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An initiative of the ACP Group of States funded by the European Union Global Climate Change Alliance: Intra-ACP Programme Training Module Climate Change.

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Presentation on theme: "An initiative of the ACP Group of States funded by the European Union Global Climate Change Alliance: Intra-ACP Programme Training Module Climate Change."— Presentation transcript:

1 An initiative of the ACP Group of States funded by the European Union Global Climate Change Alliance: Intra-ACP Programme Training Module Climate Change Finance Module 3 – Multilateral and bilateral climate funds Ms Isabelle Mamaty Senior Expert Climate Support Facility

2 Module Structure  Multilateral funds o Climate Investment Fund (CIF) o Clean Technology Fund (CTF) o Global Energy Efficiency and Renewable Energy Fund (GEEREF) o Status of African Green Fund (AfGHF)  bilateral funds o International Climate Initiative (ICI) – Germany o International Climate Fund (ICF) - United Kingdom 2

3 Multilateral Funds 3

4 4 Clean Technology Fund (CTF)

5 Clean Technology Fund  One of the four funding windows within the Climate Investment fund (CIF) framework: multidonor fund  Administered by World Band and implemented by Multilateral Development Banks (MDB)  CIF structure o Clean Technology Fund o Strategic Climate Fund :  Forest Investments program  Pilot Program for climate Resilience  Scaling Up Renewable Energy program 5

6 Clean Technology Fund  Created in February 2008 and operational in July 2008*  Multi-donor Trust fund  Administered by the World Bank  No direct access: funds channelled through MDBs: e.g African Development Bank, Asian Development Bank, European Bank for Reconstruction and Development, Inter- American Development Bank, and World Bank Group 6

7 CTF Supported Activities  Power sector: Renewable energy and highly efficient technologies to reduce carbon intensity  Transport sector: efficiency and modal shifts  Energy efficiency : buildings, industry and agriculture At different levels  Sectoral or sub-sectoral levels in a given country  Sub-national levels (provinces/states/municipalities)  Regional levels 7

8 Eligibility for CTF  Country access criteria o ODA-eligibility (according to OECD/DAC guidelines); and o Existence of active multilateral development bank (MDB) country program  Project eligibility and level of financing are assessed on potential « transformative » effects and project viability in absence of concessional finance  Limit project amount: $50 millions 8

9 How to access the CFT (1) Public Sector  MDBs jointly assess interested eligible countries’ investment potential to meet CTF investment criteria (above)  Where there is a potential fit, MDBs conduct a joint mission with other relevant development partners involving all stakeholders to see how CTF may help finance scaled-up low carbon activities;  Under the leadership of the recipient country, an investment plan (essentially MDBs “business plan”) is produced; and  CTF Trust Fund Committee reviews the investment plan with a view to endorsing a resource envelope for programs/projects and authorizing designated MDBs to proceed with development and preparation of individual investment operations for CTF co- financing 9

10 How to access the CFT (2)  Private Sector o Private sector proposals are submitted in the form of either individual large-scale projects (“Projects”); or program envelopes which aggregate several small and medium sized projects each utilizing less than US$50 million of CTF funds and all having a shared focus and objective (“Programs”). o Proposals explain how the Projects and Programs are expected to contribute towards the objective of achieving transformational outcomes in a sector, sub-sector, country, sub-national region, sub-region, or region while demonstrating that these outcomes would not be possible without support from the CTF 10

11 Preparation of investment plans Access Requirements Investment plans should: - highlight how it is embedded into national development plans - include low carbon objectives - set out a pipeline of projects Investment plan Criteria: 11 Public - Potential GHG Emissions savings - Cost effectiveness - Demonstrations potential at scale - Implementation potential - Additional costs and risk premium Private - Financial stability - Effective use of concessional finance - Mitigation and market distortions - Risks

12 12 Global Energy Efficiency and Renewable Energy Fund (GEEREF)

13 GEEREF Overview  Created in 2006 and operational in 2008  The Fund is administered by the European Investment Bank (EIB)  Funding objectives: “Obtain benefits from accelerated deployment of energy efficiency and renewable energy technologies. And achieve high leverage of public finance by offering preferential returns to private funds.”  Funding available: Pledged: $ 170 million Deposited: $ 66 million Approved: $ 77 million 13

14 GEEREF Activities Supported GEEREF does not directly provide funding but three forms of assistance: 14 Technical Assistance Grants 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 Co-financing Possible on a case-by-case basis. Up to 30% of GEEREF’s total commitments by investors. Investment “ Fund of funds” Structured for both public and private investors Invests in private equity firms, Up to to €10 million equity investment projects must focus on renewable energy and energy efficiency production and/or technologies

15 GEEREF Areas of intervention Broad mix of projects promoting energy efficiency and renewable energy technologies:  Small hydro, biomass, and on-shore wind Co- firing solutions  Manufacturing, energy service, trading and micro finance venture  Photovoltaic. 15

16 GEEREF Eligibility  Focus on project funding in countries that have private sector engagement in their national policies.  Priority to small projects (less than EUR 10 million) as they are often neglected.  Recipient countries must be eligible for Official Development Assistance. 16

17 GEEREF Funding Accessibility 17 Who can apply? Fund management companies Financial institutions Project developers Development of a new clean energy investment fund Expansion of existing fund Developers of clean energy projects

18 GEEREF Funding Procedures Access Requirements and Procedural Issues Proposals should:  Present a financially sustainable business plan generating a fair return for investors and a realistic pipeline.  Specify environmental and socio-economic impacts.  Focus on small and medium sized clean energy projects (< 30MW) and companies.  Require long-term patient investment capital.  Locally grounded, professional fund management team, preferable with a track record in the clean, energy sector, or at least the capacity to become qualified or to liaise with other parties for that purpose. No specific application window. Eligible applicants submit proposals to the GEEREF management team 18

19 19 African Green Fund (AfGF)

20 What is the African Green Fund (AfGF) ?  Creation launched in 2009  Interventions: Balance allocation between adaptation and mitigation: transfer and deployment of low carbon technologies (long-term GHG savings) + climate - proofing of the continent’s investments  Eligibility: The Bank’s Regional Member Countries, public and private enterprises, NGOs, civil society, bilateral and multi-lateral organizations (including other MDBs), African regional organizations  Funding: Grants, concessional loans and guarantees to support public & private sector investments and build capacity 20

21 AfGF objectives of the Fund African Fund is part of the AfGF platform aims at addressing the gaps in climate financing in Africa Objectives: support country-owned and country-led climate compatible development in Africa by financing public and private sector programs including: Mobilise and facilitate access for its regional Member countries to existing and external resources though ClimDev, CBF, AWF and SEFA, and co-financing public and private programs ( in complement to CIFs, GEF and Adaptation Fund) Promote direct and immediate access to fast –start funds for climate mitigation and adaptation Support the development of climate resilient and low carbon programs and projects Strengthen national institutions to enable them to build capacity for direct access to the Fund 21

22 Supported activities  Adaptation o Sustainable land and water resource management o Building climate resilience in key economic sectors o Supporting disaster management activities  Mitigation o Renewable energy and energy efficiency o Sustainable transport o Sustainable land and forestry management  Cross-cutting activities: capacity building and technology transfer 22

23 Eligibility to AfGF Eligibility criteria:  development impact (climate-compatible development, achievement of the MDGs  Potential for cost-effective climate-resilient and adaptation investments  Potential for cost-effective GHG Emissions savings  Potential to scale up climate-resilient and low- carbon technologies  Implementation potential 23

24 AfGFF funding procedures  Step 1: preparation of a concept note (request for funding) for approval  Step 2: development, preparation and approval of individual programs/projects by the implementing entity using its internal processes  Step 3: re-submission of a final project document to the Governing Council  Threshold for project size: to be provided  Accreditation process: to be provided 24

25 AFGF: way forward  Consultation with key stakeholders including the African Negotiators; Africa Group’s Representatives to the Transitional Committee designing the Green Climate Fund; AfDB Board members through a Seminar to seek views and comments; Donors and potential contributors to the Fund; the African Council of Ministers of Environment; and the Civil Society and Private Sector;  Submission to the AfDB Board of Directors for consideration 25

26 Bilateral Funds 26

27 27 International Climate Initiative - (ICI) - Germany

28 International Climate Initiative - Overview Created in 2007 and made operational in 2008 The Fund is administered by the BMU of the Government of Germany First period 2008-2011, extended beyond 2011 Provides support to climate change mitigation, adaptation and biodiversity projects with climate relevance to help trigger private investments of a greater magnitude : o Support countries establishing economic structures that reduce GES emissions; o Support adaptation in countries that are especially vulnerable to climate change; and o Support measures for preservation and sustainable use of carbon reservoirs/Reducing Emissions from Deforestation and Degradation (REDD) 28

29 ICI Requirements  Eligible regions: Asia-Pacific, Africa, South and Central America, Small Island Developing States, Least Developed Countries  Priority to countries meeting ICI following criteria: o Climate-friendly economy  small and medium-sized newly industrialising countries with a high greenhouse gas reduction potential  consulting and capacity-building projects are preferred for the largest newly industrialising countries o Adaptation: countries/regions that are particularly vulnerable to climate change o Carbon sinks/REDD+: countries and regions that are particularly relevant/suitable to carbon storage and biodiversity; o Biodiversity: countries and regions particularly rich in biodiversity and/or an important role in the international CBD processes 29

30 ICI selection criteria  Projects should be innovative (technologically, economically, methodologically, Institutionally) and integrated into national strategies +  Duplicability of results, prominence and multiplier effect;  Transferability of projects to the level of international climate cooperation;  Significance of the partner country in cooperating with Germany, or in the context of international negotiations;  Solidity and quality of concept, presentation, expected project management and monitoring; and  Availability of self-financing, third party financing, and financial leverage effect. 30

31 Procedural Issues ICI: Procedural Issues 31 The application window occurs once a year. It is a two stage process: Step 1: project outline submission to the Programme Office. Step 2: If approved, then applicant will receive forms to enter a formal grant application with a detailed project plan and a financing strategy. Step 3: final review and decisions by the Ministry for Environment, Nature Conservation and Nuclear Safety

32 ICI in practice (1) : Projects by theme 32

33 ICI in practice (2): Projects by region

34 34 International Climate Fund (ICF) - United Kingdom

35 ICF Overview  Created in 2010 and operational in 2011 in replacement to the Environmental Transformation Fund (ETF)  Aims to support low carbon growth and adaptation in developing countries.  Projects: adaptation to climate change (50%), low carbon development (30%) and forestry (20%)  Period: 2011/12- 2014/15 35

36 ICF Supported activities  Building global knowledge and evidence;  Developing and scaling-up low-carbon and climate resilient programs;  Building capacity in the public and private sectors and supporting country level action;  Mainstreaming climate change into UK development aid.  Catalysing private investment and climate finance flows to developing countries through Climate Public Private Partnership (CP3) and the Capital Markets climate Initiative (CMCI) * 36

37 ICF project criteria Funds channelled through global multilaterally administered programs based on the following principles :  Consistency with the DAC definition of ODA;  Consistency with UK agreements on aid effectiveness (under the Paris Declaration);  Open and transparent project performance;  Choice of instrument; and  Appropriate enabling environment. 37

38 Procedures for ICF funding  Officials across Government are invited to develop project ideas consistent with the ICF implementation Plan with country government. These include officials both based in developing countries (usually FCO and DFID) and in the UK (DECC, DFID & DEFRA).  Development of project ideas into concept notes if accepted by ICF Secretariat  Decisions on development of the concept notes into business cases, are taken by the ICF Board and delegated approval boards.  no route through which an organisation outside of UK Government can independently develop a project to be considered by the ICF Board. All projects must have a UK Government sponsor 38

39 Turning words into action 39

40 Discussion  Questions and answers  Discussion and sharing of experiences in using these funds and difficulties encountered 40 Have you ever developed a project in your sector or at your level eligible to these funds? what are the institutional and capacity needs in your organisation to do so?

41 Where to get the information?  Getting information : visit of different websites  Multilateral funds o Climate Investment fund : o Clean Technology Fund (CTF): o GEEREF Website :  Bilateral funds o International Climate Initiative (ICI) website:http://www.bmu- o International Climate Fund (ICF) website ational/icf/icf.aspx ational/icf/icf.aspx 41

42 Thank you Contact: Dr. Pendo MARO, ACP Secretariat or +32 495 281 494

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