Amal-Lee Amin CIF Focal Point Energy and Climate Change Unit Scaling-up Investment through the Climate Investment Funds

Context: Bridging the Gap Multi-donor finance and support for low carbon and climate resilient development Incr. developing country access to carbon finance Increasing capacity Significant flows carbon finance from developed to developing countries, overseen by effective international institutions Additional finance tops up aid to support climate resilient development Developing country access to climate information, research, advice and technologies, facilitated by effective int’l institutions Lack finance (incl. carbon $) and support for low carbon and climate resilient development. Present Bridge Low carbon, climate resilient future

3 Pledges to the Climate Investment Funds Multi-stakeholder design meetings 2008Multi-stakeholder design meetings 2008 –March 4 – 5 Paris –April Wash D.C. –May Potsdam World Bank Board on July 1, 2008World Bank Board on July 1, 2008 Sep , PledgingSep , Pledging : ongoing development of programming guidelines and investment criteria : ongoing development of programming guidelines and investment criteria Pledges Received US$ equiv. millions Australia127 Canada82 Denmark25 France300 Germany813 Japan1,200 Netherlands50 Norway50 Spain118 Sweden92 Switzerland20 United Kingdom1,488 United States2,000 TotalUS$6.3 billion

4 Clean Technology Fund Finance scaled-up demonstration, deployment and transfer of low carbon technologies US$5 billion pledged (+/-) Strategic Climate Fund Targeted programs with dedicated funding to pilot new approaches with potential for scaling up Pilot Program for Climate Resilience Mainstream climate resilience into core development planning Forest Investment Program Reduce emissions from deforestation and forest degradation Scaling Up Renewable Energy in Low Income Countries Transformational change to use of renewable energy US$1 billion pledged (+/-) Country Investment Plans Support countries’ development strategies Leverage financial products of International Financial Institutions Stimulate private sector engagement Administrative Unit MDB Committee Partnership Forum – bring together finance, development and climate change

Climate Investment Funds – General Approach Ministry Finance to request and lead joint mission - IDB to work with World Bank Group on Country Investment Plans / Strategic ProgramsMinistry Finance to request and lead joint mission - IDB to work with World Bank Group on Country Investment Plans / Strategic Programs Small amounts of CIF grant for technical cooperationSmall amounts of CIF grant for technical cooperation Leverage IDB financing, and build on and promote synergies with other funding sources i.e. GEF, UN and bilateral agencies – maximise scaling-up investmentLeverage IDB financing, and build on and promote synergies with other funding sources i.e. GEF, UN and bilateral agencies – maximise scaling-up investment Regionally approach where regional cooperation is required e.g. CaribbeanRegionally approach where regional cooperation is required e.g. Caribbean New source of highly concessional finance to leverage and blend with:New source of highly concessional finance to leverage and blend with: –IDB loans and other financial instruments –Other international, e.g. bilateral and Carbon finance –Domestic public finance and international & domestic private investment CIF Governing Bodies to endorse Program Concepts and approve financing for Projects at the pre-appraisal stageCIF Governing Bodies to endorse Program Concepts and approve financing for Projects at the pre-appraisal stage Project preparation follow IDB procedures and Board approvalProject preparation follow IDB procedures and Board approval

Clean Technology Fund – Investment Criteria CTF Public Sector Programs/Projects to identify: Potential for GHG Emissions SavingsPotential for GHG Emissions Savings Cost-effectivenessCost-effectiveness Demonstration Potential at ScaleDemonstration Potential at Scale Development ImpactDevelopment Impact Implementation PotentialImplementation Potential Additional Costs and Risk PremiumAdditional Costs and Risk Premium CTF Private Sector programs/projects as above, plus: Financial Sustainability (how subsidies may be reduced in future)Financial Sustainability (how subsidies may be reduced in future) Effective Utilization of Concessional FinanceEffective Utilization of Concessional Finance Mitigation of Market DistortionsMitigation of Market Distortions Minimisation of RisksMinimisation of Risks Aim for public and private sector activities and investments to compliment and leverage each other in a programmatic wayAim for public and private sector activities and investments to compliment and leverage each other in a programmatic way

Mexico CTF Investment Plan Context In 2002 Mexico emitted 643Mt CO 2 e with 400Mt CO 2 e from fossil fuels Green House Gas (GHG) emissions in Mexico mainly produced by the power sector (24% of the total), fastest growth in the period (46%) Mexico’s “Estrategia Nacional de Cambio Climático” recognizes the need to scale-up investments in renewable energy (as key to transformation) Motivation of CTF RE Program Relative untapped potential of world class renewable energy resources total estimated at GW By 2030 renewable energy could abate 72 million tons CO 2 e per year High carbon emission factor and cost-effective abatement measure Scaling up renewable energy key to transformation in Mexico’s energy matrix Window of opportunity to support implementation of new regulatory powers

IDB-Mexico RE Program Priority investments Provide direct finance for scaling-up private sector investment – to gain experience of wind projects Support for regulator on pricing mechanism for renewable energy Pilot a national public finance facility for large scale wind power projects Integrate and build upon with other instruments: SECCI technical cooperation; Carbon Market and; a GEF project Anticipated Outcomes: Scaled-up of investment – 500MW Plus Institutional and organizational learning – facilitate and accelerate implementation of Renewable Energy Law Build confidence amongst investors and decision-makers for delivery of projected targets 18 million tons CO 2 per year

Strategic Impact of the Climate Investment Funds CIF: US$ 6.1 billion pledged for 2009/10 for 3 – 5 years Mutual synergies and leverage with SECCI Objectives CIF “Programmatic” approach leading to new: Focus on synergies and leverage across Bank units and between public and private sector Emphasis on institutional change and policy innovation Importance of learning (by-doing) and new strategic dialogue with Finance Ministries In-country collaboration amongst MDBs and leverage of other multilateral and bilateral finance / agencies Demonstrative impact.. incl. how MDBs can scale-up support countries with climate change financing Potential to be a cornerstone of the post-2012 financial architecture

Thank you!