CCCXG Global Forum March 2017 CIF experience in financing long-term low GHG emission development strategies and enhancing climate resilience by Chris Head
CCCXG Global Forum March 2017 CIF experience in financing long-term low GHG emission development strategies and enhancing climate resilience by Chris Head
EU Energy Policy Strategy: Towards a Low-Carbon Economy
Semelhante a CCCXG Global Forum March 2017 CIF experience in financing long-term low GHG emission development strategies and enhancing climate resilience by Chris Head
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Communication Accommodation Theory Kaylyn Benton.pptx
CCCXG Global Forum March 2017 CIF experience in financing long-term low GHG emission development strategies and enhancing climate resilience by Chris Head
1. CIF experience in financing long-term low GHG emission
development strategies and enhancing climate resilience
Chris Head, Private Sector Specialist, Climate Investment Funds
OECD CCXG Global Forum
March 15, 2017
4. Gaps and Barriers to Climate Action
Lack of access to affordable long-term capital
• Main barrier scaling up investments for mitigation and adaptation
Sustained access to concessional sources of climate finance
• To meet 2020 climate targets, MDBs likely to require concessional finance
above current levels
High commercial risk
• Including off-taker risk, currency and political risks, technology costs, uncertain
payback time
Non-financial risks such as information, capacity, or policy gaps
• Poor enabling and regulatory environments often restrict the development of
low carbon markets
Across CIF countries, governments and investors face similar
challenges to deploying low-carbon solutions
5. CIF Business
Model
MDBs as Implementing
Agencies
• AAA rated institutions
with strong expertise in
deal structuring, E&S,
and client engagement
in challenging market
for relevant climate-
smart activities
Programmatic Approach
• Bringing MDBs,
governments, private
sector, and CSOs
together to link
planning and
investment across
sectors
Toolkit of Financing
Instruments, at Scale
• Suite of risk-
appropriate tools -
equity, loans,
guarantees, grants, and
local currency lending
alongside advisory
services
• Large envelope +
substantial co-financing
($50+ billion)
Strong Governance with
Flexible Business Model
• Agile operational
approach that can be
adjusted according to
the needs of both
MDBs and the market
Key Features of CIF Business Model
6. Indicative Allocation Approved
Disbursement
TOTAL IP DPSP TFC MDB
CTF Funding (in $M) 5,804.0 5,312.5 491.5 4,962.6 3,757.1 1,664.5
Number of projects 121 102 19 100 80 61
Clean Technology Fund (CTF) Overview
7. CTF Portfolio Analysis
Energy
Efficien
cy
14% Renew
able
Energy
69%Renew
able
Energy/
Energy
Efficien
cy…
Transpo
rt
11%
By sector
Geoth
ermal
18%
Hydrop
ower
3%
Mixed
16%Solar
48%
Waste
to
Energy
1%
Wind
14%
By renewable energy
technology
AFR
26%
ASIA
35%
ECA
18%LAC
18%
DPSP-
Region
al
3%
Share by region
8. • Less than 7% of global geothermal
potential tapped
• Approximately $850M in CIF financing has
been allocated for geothermal investments
in 15 countries.
• Funds have been allocated both through
Investment Plans, as well as dedicated
private sector windows
• CTF funds enables MDBs to support
earliest, riskiest stages of geothermal
development to prove resource availability
• Potential to contribute to over 25% of
current global installed capacity.
Risk-Appropriate CTF Financing Tools
and MDB Expertise has Generated
Major Impacts in Geothermal Market
The 330MW, $1.6B
Sarulla geothermal
project in
Indonesia received
$80M of mezzanine
finance from CTF
that was crucial for
the project to reach
financial close
CTF Transformation in Action -
Geothermal
9. Pilot Program for Climate Resilience
PPCR Operational Overview
The PPCR aims to improve the climate resilience of its pilot
countries by using a two-phase, programmatic approach:
• Phase 1: The PPCR assists national governments in
integrating climate resilience into development planning
across sectors and stakeholder groups
• Phase 2: PPCR provides additional funding to put the plan
into action and pilot innovative public and private sector
solutions to pressing climate-related risks
• The PPCR is active in 30 pilot countries and regions
• To date, PPCR has approved over $900 million in funds for
54 projects which are expected to leverage $1.3 billion in
co-financing
• Sectors supported by PPCR include Infrastructure, Water
Resources Management and Agriculture
PPCR Portfolio
10. PPCR – Private Sector
• A financing gap of USD tens of billions/year exists for developing countries to make their
economies climate resilient
Private Sector Initiatives Under PPCR
Three key takeaways
from PPCR private
sector climate
resilience report:
1.) Addressing
Knowledge Gaps in the
Private Sector Matters
2.) Concessional Financing When Returns
are Uncertain is Important
3.) Intermediated Financing Can be
Effective for Engaging Small Businesses
• The private sector will be critical to fill this gap,
though the sector faces unique challenges to
support climate resilient investments
• $137.06 million of PPCR funds are dedicated to
help MDBs and the private sector overcome
these barriers
• 96% of PPCR private sector funds support
projects in least developed countries (IDA)
11. PPCR – Private Sector Case Study
PPCR Private Sector in Focus – Innovative Financing to Help Improve the
Climate Resiliency of Small Businesses in Tajikistan
• Tajikistan is one of the most climate vulnerable
countries in Central Asia, and adverse climate effects
on food and energy production and the availability of
water are already being felt
• In 2014, $5.0 million in PPCR PSSA concessional finance
was approved for an innovative financing facility led by
the EBRD to support the uptake of climate-resilient,
water-efficient and energy-efficient technologies by
small businesses, farmers and households
• The new financing facility combines commercial and
concessional funding to scale up financing – through
local currency lending - for climate resilience through
local banks and microfinance institutions
• The project also provides critical advisory services for
local financial institutions and lenders