development policy and planning, and project sustainability with capacity building in the target region and sector.


The selection process for projects is based on a two-step procedure. The first step consists in evaluating the project outlines submitted to the Programme Office.

Second step of the procedure- The Ministry for Environment, Nature Conservation and Nuclear Safety decide on the applications in a final review based on the initial submission.


No information


€120 million per year [€371 million to date]





December 2011


International Climate Initiative homepage ICI application; ICI - UNFCCC page



December 2011

INTERNATIONAL FOREST CARBON INITIATIVE (IFCI)


1 Name of Financing Source International Forest Carbon Initiative (IFCI)

2 Sponsoring Organization The Initiative is jointly administered by the Australian Department of Climate Change and Energy Efficiency (DCCEE) and AusAID

3 Address

The Department of Climate Change and Energy Efficiency 2 Constitution Ave Canberra ACT 2600 Postal address GPO Box 854 Canberra ACT 2601 Australia


[email protected]

5 Objectives

Undertaking practical demonstration activities to show how REDD+ can be included in a post-2012 global climate change agreement.

Increasing international forest carbon monitoring and accounting capacity.

Supporting international efforts to develop market-based approaches to REDD+.

6 Region/Country Focus Indonesia and Papua New Guinea

7 Sector Focus Mitigation REDD


9 Type of Funding Support (e.g., loans, grants, etc.) Grants


The initiative is jointly managed by the Australian Government’s Department of Climate Change and Energy Efficiency (DCCEE) and AusAID. Decisions regarding fund disbursement are made jointly, in consultation with partner governments and other donors, as appropriate.

Program management for the Indonesia and Papua


December 2011

New Guinea – Australia Forest Carbon Partnerships is handled by Australia’s Jakarta Embassy and Port Moresby High Commission, respectively.


12


The following activities are supported (classified as approved and disbursed) up to August 2010:

Purchase of historic satellite data from regional archives, data processing and management, and operation of a regional hub contributing to the global forest carbon monitoring program as part of the GEO Forest Carbon Tracking.

Research partnership to help meet the need for further research on policy and technical issues associated with REDD. It is based on assisting, collecting and disseminating lessons learned to inform the design and implementation of REDD activities internationally.

Funding supports for non-government organisations to develop concepts for REDD demonstration activities.

Program assists countries in the Asia-Pacific region to increase their capacity to manage forests sustainably to reduce deforestation and forest degradation.

Management and program administration of Australia’s IFCI.

Practical REDD demonstration activity

National Climate Change Conferences and placement of technical advisors.


Funding will support projects in selected developing countries (particularly, but not exclusively, in Indonesia and Papua New Guinea). Indonesia is a key partner country for the IFCI and is the site of several major initiatives including the Kalimantan Forests and Climate Partnership. The other key partner country is Papua New Guinea, with support through multilateral and other global activities.



December 2011


16 Procedures for Fund Disbursement No information


USD 47.60 million have been disbursed up to August 2010

18 Funding Limit for Individual Projects No information

19 Monitoring & Evaluation Procedures No information


International Forest Carbon Initiative, Department of Climate Change, Australian Government.http://www.climatechange.gov.au/government/initiatives/international-forest-carbon-initiative.aspx

AusAID http://www.ausaid.gov.au/hottopics/topic.cfm?ID=4755_6308_104_9400_7292

International Forest Carbon Initiative Concept Development Grants. http://www.ausaid.gov.au/keyaid/mitigation.cfm

Australia's survey of REDD+ financing.http://www.oslocfc2010.no/documentslinks.cfm



December 2011

JAPAN BANK FOR INTERNATIONAL DEVELOPMENT (JBIC)


1 Name of Financing Source Japan Bank for International Development (JBIC)

2 Sponsoring Organization Japan Finance Corporation (JFC)

3 Address 4-1 Ohtemachi 1-chome, Chiyoda-ku, Tokyo 100-8144, Japan


Capital Markets and Funding Division [email protected]

5 Objectives

Japan Bank for International Cooperation has a statutory mandate to undertake lending and other operations for the promotion of Japanese exports, imports, and economic activities overseas; for the stability of international financial order; and for economic and social development as well as economic stability in the developing economies.


7 Sector Focus New and renewable energy sources, environmental conservation and improvement, Energy efficient cogeneration projects, use of cleaner natural gas



Range of loans including, export loans, import loans, Overseas investment loans, untied loans, Equity participations, Guarantees, Energy and Natural resource financing, Bank to bank loans


JBIC is the international wing of Japan Finance Corporation (JFC) established on October 1, 2008. The predecessor of JBIC is the International Financial Operations of former JBIC. JFC will take over IFOs in its international wing. However, to maintain international trust and confidence enjoyed by JBIC, the international wing of JFC will continue to use the name of Japan Bank for International Cooperation (JBIC) as it conducts international finance operations.


No information online


December 2011

12



Eligible sectors for export loans: Railways (high-speed, inter-city projects and projects in major cities), water business, biomass fuel production, renewable energy power generation, nuclear power generation, power transformation, transmission and distribution, highly efficient coal-fired power generation, coal gasification, carbon capture and storage (CCS), highly efficient gas-fired power generation and smart grid. Eligible sectors for overseas investment loans: Railways (high-speed, inter-city projects and projects in major cities), water business, renewable energy power generation, nuclear power generation, power transformation, transmission and distribution, highly efficient coal-fired power generation, coal gasification, carbon capture and storage (CCS), smart grid, development of telecommunications network, biomass fuel production, highly efficient gas-fired power generation, aircraft maintenance and sales, M&A activities, etc.


No information



No information


Total Capital: ¥ 1,091billion (March 31, 2011, Account for JBIC Operations in JFC)

Outstanding loan and other financing: ¥ 8,467billion

Outstanding Guarantees: ¥ 2,443.2billion



December 2011


20 Sources for Further Information http://www.jbic.go.jp/en/



December 2011

JICA - JAPAN’S FAST START FINANCE


1 Name of Financing Source Japan’s Fast Start Finance

2 Sponsoring Organization See additional comments section

3 Address


5 Objectives


7 Sector Focus

8 Technology Focus




12






17 Size of the Funding source


December 2011

(Annual or Total)





Japan’s Fast Start Finance replaces the Hatoyama Initiative and the earlier Cool Earth Partnership.

Japan’s Fast Start Finance is not managed as a distinct fund. Rather, it covers all of Japan's activities relating to climate change, and involves several agencies across both public and private sectors. Rather, it covers all of Japan's activities relating to climate change, and involves several agencies across both public and private sectors.

JICA - the Japanese International Cooperation Agency

JBIC - the Japanese Bank for International Cooperation

NEXI - the Nippon Export and Investment Insurance agency, which provides trade insurance

private sector financial institutions and investors

A significant share of Japan’s financing is also directed through multilateral funds and institutions monitored on this website, particularly the Global Environment Facility and the Climate Investment Funds.

As such it is often difficult to gather complete information.


December 2011

JAPAN - THE HATOYAMA INITIATIVE (JAPAN)


1 Name of Financing Source The Hatoyama Initiative (japan)

2 Sponsoring Organization Government of Japan

3 Address Kasumigaseki 2-2-1, Chiyoda-ku, Tokyo 100-8919 Japan


Japanese Ministry of Foreign Affairs [email protected]

5 Objectives

Assistance will be provided to developing countries that are already making efforts to reduce greenhouse gas emissions to enable them to achieve economic growth in ways that will contribute to climate stability, on the basis of policy consultations between Japan and those countries.


7 Sector Focus Mitigation and Adaptation



Grant , Loan , ODA , Technical assistance


The Initiative is coordinated by the Japanese Ministry of Finance. The partnership is governed by a five ministerial meeting, composed of the Chief Cabinet Secretary, Minister for Foreign Affairs, Minister for Economy, Trade and Industry, Minister for Environment, and Minister for Finance. It meets on an irregular basis, on average once a month. The Ministry of Foreign Affairs, Japan has established an Experts' Panel on Development Corporation in the Field of Climate Change to guide the development of the Partnership. This Panel consisted of Japanese academic experts, whilst representatives of other ministries and agencies participate as observers in the discussions.

11 Proposal/Application


December 2011

Requirements

12


Assistance for adaptation projects and improved access to clean energy may include adaptation planning, forestry, rural electrification research, drought management, and co-benefit approaches are subject to assistance, as well as other project types at the discretion of the Government of Japan. Mitigation assistance in the form of energy savings, increased energy efficiency technologies, and new, clean energy will be eligible for financing through loans and equity financing. The JBIC will assist private sector actors to engage in mitigation efforts in developing countries. This will occur through the International Energy Saving Project and the New Energy and Industrial Technology Development Organization. Financing for energy saving and alternative energy in developing countries could be possible through GOJ subsidies. Cool Earth mitigation funds will also support Japanese companies engaged in mitigation projects to assist investment, export and lending to developing countries.

13 Eligibility Criteria Developing countries in consultation with Government of Japan (some private sector actors may also be considered).



Country involvement will occur via bilateral channels. The expected process of cooperation will be as follows: 1. Bilateral negotiations to agree on concept. 2. A bilateral memorandum of understanding on a post-Kyoto strategy. 3. Preparation of a country strategy paper, which should respect national ownership and complement the Paris Declaration agenda.


Disbursement of funds is dependent on bilateral policy consultations with Japan, with the intent of reaching a common understanding of policies regarding climate change (e.g. reducing greenhouse gas emissions and achieving economic growth in a way that will contribute to climate stability.)


December 2011


US$10 billion for next 5 years


There is no minimum or maximum amount of assistance.



http://www.mofa.go.jp/policy/economy/wef/2008/mechanism.html

http://www.kyomecha.org/pdf/kickoff_cool.pdf




December 2011

KFW - KREDITANSTALT FUR WIEDERAUFBAU


1 Name of Financing Source KfW


KfW Bankengruppe or KfW Development bank is the leading organization in Germany for overseas development assistance. DEG is the private sector arm of KfW. KfW and DEG collaborate with an international network including the members of European Development Finance Institutions (EDFI), the European Investment Bank (EIB) and the European Bank for Reconstruction and Development (EBRD).

3 Address

KfW Bankengruppe Palmengartenstrasse 5 - 9 60325 Frankfurt am Main Germany Phone: +49 69 74 31-0 Fax: +49 69 74 31-29 44


Kreditanstalt fur Wiederaufbau , [email protected] Phone: 069 74 31-42 60

5 Objectives

KfW’s aim is to provide development finance assistance to developing and emerging countries, and thus create the basis for sustainable economic growth and a lasting improvement in the living conditions of the local population.

6 Region/Country Focus More than 100 developing and transition countries in Africa, Asia, Latin America and Eastern Europe.

7 Sector Focus

Reducing greenhouse gas emissions and supporting developing countries to adapt to the consequences of climate change touch upon many of the promotional sectors of KfW Entwicklungsbank - from energy and water supplies, urban development and mobility to forestry and agriculture, as well as waste management and the financial sector. In these different sectors, KfW Entwicklungsbank is also involved in the protection of the climate and environment, as well as adaptation to climate change. Its commitment, long-standing experience and well-informed expert knowledge have made KfW Entwicklungsbank into a leading


December 2011

environmental and climate bank of high international standing.



Co-financing , Debt , Equity , Loan , ODA , Other , Risk management , Structured financing , Technical assistance


KfW’s head office is located in Frankfurt, Germany KfW operates on the ground in several focus regions, with representative offices in Brazil, China, Ghana, India, Indonesia, Kenya, Mexico, Peru, the Russian Federation, South Africa, Thailand and Turkey.


The application procedures depend on the product.

12


Mitigation, Agriculture , Energy , Energy Efficiency , Fisheries , Forestry , Industry , Infrastructures , Renewable Energy , Services , Tourism , Transport , Waste Management

13 Eligibility Criteria Financing developing and emerging market countries that contribute to sustainable development goals.

14 Proposal Evaluation Criteria The application procedures depend on the product.

15 When and How to Apply Contact KfW directly


Long-term loans • Currency: euros or US dollars, in certain

cases local currencies • Term: usually between four and ten years • Interest rate: fixed or variable; market

oriented according to project and country risks

• Collateral security: as fixed assets in the country of investment; project-specific arrangement

Guarantees • Mobilization of long-term loans or bonds in

local currency


December 2011

• Reduced exchange-rate risk via loan repayment in local currency

• Risk sharing with local bank Equity capital (through the private sector arm DEG)

• Equity participation in the company in the investment country

• Minority stake • Variable arrangement of the risk

components • In certain cases, voting rights and seat on

the board of the company • Clearly defined exit strategies

Mezzanine finance • Project-specific arrangement • Risk-oriented yield • Subordinated security • Conversion options •


Variable





20 Sources for Further Information [email protected]



December 2011

KFW CHILE - CORFO CREDIT LINE PROGRAM


1 Name of Financing Source CORFO Credit Line Program

2 Sponsoring Organization CORFO, Chilean Economic Development Agency

3 Address CORFO’s Investment and Development Division Moneda 921, office 618, Santiago, Chile


Isabel Aranzaez E-mail: [email protected] www.investchile.com

5 Objectives Two lines of credit offered through commercial banks. These are designed to support the financing of projects which provide cleaner and more efficient production.

6 Region/Country Focus Chile

7 Sector Focus Non conventional renewable energy,

8 Technology Focus

Transmission infrastructure development, geothermal projects in deep wells exploration phase, transfer technology associated to Solar Energy: a CSP and PV plant, Small Hydro (run-of-river).

9 Type of Funding Support (e.g., loans, grants, etc.) Credits



12


NCRE CORFO credit line is designed to support NCRE power generation and transmission projects. For both Non Conventional Renewable Energy (NCRE) and Environmental credit lines, up to 30% may be used as working capital for the operation of the project. Investment Funds financing innovative projects, such us renewable energy, can obtain CORFO credit of up to 300% of the capital.

13 Eligibility Criteria Applies to companies with annual sales of up to US$30 million.


December 2011




Investment Funds which have obtained these CORFO lines of credit must materialize the investment at no less than 30% of the total approved credit and this, within a maximum of 24 months from the date of the contract signature. On average, three months are required to obtain this type of credit



CORFO Environmental Credit: Up to US$5 million per project, with a 30 month grace period and between 3 and 12 years to pay back the total credit, at a fixed rate in UF (Unidades de Fomento) and US dollars.

NCRE CORFO Credit: Up to US$15,700 per project. Fixed interest rate in UF and US$, with payment periods of up to 12 years, and a maximum 36 month grace period.



http://www.cer.gov.cl/wp-content/uploads/downloads/2010/03/RUTA-PREINVERSION-ERNC-CORFO-EN.pdf



December 2011

KFW - FUND SOLUTIONS FOR CLIMATE FINANCE


1 Name of Financing Source Fund Solutions for Climate Finance (KFW & Partners)

2 Sponsoring Organization KfW Bankengruppe

3 Address

KfW Bankengruppe Palmengartenstrasse 5-9 Frankfurt am Main 60325


[email protected]

5 Objectives

The mission of the funds is to contribute, in the form of a public private partnership with a layered risk/return structure, to enhancing energy efficiency and fostering renewable energies in the partner countries.


GGF: Southeast Europe region including Turkey (Albania, Bosnia and Herzegovina, Croatia, the Former Yugoslav Republic of Macedonia, Montenegro, Serbia, Kosovo, and Turkey).

GCPF: Focus on countries which already have a significant industrial basis and a large population like Brazil, Chile, China, India, Indonesia, Mexico, Morocco, Philippines, South Africa, Tunisia, Turkey, Ukraine and Vietnam.

7 Sector Focus Mitigation (Energy Efficiency, Renewable Energy), Technical Assistance/Consultation.



Loan

KfW Structured Funds have a layered risk-return structure in the form of a public-private partnership. The funds are mainly providing long-term financing to local financial institutions in partner countries, which in turn on-lend these funds to SME, private households and municipalities, for them to finance adequate investments. In addition to this, to a limited extend direct financing from the fund’s capital is


December 2011

possible for example for projects in the area of renewable energies.

Refinancing Financial Institutions (local commercial banks, non-bank financial institutions such as microfinance institutions and leasing companies and other selected financial institutions) in providing loans to households, businesses, municipalities and public sector for energy efficiency measures or renewable energy projects. Investments through Financial Institutions will constitute the majority of the funds’ investments.

To a limited extend providing direct financing to Non-Financial Institutions (energy service companies, renewable energy companies or projects, small scale renewable energy and energy efficiency service and supply companies) that meet the energy saving and/or emissions targets.


Private fund managers have been selected in an international tender process. In line with international best practice, they source, prepare and structure the projects for the fund. The managers then present the projects to the investment committee of the respective fund which decides upon the investments based on the policy of the fund. Each fund has a Board of Directors as its legal representative for steering the fund itself based on the legal framework of according to Luxemburg law and the constitutional framework as agreed with its respective shareholders.

The Fund Manager for the GGF is the Oppenheim Asset Management, Luxemburg. The Fund Manager for the GCPF is Deutsche Bank, Germany.


Application Procedures depend on the particular configuration and programme of the partner financial institutions. Audit types differ concerning applicable segment (household, SME, Industrial, municipal).

12 Eligible Projects/Programs (whether only for soft items such as capacity building or

Info in type of funding section


December 2011

policy advice, etc, or also for hard items, such as for plant and equipment) or Organizations



15 When and How to Apply The contact and entry point for the financial institutions are the respective fund managers.



Green for Growth Fund (GGF): EUR 400 million over the next 5 years; Global Climate Partnership Fund (GCPF): up to USD 500 million for international climate protection in the next five years




Green Growth Fund (GGF)

KfW Climate Change

KfW Climate Fund Press Release

KfW Financial System Development




December 2011

OPIC - OVERSEAS PRIVATE INVESTMENT CORPORATION


1 Name of Financing Source OPIC - Overseas Private Investment Corporation

2 Sponsoring Organization United States Government

3 Address

Overseas Private Investment Corporation Information Officer, Office of External Affairs 1100 New York Avenue, NW Washington, D.C. 20527


[email protected]

5 Objectives

It mobilizes private capital to help solve critical world challenges and in doing so, advances U.S. foreign policy. Because OPIC works with the U.S. private sector, it helps U.S. businesses gain footholds in emerging markets catalyzing revenues, jobs and growth opportunities both at home and abroad.


OPIC services are available for new and expanding business enterprises in more than 150 countries worldwide mostly developing countries and emerging markets.

7 Sector Focus

8 Technology Focus Various


medium- to long-term funding through direct loans and loan guaranties



Following OPIC’s preliminary review and approval, the sponsors may be asked to provide additional economic, financial and technical information. In some instances, OPIC will issue a retainer letter which may indicate that OPIC will need to retain independent consultants to assist in its analysis and review. Such information is essentially that which any board of directors would need before committing its company to an investment. Guidelines for formal applications will be provided, though the type of information to be supplied will vary with the nature of the proposed


December 2011

business.

12



In addition to the eligibility requirements indicated in Investor Screening (http://www.opic.gov/doing-business/investor-screener), all projects or transactions considered for OPIC financing must be commercially and financially sound. They must be within the demonstrated competence of the proposed management, which must have a proven record of success in the same, or a closely related business, as well as a significant continuing financial risk in the enterprise. Experience indicates that an adequate level of equity contribution is essential for a project to succeed. Investors must be willing to establish sound debt-to-equity relationships that will not jeopardize the success of the project through excessive leverage. In general, OPIC looks for a debt-to-equity ratio in the range of 60/40, although the financial structure will vary with the nature of a specific business and by the variability of expected cash flows. The investor’s financial plan should provide for all costs, including feasibility studies; organizational expenses; land; construction; machinery; equipment; training and market development expenses; interest payments during construction; start-up expenses and initial operating losses; legal expenses and loan fees; and adequate working capital. OPIC’s Small and Medium-Enterprise Financing is available for businesses with annual revenues under $250 million.

14 Proposal Evaluation Criteria Priority is given to those projects which best meet OPIC’s developmental and foreign policy mandate.

15 When and How to Apply An application package requires the completion and submission of the following forms:

Form 115 - Application for Financing must be


December 2011

completed and submitted through the online application process. Only online applications will be reviewed.

Sponsor Disclosure Report — Form 129

In addition to the above forms, you must also submit a business plan. OPIC strongly recommends that investors contact an OPIC representative to discuss his or her project proposal prior to submitting an application package for OPIC financing.


OPIC recognizes that possible cost overruns and early operating problems may occur, despite careful planning and an allowance for contingencies in the financial plan. Therefore, OPIC, like other limited recourse lenders, normally requires that the principal sponsors enter into an agreement that guaranties the OPIC loan, the completion of the project, the company’s debt service, and cost overruns prior to project completion. Project completion is defined to include certain financial, legal and operating tests, as well as physical completion. The sponsors must have the financial capability to perform their obligations under this agreement. The repayment schedule of a direct or guarantied loan will be designed taking into consideration the purpose of the loan and the projected level of cash flows to be generated in the transaction. The cash flows must be sufficient to meet interest and principal payments, and to provide for an adequate return to equity investors. The terms of such loans will typically provide for a final maturity of three to 15 years, including a suitable grace period during which only interest is payable.


To date, OPIC projects have generated $74 billion in U.S. exports and supported more than 275,000 American jobs.



20 Sources for Further Information http://www.opic.gov/


December 2011



December 2011

USAID – GLOBAL CLIMATE CHANGE INITIATIVE


1 Name of Financing Source USAID – Global Climate Change Initiative

2 Sponsoring Organization US Government

3 Address

Information centre U.S. Agency for International Development Ronald Reagan Building Washington, D.C. 20523-1000


Online form available for contact

5 Objectives

1. Helps promote country ownership 2. Promotes climate solutions that spur economic

growth 3. Ensuring sustainability of economic growth

gains through actions that protect investments 4. Strengthening governance and inclusive

planning processes for climate resilience 5. Game-changing investments

6 Region/Country Focus Countries vulnerable to climate change impacts

7 Sector Focus carbon sequestering and carbon accounting, sustainable management of landscapes

8 Technology Focus Renewable energy technologies, energy efficient end use technologies


The Global Climate Change Initiative (GCCI) is broken down into three pillars:

• Adaptation: Helping vulnerable countries and communities adapt and build resilience to the impacts of climate change, particularly the least developed and small island nations that will be the most severely affected;

• Clean Energy: Hastening the world's transition to a low-carbon economy through the development and dissemination of clean energy technologies; and,

• Sustainable Landscapes: Increasing the


December 2011

sequestration of carbon stored in trees, plants, and soils, and helping countries to slow, halt, and reverse deforestation.



No information

12


Supporting the development and implementation of Low Emission Development Strategies (LEDS), supporting legal and policy frameworks necessary for energy efficiency, enabling the transfer and adoption of renewable energy technology, such as solar and wind, reforming energy markets to ensure more transparency and encourage investment, and building national and private sector capacity to monitor and manage GHG emissions.






The U.S. Government's international climate change financing in FY 2010 was a total of $1.7 billion, consisting of $1.3 billion of Congressionally appropriated assistance and $400 million of development finance and export credit. The U.S. Government's FY 2011 budget request included $1.9 billion in assistance and additional support from development finance and export credit. Within that total, core funding to the Global Climate Change Initiative through USAID, the Department of the Treasury, and the Department of State increased from $316 million in FY 2009 to approximately $1 billion in FY 2010, and the FY 2011 request to Congress is $1.3 billion.




December 2011


http://www.usaid.gov/our_work/environment/climate/funding.html http://www.foreignassistance.gov/Initiative_GCC_2011.aspx?FY=2011



December 2011

C. PRIVATE FINANCING SOURCES


December 2011

AFRICA ENTERPRISE CHALLENGE FUND: RENEWABLE ENERGY & ADAPTATION TO CLIMATE TECHNOLOGIES


1 Name of Financing Source

Africa Enterprise Challenge Fund: Renewable Energy and Adaptation to Climate Technologies (REACT) Hosted by the Alliance for a Green Revolution in Africa (AGRA)

2 Address

The Africa Enterprise Challenge Fund Equatorial Fidelity Centre, Opposite New Safaricom House, Behind Shell Petrol station 3rd Floor Waiyaki Way Nairobi P O Box 13459-00100 GPO Nairobi - Kenya


Ms. Anjali Saini Africa Enterprise Challenge Fund [email protected]

4 Objectives The aim of the AECF is to encourage private sector companies to compete for investment support for their new and innovative business ideas.

5 Region/Country Focus One or more of the East African Community (EAC) countries: Burundi, Kenya, Rwanda, Tanzania and Uganda.

6 Sector Focus

The AECF REACT will support private sector investment in the following: Increased access to low cost, clean energy for rural businesses and households. This includes cost effective renewable power, commercially viable renewable fuels and other clean energy alternatives. Products and services that help smallholder farmers adapt to climate change (eg, drought resistant seeds and technologies or weather early warning systems that increase resilience and reduce vulnerability). Financial services that increase access to finance for low cost clean energy and climate resilient technologies or catalyse financial solutions such as


December 2011

weather insurance for smallholder farmers.

7 Technology Focus Innovative energy efficient technologies and end-use renewables


The first stage is the submission of an initial application form where applicatns have the chance to explain the business idea and the company. Applicants must prove the project’s commercial viability but also its potential rural development impact. The initial application will be assessed by a small team of assessors and the Fund Manager who will shortlist the best applications and forward them to the AECF's independent Investment Committee (IC). The IC will then decide which applications will progress to the second (business plan) stage. The second stage is the preparation and submission of a detailed business plan, which applicants will be asked to provide if the project has been selected to move forward by the Investment Committee. During this stage AECF will also engage with and visit all of the companies preparing business plans. Proposals that are considered to have the greatest positive impact on the rural poor in Africa will be invited to present a detailed business plan for this stage of the competition. The final business plans are then presented to the independent Investment Committee for final decisions.

10

Eligible Projects, Programs, (whether only for soft items such as capacity building or policy advice, etc, or also for hard items, such as for plants and equipments) or Organizations


Open to for-profit firms with business ideas implemented in the East African Community of Burundi, Kenya, Rwanda, Tanzania and Uganda. Proposals must demonstrate a positive impact on the rural poor through increased incomes, employment and productivity or reduced costs. Applicant companies are required to match the AECF REACT funding with an amount equal to or greater than 50% of the total cost of the project. Projects with a greater repayable grant percentage will have a greater chance of eventual selection.


December 2011

12 When and How to Apply The closing date for the first round of REACT applications was 31 January 2011. Round 2 of REACT funding will open 15 October 2011


14 Size of Fund


Co-funding from $250,000 to $1.5 million per project

16 If Loan, Terms and Conditions for Repayment

co-funded with grants and interest-free repayable grants



AECF REACT homepage AECF REACT application http://www.climatefinanceoptions.org/cfo/node/226


For REACT Round 2 there will be strong receptivity to proposals that: (i) demonstrate both adaptation together with low carbon benefits and/or adaptation with underpinning financial services; and (ii) take place in particularly vulnerable ecological zones.


December 2011

ATP PENSION FUND


1 Name of Financing Source ATP Pension Fund

2 Address Kongens Vænge 8 DK-3400 Hillerød Denmark


Lars Rohde CEO [email protected]

4 Objectives Ensure the highest pension benefits attainable, while avoiding needless risks.

5 Region/Country Focus Denmark

6 Sector Focus

7 Technology Focus renewable energy infrastructure and technology, such as solar wind and hydro, as well as emerging technologies, such as biofuels and biomass

9 Proposal/Application Requirements N/A

10


The Group is responsible for the operation and development of ATP Livslang Pension and Supplerende Pension (SUPP). They pay pensions to more than 675,000 pensioners and administer contributions for approx. 4.5 million members and clients. ATP's investment section manages their assets and is responsible for their general investment management, risk surveillance, and portfolio management.

11 Eligibility Criteria N/A


13 Procedures for Fund Disbursement N/A

14 Size of Fund total assets of more than EUR 66 billion


December 2011

15 Funding Limit for Individual Projects N/A

16 If Loan, Terms and Conditions for Repayment N/A

17 Monitoring & Evaluation Procedures N/A

18 Sources for Further Information http://www.atp.dk


Denmark’s largest Pension Fund The investment department is responsible for managing assets worth more than DKK 400bn. We invest in bonds, stocks, real estate, infrastructure and other investment assets.


December 2011

CALIFORNIA PUBLIC EMPLOYEES’ RETIREMENT SYSTEM (CALPERS)


1 Name of Financing Source California Public Employees’ Retirement System (CalPERS)

2 Address

California Public Employees’ Retirement System External Affairs Branch • Office of Public Affairs 400 Q Street, Sacramento, CA 95811 www.calpers.ca.gov


Anne Stausboll Chief Executive Officer

4 Objectives

The goals of CalPERS’ Environmental Investment Initiatives are to achieve positive financial returns, while fostering energy savings, sustainable growth and sound environmental practices, including: AIM Environmental Technology Program: CalPERS Environmental Technology Program Board targets investments in environmental technology solutions that are more efficient and less polluting than existing technologies such as recycling; minimizing the use of natural resources; and reducing emissions, refuse, and contamination to air, water, and land. The primary objective of the Program is to achieve attractive investment returns over the long-term and help catalyze clean technologies. Corporate Governance Environmental Strategy: CalPERS Board has adopted a plan to shine a light on corporate environmental liabilities, improve transparency and timely disclosure of environmental impacts, and improving environmental data transparency. CalPERS Public Market Environmental Managers: CalPERS Board is investing in stock portfolios that use environmental screens.

5 Region/Country Focus The United States

6 Sector Focus

The real estate environmental strategy's focus is to generate attractive investment returns while adopting environmental and green building technologies in areas, such as energy efficiency, water conservation, waste stream management and


December 2011

indoor air quality, within the overall real estate portfolio. Increasing their investments in California infrastructure, renewable power generation, power transmission, energy pipelines, and real estate.

7 Technology Focus

CalPERS is building a "best of breed," diversified portfolio of clean technology-focused investments by investing across stages, strategies, geographies, and structures. We define environmental or clean technologies as solutions that are more efficient and less polluting than existing or legacy products, services, or technologies. Areas of particular interest include, but are not limited to, alternative and renewable energy (clean energy), water technologies (clean water), advanced materials or nanotechnology (clean material), air purification technologies (clean air), and transitional infrastructure opportunities.


10


Retirement, health, and related financial programs and benefit


In order to be included in the portfolio, companies must derive a material portion of their revenues from low-carbon energy production including wind, solar, biofuels and other alternative energy; water, waste and pollution control; energy efficiency and management including building insulation, fuel cells and energy storage; and carbon trading and other capital deployment and financial products.



14 Size of Fund USD 235 billion in assets (invest portfolio market value as of August 31st 2011)


16 If Loan, Terms and N/A


December 2011

Conditions for Repayment


18 Sources for Further Information http://www.calpers.ca.gov

19 Additional Comments The Californian public sector funds The largest public pension fund in the United States


December 2011

CAPITAL MARKET CLIMATE INITIATIVE (CMCI)


1 Name of Financing Source Capital Market Climate Initiative (CMCI)

2 Address

Department of Energy & Climate Change (DECC) 3 Whitehall Place London SW1A 2AW


Tamsin Ballard ([email protected]) Sarah Miller ([email protected]) David Willis ([email protected]) Aled Jones (Working Group 1) ([email protected]) Dominic Waughray (Working Group 2) ([email protected])

4 Objectives

The CMCI aims to help unlock the private sector’s ability to help meet the $100 billion of new green investment required annually by 2020 to tackle climate change in developing countries. Bringing together experts from the financial and public sector to help deliver private climate financing at scale in developing countries by: identifying deliverable propositions to mobile private capital; developing a base of evidence build developing country interest and support; and building private sector confidence in the feasibility of the task and opportunities

5 Region/Country Focus United Kingdom

6 Sector Focus Low carbon energy, transport and land use / forestry.



10


The project has two work streams, one developing a ‘toolkit’ of strategies that can be used to mobilize private capital in developing countries, the other supporting demonstration capital mobilization projects in four developing countries. Target implementation is for COP 18 in 2012.


December 2011




14 Size of Fund





http://www.decc.gov.uk/en/content/cms/news/pn_098/pn_098.aspx http://europa.eu/epc/pdf/workshop/5-3_cmci_overview_en.pdf


CMCI is a UK-led initiative spearheaded by Minister of State, Gregory Barker. The Steering Group and two Working Groups currently comprises of key decision makers from the UK government, institutional investors, investment banks, insurance companies, stock exchanges, credit rating agency, Development Finance Institutions, think tanks and professional services.


December 2011

CHINA ENVIRONMENT FUND (CEF)


1 Name of Financing Source China Environment Fund (CEF)


Invested by key development financial institutions, renowned family offices, major financial institutions and strategic multinational corporations/Fortune 500 companies.

3 Address

Head Office A2302, SP Tower Tsinghua Science Park Beijing, China 100084


[email protected] cefund.com

5 Objectives China Environment Fund is the first series of funds in China with a focus in cleantech and environment related investments.

6 Region/Country Focus China

7 Sector Focus Environmental protection, air an water pollution control, energy savings, renewable energy

8 Technology Focus The current broad concept of cleantech

9 Type of Funding Support (e.g., loans, grants, etc.) Environment Venture Capital investment

10 Management/Governance Managed by Tsing Capital

11 Proposal/Application Requirements Not applicable

12


Not applicable

13 Eligibility Criteria Not applicable

14 Proposal Evaluation Criteria Not applicable


December 2011

15 When and How to Apply Not applicable

16 Procedures for Fund Disbursement Not applicable


China Environment Fund has a series of three funds that amounts to USD 300 million

18 Funding Limit for Individual Projects No information available

19 Monitoring & Evaluation Procedures No information available


http://www.cefund.com/about_china_environment_fund.html http://www.crunchbase.com/financial-organization/china-environmental-fund

21 Additional Comments CEF I (2002), CEF II (2004) and CEF III


December 2011

FIDEME AND EUROFIDEME 2


1 Name of Financing Source FIDEME and EUROFIDEME 2


3 Address Natixis Environnement & Infrastructures, A Natixis subsidiary 47, quai d’Austerlitz - 75648 Paris Cedex 13 France


Philippe Germa Managing Director – Natixis Environnement & Infrastructures email: [email protected] http://www.nei-fideme.com/

5 Objectives

EUROFIDEME 2 invests in Greenfield assets and positions itself as a partner for medium-sized renewable energy project developers including:

• Firms that develop projects with defined assets in their portfolio

• Developers having a portfolio of several projects in different development stages (development, construction, operation)

Following on its predecessor FIDEME success, EUROFIDEME 2's objective is to obtain stable returns by investing in sustainable development projects.

6 Region/Country Focus The fund's geographic target is the euro area mainly focusing in France, Italy and Spain. France remaining as the main market.

7 Sector Focus EUROFIDEME 2 invests in European renewable power generation projects primarily in solar photovoltaic, wind, hydro and biomass sectors

8 Technology Focus

EUROFIDEME 2 will only invest in projects using mature and reliable technologies such as:

• Onshore wind • Solar photovoltaic • Biomass-to-energy


December 2011

• Others (hydropower, geothermal and solar thermal)



The management team of EUROFIDEME 2 manages the investments made during the first generation fund FIDEME Natixis Environnement & Infrastructures, is the portfolio management company. It is a management company that structures, places and manages investment funds dedicated to equity and subordinated-debt project finance.


12






The two main types of financial products that are used by the fund are:

• Subordinated debt: subordinated bonds linked to a possible conversion into shares or bonds with share warrants attached

• Equity financing in exchange for minority stakes


FIDEME manages €45m in funds. EUROFIDEME 2: To date, the management team has identified over 70 projects with a total potential investment close to €200m. As of today, EUROFIDEME 2 has closed four investments (of which two are being disinvested) in France for a total of €26m. The Fund commitments at the start of 2010 are


December 2011

around €54m with a target size of €250m to be reached by March 2012


EUROFIDEME 2 investment instruments are convertible bonds and minority equity stakes in project companies and developers with an investment amount of €3-20 million per transaction.



http://www.eurofideme2.com http://www.natixis.com/natixis/upload/docs/application/pdf/2011-10/nei_plaquette_fideme_va_2011-10-21_12-26-22_147.pdf

21 Additional Comments Natixis Environment & Infrastructures is launching a new fund along the same lines as FIDEME: EURO FIDEME 2.


December 2011

FE CLEAN ENERGY GROUP INC.


1 Name of Financing Source FE Clean Energy Group Inc.

2 Address FE Clean Energy Group Inc 22 Thorndal Circle South Darien, Connecticut 06820

3 Key Contact (Name, e-Mail, and Website) [email protected]

4 Objectives

FE Clean Energy Group Inc. focuses on investments in the middle market energy efficiency services sector and in return- driven sustainable development.

5 Region/Country Focus Emerging markets in Asia, Central and Eastern Europe and Latin America.

6 Sector Focus Energy Efficiency, Emissions reduction, Renewable energy and reliable power services to the industrial, commercial and public sectors.

7 Technology Focus Renewable power generation, biofuels

9 Proposal/Application Requirements No detailed information provided

10


No details provided



For a project to be considered for investment by FE Clean Energy Group, submit business plan to region heads. The names and email addresses of the contacts for business plan submission are available online on company website.


14 Size of Fund


December 2011




18 Sources for Further Information http://www.fecleanenergy.com/



December 2011

INSTITUTIONAL INVESTORS GROUP ON CLIMATE CHANGE (IIGCC)


1 Name of Financing Source Institutional Investors Group on Climate Change (IIGCC)

2 Address

IIGCC c/o The Climate Group Second Floor, Riverside Building County Hall Belvedere Road London SE1 7PB


Stephanie Pfeifer Executive Director [email protected] www.iigcc.org

4 Objectives

One of the key objectives of the group is to catalyse greater investment in a low carbon economy by bringing investors together to use their collective influence with companies, policymakers and investors. It will continue to survey investors (including in collaboration with Mercer) on how they incorporate climate change into their long-term investment strategies


6 Sector Focus Climate Change for European investors

7 Technology Focus Cleaner and renewable energy, energy efficiency and decarbonisation


10


N/A

11 Eligibility Criteria IIGCC membership is open to any institutional investor, including pension funds and asset managers, who align with the IIGCC’s overall aim,


December 2011

i.e. to ensure that the risks and opportunities from climate change are addressed in investment practices and decisions and to engage with policymakers, companies and investors to accelerate the shift to a low carbon economy.



14 Size of Fund €6 trillion of assets





www.iigcc.org http://www.top1000funds.com/latest-news/latest-news/pension-funds-to-sustain-climate-change-pressure.html


The IIGCC currently has over 70 members, including some of the largest pension funds and asset managers in Europe, The IIGCC encourages:

Policymakers to provide policy frameworks that facilitate the move to a low carbon economy and are consistent with long-term investment objectives.

Investors to take on a pro-active approach on climate change through adapting their own investment activities and processes in order to enhance and preserve long-term investment values.

Companies to standardise and improve disclosure on climate change and improve their performance.


December 2011

INVESTOR NETWORK ON CLIMATE RISK (MANAGED BY CERES)


1 Name of Financing Source Investor Network on Climate Risk (Managed by Ceres)

2 Address

Investor Network on Climate Risk (INCR), a project of Ceres 99 Chauncy Street, 6th Floor Boston, MA 02111


Sean Pears [email protected] www.ceres.org

4 Objectives

Identify opportunities and risks in climate change, tackle the policy and governance issues that impede investor progress towards more sustainable capital markets

5 Region/Country Focus 90+ USA institutions

6 Sector Focus Sustainability challenges such as Global climate change and Water scarcity

7 Technology Focus

INCR has supported company dialogs on investor concerns ranging from sustainable homebuilding practices to disposal of coal ash. INCR also engages in industry groups such as Electric power, insurance, Oil and gas, real estate, transportation and Water. INCR also works with federal and state policymakers to strengthen regional and national legislation that would reduce carbon emissions and other pollution, protect water supplies and ecosystems and unlock financing for low-carbon energy sources and technologies like wind, solar and biofuels.


10

Eligible Projects, Programs, (whether only for soft items such as capacity building or policy advice, etc, or also for hard items, such as for plants and equipments) or

N/A


December 2011

Organizations

11 Eligibility Criteria N/A

12 When and How to Apply For details on how to join INCR, contact Susan Burrows, Ceres Senior Manager, Investor Relations, at [email protected]


14 Size of Fund USD 10 trillion





www.incr.com www.ceres.org


INCR is an active group of investors, engaging with corporations, entire industries and local, state and national government to build create a more sustainable global economy that minimizes impacts on communities and the environment and creates long-term shareholder value. The Investor Network on Climate Risk (INCR) has almost 100 members, (including CalPERS, CalSTRS, various US state retirement boards, state treasurers and comptrollers, Deutsche Asset Management, Blackrock Financial, TIAA-CREF, State Street Global Advisors and Prudential Investment Management


December 2011

INVESTOR GROUP ON CLIMATE CHANGE AUSTRALIA/NEW ZEALAND (IGCC)


1 Name of Financing Source Investor Group on Climate Change Australia/New Zealand (IGCC)

2 Address

The IGCC Secretariat PO Box H26 Australia Square NSW 1215 Level 9, 255 George Street Sydney NSW

3 Key Contact (Name, e-Mail, and Website) Email: [email protected]

4 Objectives

The IGCC aims to encourage government policies and investment practices that address the risks and opportunities of climate change, for the ultimate benefit of superannuants and unit holders. We aim to: Raise awareness of the potential impacts, both positive and negative, resulting from climate change to the investment industry, corporate, government and community sectors; Encourage best practices approaches to facilitate the inclusion of the impacts of climate change in investment analysis by the investment industry; and Provide information to assist the investment industry to understand and incorporate climate change into the investment decision.

5 Region/Country Focus Australia and New Zealand

6 Sector Focus Climate Change (Low carbon economy, emission trading etc)

7 Technology Focus No focus mentioned


10

Eligible Projects, Programs, (whether only for soft items such as capacity building or policy advice, etc, or also for hard items, such as for

N/A


December 2011

plants and equipments) or Organizations


Members are required to contribute to the mission of the IGCC by: Participating in the IGCC by attending meetings, participating on a committee and supporting activities; Demonstrating progress incorporating the risks and opportunities associated with climate change into investment decisions or investment advice as appropriate, and into business operations; Assisting to raise awareness of the risks and opportunities associated with climate change in the investment industry, corporate, government and community sectors; and Encouraging other organisations within the broader investment industry to join the IGCC and support the IGCC activities.


Membership of the IGCC is open to investors operating in Australia and New Zealand including superannuation funds, insurance companies, fund managers and other financial services providers, such as asset consultants, brokers and investment industry associations. To become a member of the IGCC organisations that are not industry associations need to: Complete the Application For Membership Form including signing the Statement of Commitment. Pay the Annual Membership Fee. The fees will be used to support the range of IGCC activities. To become a member of the IGCC industry associations need to: Complete the Application For Industry Association Membership Form including signing the Statement of Commitment.


14 Size of Fund AUS 700bn



December 2011




www.igcc.org.au http://www.iigcc.org/__data/assets/pdf_file/0015/15153/Global-Investor-Statement.pdf



December 2011

LONG-TERM INVESTORS CLUB


1 Name of Financing Source Long-term Investors Club

2 Address

The Caisse des Dépots, the French investment group, with three other European public financial institutions – Cassa Depositi e Prestiti, KfW Bankengruppe and the European Investment Bank


Anne Haudry de Soucy General Secretary of The Long-Term Investors Club anne.de-soucy(at)ltic.org

4 Objectives

The aim of the group is to address long-term challenges. The Club aims to bring together major worldwide institutions including sovereign wealth funds, public sector retirement funds, private sector pension funds, economists, financial policy makers, and regulators to assert their common identity as long-term investors, to open the way to greater cooperation between us all and to deliver the message that fostering the right conditions for long-term investment will be an important element in promoting sustainable growth and economic stability.


6 Sector Focus

Infrastructure for mobility Climate change/ energy efficiency Renewable energy Urban development.

7 Technology Focus No information


10

Eligible Projects, Programs, (whether only for soft items such as capacity building or policy advice, etc, or also for hard items, such as for plants and equipments) or

N/A


December 2011

Organizations


Long-term investors are defined as financial institutions which have low or no short to medium-term liability obligations, such as public financial institutions, sovereign funds and certain pension funds and insurance companies.



14 Size of Fund Total assets of USD 3 trillion.





http://www.ltic.org/ OECD Observer, No. 279 May 2010

19 Additional Comments The group is working with other financial institutions from Europe, Asian and the Gulf.


December 2011

MMA RENEWABLE VENTURES (MMARV)


1 Name of Financing Source MMA Renewable Ventures (MMARV)

2 Address Baltimore Office 621 E. Pratt St., Ste 300 Baltimore, MD 21202


4 Objectives

Their mission is to deliver exceptional investment opportunities while providing competitively priced renewable energy and energy efficiency products. MMA Renewable Ventures coordinates the financing, installation, and operation of renewable energy systems and energy efficiency projects.

5 Region/Country Focus United States

6 Sector Focus Renewable energy and Energy efficiency products.

7 Technology Focus Innovation in sustainable energy and energy conservation industry

9 Proposal/Application Requirements Contact MMARV at first instance

10


MMARV provides following support: • Identify qualified customers (minimum 250-

300 kW system for solar, 3 MW for wind) • Perform site evaluation and initiate system

approval process • Source and install equipment • Provide finished, fully operational system • Provide ongoing operations and maintenance

services under contract


Qualifications for PPA: Minimum 250-300 kW system for solar and 3

MW for wind)

• Customer’s ability and willingness to sign long-term contract (10-25 years)

• Investment grade credit rating


December 2011

• Sufficient financial incentives must be available in state of installation (e.g. state rebates)

• Appropriate location available for system installation

• Sufficient renewable energy supplies (wind, sun or biomass material)

12 When and How to Apply No information provided


14 Size of Fund Pipeline of over $500 million clean energy investments.

15 Funding Limit for Individual Projects No information provided


MMARV finances, owns and operates the energy efficiency assets on behalf of its customers. Payments are made on the savings made at an agreed rate. At the end of the contract, the customer can choose to renew the contract or buy the assets.

17 Monitoring & Evaluation Procedures No information provided

18 Sources for Further Information http://www.mmarenewableventures.com/

19 Additional Comments a wholly owned subsidiary of MuniMae (OTC:MMAB.PK)


December 2011

NEFCO CARBON FINANCE FUND


1 Name of Financing Source NEFCO Carbon Finance Funds

2 Sponsoring Organization The Nordic Environment Finance Corporation (NEFCO) on behalf of 17 public and private sector investors.

3 Address

NEFCO Funds c/o Nordic Environment Finance Corporation (NEFCO) P.O. Box 249 FI-00171 Helsinki FINLAND


Mr Kari Hämekoski NEFCO Manager [email protected]

5 Objectives To provide loans and makes capital investments in order to generate positive environmental effects of interest to the Nordic region.

6 Region/Country Focus Eastern Europe, Asia and Africa

7 Sector Focus Adaptation , Mitigation, Energy , Energy Efficiency , Fuel Switching , Fugitive Methane , Industry , Renewable Energy , Waste Management



Carbon finance , Grant , Technical assistance

10 Management/Governance NEFCO acts as the Fund Manager under the authority of the Investment Committees of the respective funds.


First, a Project Idea Note (PIN) should be submitted to the Carbon Finance and Funds Unit. On the basis of PIN, an initial screening of the project will be performed. Afterwards, if the project is considered eligible, a more detailed financial, technical and environmental analysis will have to be submitted.


December 2011

12


NEFCO supports a wide range of GHG mitigation activities in the following fields:

Renewable Energy (Solar Thermal, Solar Electric, Wind, Biogas, Biomass, Geothermal, Hydropower)

Energy Efficiency (EE Households, EE industry, EE own generation, EE Service, EE Supply side, Energy distribution)

Fuel Switching

Fugitive Methane

Industry

Waste Management (Solid Waste Management, Animal waste, Wastewater treatment)


Projects should be in line with the requirements of the Kyoto Protocol, in particular the fulfillment of the requirements of the JI Supervisory Committee and CDM Executive Board of the UNFCCC Secretariat, and the second trading period of the EU ETS (and subsequent periods)

14 Proposal Evaluation Criteria NEFCO prioritises renewable energy and energy efficiency projects.


Contact NEFCO by telephone or through an online form to enquire if your project is eligible for NEFCO funding. If the project appears relevant to NEFCO, initial clarification on the following aspects is required for initial screening of the project: Name and contact details of your company and the name of the contact person Project details, such as:

• Project location • Project background • Purpose of the project • What does the project include? • Which are the expected environmental

benefits and/or improvements resulting from the project?

• Approximate investment costs • Approximate financing plan


December 2011

• If profitabilty and payback have been calculated, what are the estimates?

Details of the investing company (the applicant) • Current main business areas • Year of establishment • Experience relevant for the project's sector

and country of operation • Turnover, net profit and balance for the last

two years • Information about planned or possible

Nordic participation in or related to the project.



NEFCO manages two carbon facilities, with combined funding resources of up to EUR 150 million. The NEFCO Carbon Fund (NeCF) is capitalised at up to EUR 115.3 million Testing Ground Facility (TGF) is a EUR 35 million regional carbon finance facility




http://www.nefco.org/financing/carbon_finance http://www.climatefinanceoptions.org/cfo/node/177



December 2011

PGGM (THE PENSION FUND FOR THE DUTCH HEALTHCARE SECTOR)


1 Name of Financing Source PGGM (the Pension Fund for the Dutch healthcare sector)

2 Address Noordweg Noord 150 P.O Box 117 3700 AC Zeist, the Netherlands


Else Bos CEO/Chief Institutional Business [email protected]

4 Objectives

‘Sustainability is essential’ is one of our investment beliefs. PGGM believes that financial and social returns can be compatible objectives and, in the development and implementation of investment policy on behalf of its client, takes account on a structural basis of how investments may affect – and where possible improve – environmental and social conditions and corporate governance.

5 Region/Country Focus Netherlands

6 Sector Focus

PGGM looks for investment opportunities for its client with a high Environment, Social and Governance (ESG) score, for example in sustainable forestry, climate projects, renewable energy infrastructure and ‘clean-technology’ private equity.

7 Technology Focus Renewable energy opportunities and has already invested in wind farms


10


PGGM provides services in the field of pension fund management, comprehensive asset management, and management support and policy advice to various pension funds.




December 2011


14 Size of Fund Administers EUR 109 billion of pension assets of more than 2.3 million Dutch participants as of October 2011




18 Sources for Further Information http://www.pggm.nl


PGGM currently administers pension assets for five Dutch pension funds, including Stichting Pensioenfonds Zorg en Welzijn (“PFZW”), the second largest pension fund in the Netherlands. PGGM is one of the first signatories to the Principles for Responsible Investment. The Principles for Responsible Investment are:

To incorporate ESG (environmental, social and corporate governance) issues into investment analysis and decision-making processes.

To be active owners and incorporate ESG issues into our own corporate government policy.

To seek appropriate disclosure on ESG issues by the entities in which we invest.

To promote acceptance and implementation of the Principles within the investment industry.

To work together to enhance our effectiveness in implementing PRI.

To report on activities and progress towards implementing PRI


December 2011

P8 GROUP


1 Name of Financing Source P8 Group

2 Address

It is an initiative of the Cambridge Programme for Sustainability Leadership (CPSL) and HRH Prince of Wales’s Business and Environment Programme (BEP) supported by the Environmental Capital Group (ECG) and the Nand & Jeet Khemka Foundation.

3 Key Contact (Name, e-Mail, and Website) No information

4 Objectives Create viable investment vehicles to combat climate change and promote sustainable development

5 Region/Country Focus Europe, Asia, Australasia and North America

6 Sector Focus Global Climate Change


9 Proposal/Application Requirements No information

10


No information



13 Procedures for Fund Disbursement No information

14 Size of Fund USD 3trillion



December 2011



18 Sources for Further Information http://en.wikipedia.org/wiki/P8_Group


P8 Group is the Worlds leading Pension Fund. Members are made up of 4 funds from the United States, 4 from Europe, 3 from Asia and an Australian collective - including Universities Superannuation Scheme (UK), ABP (Dutch civil servants fund), AP7 (Swedish National Pension Fund), CalPERS and CalSTRS (the two largest US pension plans for California�s civil servants and teachers), New York State Commons and the sovereign wealth funds from Norway and Korea.


December 2011

X PRIZE – ENERGY AND ENVIRONMENT PRIZE GROUP


1 Name of Financing Source X Prize – Energy and Environment Prize Group

2 Address

X prize Foundation and Cisco X PRIZE Foundation 5510 Lincoln Blvd. Suite 100 Playa Vista, CA 90094-2034 U.S.A


Alan Zack [email protected] X PRIZE Foundation

4 Objectives

The goal of the Energy & Environment Prize Group is to generate breakthroughs in clean energy, climate change, energy distribution/storage, energy efficiency/use, and water resource management. Advances in these fields will lead to greater sustainability and efficiency, while reducing our dependence on fossil fuels.

5 Region/Country Focus None

6 Sector Focus Energy and Environment

7 Technology Focus


10





14 Size of Fund


December 2011

15 Funding Limit for Individual Projects Depends on available sponsorship for each prize




http://www.xprize.org/prize-development/energy-and-environment


APPENDIX III – Guidance and Template for Preparing Good Proposals to Funding Sources

December 2011

APPENDIX III – GUIDANCE AND TEMPLATE FOR PREPARING GOOD PROPOSALS TO

FUNDING SOURCES 1. Purpose & Framework This Appendix III provides guidance for preparing effective proposals to funding sources to provide funding for GHG mitigation projects. Topics that should be addressed in an effective proposal are outlined and explained. Appendix III focuses on preparing proposals for energy efficiency (EE/RE) and small scale renewable energy (RE) project development and finance programs. This focus has been chosen because (i) the vast majority of estimated GHG mitigation will come from scaled up implementation of EE/RE and RE project and equipment investments in a range of energy using sectors, (ii) these are the most common types of programs and (iii) significant experience with EE/RE project development programs exists from which to draw lessons learned. Thus, the framework for this Appendix III is as follows. A funding proposal is:

• from a developing country government, e.g., ministry of industry, trade, energy or environment,

• to one or more of the range a range of donor, public or concessional climate funding sources discussed in this report, (but not private commercial financing for EE/RE projects, though mobilizing commercial finance can be a strong part of the program design),

• for undertaking to undertake an EE/RE or RE project development and finance program,

• which program aims to develop, implement and finance EE/RE projects with energy users in specific target markets.

1.1. Definition of EE/RE Finance Programs. An EE/RE project development and finance program organizes and systematically delivers EE/RE projects, services and financing to implement multiple projects in specific target markets. These programs may (i) engage and mobilize financing from commercial financial institutions (CFIs), and also (ii) frequently involve international and national development financial institutions (DFIs) which can provide credit lines, risk sharing facilities and/or other investment instruments and technical assistance programs. Further, CFIs can partner with EE/RE businesses, energy utilities, associations of energy users and governments acting on behalf of energy users to market their financial products and generate substantial flows of well structured projects for financing.


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EE/RE potential exists in a diverse set of markets. These markets consist of large numbers of small, dispersed projects and are best approached programmatically, with market aggregation strategies. Successful programs combine (a) access to finance, with financial products structured and adapted to the target market, with (b) marketing, project development and project delivery mechanisms that generate a steady flow of investment ready projects, along with programs that build capacities of market actors to expand this business on a commercial basis. That is, they address both the supply side and the demand side of EE/RE financing.

This Appendix covers

• EE/RE Finance Program Design Principles & Methods • Essential Elements of Successful Proposals

2. Program Design Principles & Methods

Effective EE/RE finance programs seek to (a) directly support financing of EE/RE projects, and (b) build EE/RE finance markets and the capacities of commercial FIs and other market actors – EE/RE businesses, utilities, energy users, government policymakers - to develop and implement an on-going series of projects on a market basis after the public program has concluded. To make best use of public funding, it is essential that both these direct and indirect outcomes are sought when designing and implementing EE/RE public finance mechanisms.

EE/RE finance programs must be designed based on in-depth analysis of country market conditions and the specific institutional and credit characteristics of the target end-user sector(s) within the country. Target sectors -- industry, SME, commercial, single and multi-family residential, public/institutional/municipal, agriculture -- vary widely and each has their own special circumstances that have to be addressed in designing an appropriate finance/credit structure and program marketing plan. Market research for an EE/RE finance program design must include assessment of: the economics of individual EE/RE investments from the point of view of all parties, especially the end-user; the commercial contract, finance and credit structure of the investments, especially to satisfy commercial FI lending criteria; definition of a marketing strategy and plan; consultation and negotiation with market actors and specific arrangements with market aggregation partners; conduct a complete roles and risk analysis of the full project development and implementation cycle and define a clear allocation of project roles and responsibilities amongst the various parties to the transactions, consistent with their respective objectives and capacities; identification of structures that have scale up potential; definition of the DFI and donor development role and how the public grant and DFI investment instrument(s) will leverage commercial financing. The EE/RE program design must address all of these levels.

Commercial FIs want and will respond to a sufficiently large, steady, creditworthy demand for capital with manageable transaction costs. These three points -- deal and market size, credit, and transaction costs -- are key to meeting lender criteria for scale up. Strategies to aggregate projects and the demand for capital through market aggregators, development and provision of credit enhancement to create creditworthy finance structures, and preparation of projects so as to reduce transaction costs should all


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be considered as part of an EE/RE finance program design. EE/RE finance programs should work with and support commercial parties, incorporate commercial financing and strengthen, not distort, the marketplace. The program should define a pathway and vision for how the EE/RE financing systems can proceed on a full- or near-commercial basis following completion of the program and how the capacities of all parties to do so will be built.

The following strategic criteria are suggested for the design of EE/RE finance programs; the program should:

• assess and address EE/RE market barriers and financial market conditions;

• select target market segments and seek applications and prioritize efforts where there are compelling project economics and a financially and commercially attractive offer can be made to the target end-users, as strong economics are the fundamental motivation to implement projects;

• build on existing capacities and engage quality players/partners at all levels in the chain of project development, marketing, delivery and financial intermediation;

• take a programmatic approach to project financing and include a marketing and market aggregation plan;

• leverage concessional monies with commercial finance, and attract commercial FIs by including a credit structure designed for the institutional and credit characteristics of the target end-user market and to meet FI lending criteria; if needed, DFIs may also offer supporting investment instruments to the participating commercial FIs to provide financial resources or help assume risks;

• conduct a complete roles and risk analysis of the full project development and implementation cycle relevant for the target markets and define a clear allocation of project roles and responsibilities amongst the various parties to the transactions, consistent with their respective objectives and capacities.

A brief discussion of these points follows.

2.1. Barriers and Market Research. Typical barriers to EE/RE finance include:

• the large number of small, dispersed projects which characterize many EE/RE markets;


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• high pre-investment development and transaction costs relative to total capital deployed, which results in a lack of well prepared, investment ready projects;

• lack of customer awareness, complicated technical information requirements and long marketing cycles associated with selling projects;

• the early stage of development of the EE/RE industry; • the inadequacy of the project-by-project approach to project financing and development, and the

need for programmatic market aggregation approaches; • lack of EE/RE finance experience within financial institutions; • high perceived and real credit risks, lack of collateral offered by some EE/RE equipment and

difficulties creating creditworthy financing structures; and, • the sheer range of financing structures needed to address EE/RE financing needs of various

market segments.

These and other characteristics of EE/RE financing market create marketing barriers, increase development risk and costs, reduce financial institution interest in this sector and contribute to the gap between EE/RE’s technical/economic potential versus commercial achievement. In some cases, local financial market conditions, e.g., lack of available long-term capital, lack of developed legal environments that negatively affect loan security, or prevailing high interest rates, may discourage borrowing generally; these type of factors may or may not be amenable to intervention by a DFI.

Barriers should be researched through interviews with specific market actors to determine their viewpoints and experience. A typical market research agenda must cover the topics outlined below. Such an agenda must be crafted for the specific EE/RE finance program design task and the specific target markets being considered. The results of market research will inform a program throughout program design and into operations. The research process can also include structured dialogue between local FIs and EE/RE companies and other stakeholders, such as those facilitated by the World Bank Three Country (Brazil, China and India) program.60

EE/RE public finance mechanisms must be crafted and customized based on in-depth analysis of country market conditions and the specific institutional and credit characteristics of the target market segments within the country. Market segments -- for example, industry, SME, commercial, single and multi-family residential, public/institutional/municipal, agriculture -- vary widely and each has their own special circumstances that have to be addressed in designing an appropriate finance/credit structure and program marketing plan. Market research for a finance program design must include assessment of: the economics of individual EE/RE investments from the point of view of all parties, especially the end-user; the commercial contract, finance and credit structure of the investments, especially to satisfy the FI; definition of a marketing strategy and plan; consultation and negotiation with market actors and specific arrangements with market aggregation partners; identification of structures that have scale up potential; and definition of the DFI or donor development role and value-added. The design must address all of these levels.

60 This experience is reported in Financing Energy Efficiency: Lessons Learned from Brazil, China, India and Beyond, Robert P. Taylor et. al., The World Bank, 2008.


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2.2. Market Research for Design of EE/RE Finance Programs. To inform design of EE/RE finance programs, country market research needs to be conducted. This document outlines an EE/RE market research agenda.

2.2.1. Economics of EE/RE/ projects. Research economics of typical EE/RE project economics, including economics for key types of projects, e.g., cogeneration, power distribution efficiency, industrial waste heat recovery, etc. The easiest method for researching this topic is to collect project engineering/economic feasibility studies for existing and prospective projects.

2.2.2. Existing Government EE/RE Programs & Policies. The proposal should be informed by what government initiatives exist and have been implemented prior so that the new proposal builds on and does not repeat prior efforts. Research should:

• identify and summarize background, experience, interests and activities of government, NGO and development agencies active in promoting EE/RE project development and finance,

• inventory of main development and concessional programs underway and the resources they offer; prior EE/RE technical assistance activities that have helped build end-user awareness, conduct audits and demo projects, etc.

• evaluate all other EE/RE finance concessional programs, sponsored by both international and domestic agencies.

Supportive government policies should also be reviewed and described, for example, feed-in tariffs for RE power and tax credits or accelerated depreciation for EE/RE investments. Existing climate investment and climate action plans and the program’s ability to meet establish goals should be cited.

2.2.3. EE/RE Companies. Identity and collect background information on experience and business interests and activities of main commercial players in the EE/RE market including EE/RE businesses, ESCOs, mechanical/electrical contractors, EE/RE engineers, utilities, and others who are developing projects. From interested, cooperating firms, collect case studies of implemented projects and feasibility studies for projects under development. EE/RE companies can drive the market and can be the best allies and partners in program design and implementation.

2.2.4. Financial Institutions. Capacities, experience and lending criteria of main FIs, both commercial bank and non-bank (including leasing companies) FIs, identification of FIs interested in the EE/RE market and/or with relevant, adaptable experience, and capital market conditions; government finance and economic development programs, including programs to channel capital to EE/RE projects and to small and medium size enterprises (SMEs). Identify case studies of EE/RE projects that have been financed to understand current state of the practice. Questions for FIs include:

• type of borrower: commercial both small and large, municipal, institutional, industrial • type of equipment and projects financed • experience in providing finance to each of the EE/RE program's target sectors • examples of recent, typical transactions, current appetite for lending


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• minimum and maximum deal size (which may be different for one-off deals versus programmatic relationships for financing)

• credit standards/requirements and credit analysis procedures, security requirements, transaction processing procedures, documentation requirements

• terms of typical deals, interest rates (fixed/floating), tenor, payment schedules, • construction financing and/or disbursement procedures • experience with equipment leasing and vendor finance programs • typical interest rates, terms (tenor), payment structures • sources of funds for long-term financings

Background information and reports on general macroeconomic and capital market conditions in country affecting climate for borrowing and investment are also important to review and address, including: interest rates, inflation, GDP growth rates, availability of medium-long term capital in both local and foreign currency and credit conditions, i.e., credit quality of various target borrower (end-user) sectors.

In the process of developing EE/RE finance programs, DFIs and development agencies must conduct research and interviews with prospective partner CFIs. Many commercial parties have been wearied and become wary of development agencies, and rightly concerned about the time spent responding to development agency research requests. Thus, it is important to treat the research process in the same way as if one is establishing a business relationship. The value proposition for the CFI must be clear from the beginning. One way to achieve this is to conduct EE/RE market research in advance, provide valuable market information to the CFI in the context of initial contacts, and even bring potential transactions in order to ground the first discussions in real financing opportunities.

2.2.5. Key End-User Sector Research. Background on credit, legal and institutional decision making characteristics of key/select energy end-user sectors: industry, municipal, power utility, hospital, etc. Procurement rules for public sector end-users. Further detailed sector-specific market research agendas are available on public sector procurement, cogeneration, public lighting and for specific EE/RE/ESCO companies.

2.3. Identifying Economic Projects with Commercial Potential. The main elements required to drive development and implementation of projects are (1) compelling project economics, and (2) motivated project sponsors/participants. These forces can overcome market barriers when combined with a project/service delivery system and a contract and financing arrangement to link the parties for project implementation. Project participants must have clear financial incentives. EE/RE public finance programs must be demand driven and address market opportunities. Market research usually begins by identifying EE/RE projects with compelling economics. There must be a clearly assessed and articulated economic case, from the perspective of all relevant parties, for implementation of the projects. Strong project economics creates the "pie" of economic benefits to distribute amongst and motivate participants to make decisions and act. Cost/benefit analysis needs to be conducted from the perspective of various parties, end-users, utilities, EE/RE businesses, and investors/ lenders. Research in a given market must also identify these players and develop an understanding of their business


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objectives, capacities and financial interests. The quickest method for identifying economic project types is often by interviews with the EE/RE businesses selling such projects and equipment. With this information, target sectors can be selected.

2.4. Programmatic Approach & Market Aggregation. A primary challenges of EE/RE financing stem from the large number of small projects which characterize most of this market. These challenges can best be met by project aggregation, grouped typically by end-use sector or technology. To succeed at the levels of market penetration warranted by their economics, EE/RE financing must take a programmatic approach, not a project-by-project approach, to project marketing, development and financing and do so by developing financing relationships with market actors who can develop multiple projects with sets of end-users in their target sector. These parties include equipment manufacturers, contractors, project developers, ESCO's, utilities, government agencies, major end-users who operate multiple facilities, including the public sector and associations operating on behalf of end-user group, and specialized financial intermediaries. Finance programs should be designed with and to support these market actors.

Aggregation of projects can occur during project development. EE/RE financing strategies should be integrated with EE/RE project development strategies. Financing is the capstone of project development. A financing transaction closes when all elements required for a successful project are put in place. "Financial engineering" -- decision-making, contract and financing structure, financing source(s), flow of funds, credit analysis, risk allocation, etc. -- need to be addressed in project development with the same intent and priority as energy engineering. Marketing issues must also be addressed. One of the major impediments to the growth of the EE/RE industry is the slow, delay-prone end-user decision-making process. Promoting this industry programmatically requires organizing groups of end-users and getting them "decision-ready" to implement projects. The availability of financing can help drive the development of projects. The organized availability delivers an important message to the market that these projects are valued and can get done. However, access to capital is necessary but alone is not sufficient to stimulate for development and implementation of projects. Financing needs to be combined with other project and business development assistance.

2.5. Financial Institution Perspectives & Meeting Financial Institution Criteria. Financial institutions (FIs) want and will respond to a sufficiently large, steady, creditworthy demand for capital with manageable transaction costs. These three points -- deal and market size, credit, and transaction costs -- are key to meeting lender criteria. Strategies to aggregate projects and the demand for capital through market aggregators, development and provision of credit enhancement to create creditworthy finance structures, and preparation of projects so as to reduce transaction costs should all be considered as part of a public finance mechanism design.

2.6. Achieving Leverage of Concessional/Public Funds. Concessional funds must be leveraged effectively to support the maximum amount of total financing and therefore have an impact on the market. Concessional funds must be used to mobilize commercial debt finance; the ratio of commercial funds to concessional funds must be as high as possible. To mobilize commercial debt, the concessional monies can be put in high risk positions to create financing structures that combine and support provision of senior (more secure) debt from commercial sources. When concessional funds are used as


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equity, matching equity funds from other sponsors should be required. Further, use of structures which result in reflows to the concessional fund source will allow the finance program to preserve and therefore reuse its capital for additional finance activity. Leverage can be conceived in terms of (i) maximizing direct support for projects, and (ii) maximizing the demonstration effect of the program, directly and indirectly stimulating more entrants into the market and replication of successful finance and business models on a commercial basis. The use of concessional monies must push the market along the path toward fully commercial activity and seek to maximize the indirect demonstration values of the program. Finance which is structured closest to commercial terms will have the greatest potential for replication. Options for design of appropriate DFI investment instruments that support commercial FIs are discussed below.

2.7. Transaction Roles and Risk Analysis. Once compelling project economics have been identified and the target sectors for the EE/RE finance program selected, the developmental task is to assemble the parties to the proposed transaction(s), catalyze decisions, conduct the "financial engineering" to create a complete, creditworthy, commercially viable arrangement. For each transaction, we want to describe (1) the participants and their roles, objectives and financial incentives, (2) the project development cycle, including who initiates the project, and (3) the financing structure, contract terms and flow of funds. A preliminary project finance risk analysis is needed which evaluates all risks, distributes them amongst the parties, and defines methods (technical, contractual, financial, etc.) for managing and mitigating risks.

The individual project development cycle provides a useful framework for approaching design of finance programs. All project functions need to be performed. Where the roles and risk analysis identifies a gap -- a role no is prepared to play, a lack of an entrepreneurial driver, a cost no party is prepared to incur, a risk that no party will accept, a mismatch between cost and benefits for projects which have strong but maldistributed economics and incentives -- the EE/RE finance program can seek to fill the gap. Technical assistance interventions to promote EE/RE project development and financing can target a range of stages in the project development cycle and should be selected to complement the existing market conditions and capacities of market players. Any program must have a “market driver” who is incentivized take the initiative to develop projects. These are often the EE/RE businesses selling equipment, projects and services. Some EE/RE finance programs set up “project agents” whose job it is to identify and facilitate transactions, acting like a broker to bring the parties together. Such project agents can be compensated from technical assistance funds and in some cases through closing fees charged to the transaction participants. Following this analysis, a program design should develop plans for public or donor supported technical assistance to build capacities of and fill any gaps, roles or risks not assumed by the commercial parties.

2.8. Building on Existing Capacities. A useful aphorism in this development work is to build on existing capacities. Market research should be geared to understanding existing capacities amongst the key market participants, especially FIs and EE/RE businesses. Then, one can explore how to apply and adapt these to deliver projects and financing to the target market. Programs can innovate on one or two levels; if the program design calls for multiple innovations beyond that, the chances of success diminish rapidly.


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All country markets have a strong array of equipment vendors and established engineering firms, some with turnkey contracting capability. These are core competencies required for development and implementation of EE/RE projects. An EE/RE program can bring complementary marketing, financing and new transaction structuring and contracting methods to these firms to generate business for them. Most commercial FIs offer term lending for plant and equipment; some have leasing units, others structured finance and project finance capacities. Thus, the FIs may already be engaged in lending similar to that required for EE/RE projects. It is a matter of learning their existing interests and capacities and see how these can be adapted and applied profitably to the EE/RE markets.

In the process of research and conducting interviews, relationships can be built with commercial parties and other agencies which can be instrumental in program implementation. Many commercial parties have been wearied and become wary of development agencies, and rightly concerned about the time spent responding to development agency research requests. Thus, it is important to treat the research process in the same way as if one is establishing a business relationship. The value proposition for the commercial party to participate in the research process, and ultimately in the planned program itself, needs to be clear and directly addressed in the interview. In the beginning research stage, the currency of value is information, so the researcher can present background information and ideas on the EE/RE market, business opportunities and financing structures.

3. Program Proposals: Essential Elements

Effective proposals must address the following elements:

• Program design, including Program objectives & target markets • Implementation Plan & Partners • Budget & Use of Funds • Expected Results, Evaluation Plan and Impact Metrics • Direct & Indirect (Market Transformation) • Pathway to Sustainability & Replication • Program Implementation Risks & Risk Mitigation

3.1. Program Design & Development Objectives. The program design should be summarized, including target markets, types of EE/RE equipment being promoted and the justification for the design provided based on the market research conducted. It is useful to compare the proposed program design to the design of other EE/RE program designs, and indicate how this program builds on lessons learned from similar program designs and models.

3.1.1. Developmental Objectives. Typical EE/RE market developmental objectives can include the following.

• promote the entry of new EE/RE technologies into the market,


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• promote the growth and business development of EE/RE project, equipment and service companies;

• build the capacities and experience of local financial institutions in EE/RE project finance, provide more favorable credit conditions to borrowers, and promote financial innovation in the market;

• demonstrate effective new EE/RE project finance business models; • provide practical demonstrations and develop effective methods for how utilities can

serve as a platform for marketing and delivering EE/RE projects and services in ways that benefit the customer, the utility and the general economy and society.

3.2. Implementation Plan & Partners. Project functions and roles should be laid out. Implementation partners can include CFIs, EE/RE companies, end-user associations and others.

3.2.1. Implementation Partners. All program functions and roles should be laid out.

Implementation partners can include CFIs, EE/RE companies, end-user associations and others.

3.2.2. Project Development Cycle. The EE/RE project development cycle is also a useful way to organize the presentation of program activities, tracing project development steps from marketing, engineering, financial planning through to financial closing and implementation.

3.2.3. Marketing & Outreach. Marketing and outreach are critical functions that will drive

program participation. Marketing allies include the EE/RE companies which seek to sell their equipment and services. Typical EE/RE project economics from end-users’ perspective should be described, as this will drive decisions to implement.

3.2.4. Financing Mechanisms. The financing mechanisms that will be deployed should be described, including: the CFIs that will offer the financial products, the basic credit structure and collections mechanism for the financial product, any credit enhancements, the financing terms and how the terms are matched to the EE/RE project economics, and finance origination steps. Strategy for leverage of the program funds needs to be defined, and how the program will recruit financial institution partners and make this an attractive business proposition for them. The target portfolio of projects to be funded can also be described.

3.2.5. Technical Assistance & Capacity Building. Programs will typically include a technical assistance (TA) and capacity building component, working with key program implementation partners. TA can include transaction structuring, marketing support, trainings, business planning, assistance to EE/RE companies to integrate financing with their offers, engineering due diligence for CFIs to confirm the technical soundness of proposed projects, and other support typically focused on preparing projects for investment.


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3.2.6. Stakeholders & Advisory Committee. Program stakeholders should be identified, parties who have an interest in the program success, including energy users, EE/RE companies, financial institutions, energy utilities and interested government and development including NGO agencies. Many programs set up an advisory committee of stakeholders to provide informal advice to the program during operations and also provide a channel for communications.

3.2.7. Program Management. The organization and staff that will manage the program should be identified and their capacities to manage program implementation roles discussed.. Typical roles of the program management office include the following.

• work with partners to implement the Project, especially during the start-up phase when Project methods are being developed;

• procure and manage external consultants -- both national and international -- involved in the TA program, including for Project start-up;

• assist in development and structuring of EE/RE project transactions; this is the main goal and transaction support is often needed;

• provide the leadership and hands-on operational guidance to maintain, further develop and adapt the Project’s vision and strategy during the start-up and operations period

• recruit new partners and conduct the outreach program in all its dimensions; • manage other donor funds and provide reports to donors as required; • organize and implement the monitoring and evaluation of the Program and procure and

manage external evaluation consultants; • communicate with Program stakeholders and organize and conduct meetings of the

Program’s Advisory Council, including liaise with and provide reports to relevant government ministries.

3.3. Budget & Use of Funds. The program budget and funding request must be specified and broken down. Typical uses of funds include:

• Program management, including normal staff, office, travel and start-up expenses • Engineering services and other technical assistance • External consultants • Marketing • Training • Evaluation and monitoring • Use of funds for concessional co-finance, such as loan loss reserves or other credit

enhancements or direct capital subsidies.

Sometimes, program funds are used for credit enhancement or reimbursable grants, whereby funds are used but may recycle or get returned to the program. In this case, the “exit” strategy, that is, what happens to these funds over time as the program concludes, needs to be addressed.

[NOTE: Methods of concessional co-finance can be addressed, if requested.]


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3.4. Expected Results. Expected results can typically be divided into direct results and indirect or market transformation results being sought. Direct results must include estimated energy saved or produced by the EE/RE projects that will be directly supported by the program and the associated estimated GHG reductions, in TCe. From these values, the program costs per TCe emissions reduction can be estimated. Values in the $10/tom range or less are very attractive. Other main direct results include the total investment value of EE/RE investments which will be supported and the estimated number of transactions.

Indirect results focus on market development, capacity building market transformation and

3.5. Evaluation & Impact Metrics. Monitoring and evaluation (M&E) are integral to a program’s implementation. The M&E plan should be developed early, to assure that a baseline is established and begin collecting data needed for the evaluation., A baseline study will describe the current state of the market and level of EE/RE project investment activity in the markets targeted by the program. A program’s M&E framework will serve several purposes:

• monitor progress towards program objectives; • strengthen program performance and management by providing feedback on implementation; • provide a base for reporting and technical and financial accountability.

M&E will evaluate the program’s direct impacts: total EE/RE projects supported by the program and their related GHG emissions reductions. Other key indicators measures should also be defined, including indirect market development impacts. In order to capture market transformation effects, an M&E plan should assess the program’s indirect impacts and demonstration effects. This is often done through interviews with program stakeholders, both participants and non-participants.

Typical impact metrics include the following.

For EE/RE Projects and End-users:

• Number of EE/RE projects implemented and financed with direct program support • Total value of EE/RE investments supported • Total number of end-users engaged at each stage of the sub-project development cycle:

marketing, audit, project development, and project implementation • Energy saved and GHG emissions avoided due to EE/RE projects directly supported

For the EE/RE companies:

• sales volume of EE/RE projects and services by participating EE/RE suppliers • # of participating EE/RE supplier companies and their improved business performance • range of EE/RE equipment and services offered • training of EE/RE suppliers in new marketing and equipment finance methods and adoption

of these methods


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for Financial Institution Partners and credit enhancement program, if applicable:

• Total value of loans or financing transactions supported • # of EE/RE project loan transactions • extended loan tenors, e.g., to 5+ years • Payment performance of guaranteed loans • Actual losses incurred and guarantee claims payments made. • Increase in the “guarantee ratio” (guarantee reserves to total loans guaranteed) • Reduction in level of credit enhancement needed over time • # of financial institutions participating • Total value of loans provided by banks without credit enhancement

3.6. Sustainability & Replication. Many programs seek to demonstrate successful financing mechanisms and business models, engage commercial parties and then promote a commercially self-sustaining market dynamic, so that market actors will continue to develop, implement and finance EE/RE projects after the program is completed. This is an attractive strategy for funders. The plan of the program to achieve this result should be discussed, along with strategies for replication. Budget for replication could constitute a second phase of a program.

3.7. Risks & Risk Management. All programs involve certain risks, in program implementation and also in market conditions that are outside the program’s control. For EE/RE project development and finance programs, the biggest implementation risks typically concern marketing success and the long sales and development time required to get projects ready for investment. This is also a main focus of technical assistance efforts and program activities.

Types of risks include:

• Country macro-economic conditions, interest rates, inflation, foreign exchange rates or availability of funds

• Policy risks • Marketing success and uptake • Future energy prices and government subsidies or policies • Credit risks of energy users • Loan or financing performance risks • Implementation risks, including staffing such as staffing

These risks should be assessed and methods for mitigating and managing these risks described, by building on the capacities of program partners and experienced consultants, through policy support from government agencies, through contingency plans, through adjustments to program financing parameters such as levels of capital subsidy or credit enhancements, etc.