1. Using green credit lines to foster climate investment
Igor Shishlov
@ishishlov
@I4CE_

2. I4CE – Institute for Climate Economics
3 research areas addressing the issues faced by actors involved in the energy transition

4. Next 15 years critical to ‘shift trillions’
Source: New Climate Economy Report (2014)

5. Barriers to environmental lending
Investment environment
Economic
Financial
Legal
Demand-side (end borrowers)
Low awareness of technologies/ financing options
Trade-off between long- and short-term benefits
Lack of capacity to prepare business plans
Supply-side
(LFIs)
Lack of capacity to assess projects
Unsuitable lending practices
Lack of risk management mechanisms
Profitability considerations
Source: I4CE (upcoming)

6. Green Credit Line PFI Policy dialogue Grant Funds / guarantees
Consultants
LFIs
Government
Funds
Technical
assistance
End-borrowers
Public
policies
Source: I4CE (upcoming)

7. Example: SUNREF program by AFD
Source: AFD

8. Financial benefits of GCLs
Lower interest rates
Reduce the cost of capital
Public subsidies within a GCL
Longer tenor
Address the temporal mismatch
Increased grace period
Guarantees
Reduce technology/political/FX risks
Incentive payments
Incentivize demand for green loans
Source: I4CE (upcoming)

9. Non-financial benefits of GCLs
Stage in green lending
Technical assistance
to LFIs
to end borrowers
Barriers addressed
Identification and marketing
Market studies, portfolio assessment
Energy audits, providing information on potential funding
Low awareness of green investment opportunities
Appraisal
Feasibility studies, technical audits, financial assessment
Support in drafting business plans and investment proposals
Lack of capacity to evaluate/draft green investment proposals
Product delivery
Support in design and deployment of new financial products
Accompanying end borrowers during project implementation
Unsuitable financial products and/or lending practices
Monitoring and evaluation
Development of monitoring and evaluation tools
Support in the assessment of the project
Lack of capacity to monitor and evaluate ongoing projects
Source: I4CE (upcoming)

10. Challenges to GCL deployment
Financial additionality and market distortion
Concessional vs commercial pricing
Lack of harmonized evaluation tools
Limited internal uptake & TA capitalization
No track record of GCLs for adaptation

11. igor.shishlov@i4ce.org www.i4ce.org
Thank you!