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Engaging with the Green Climate Fund

Engaging with the Green Climate Fund. Tony Clamp, Deputy Director, Private Sector Facility Urvaksh D. Patel, Specialist, International Financial Institutions March 2018 | Tokyo, Japan. The Green Climate Fund. Country Driven Approach Climate Impact Focus Paradigm Shift Potential

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Engaging with the Green Climate Fund

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  1. Engaging with the Green Climate Fund Tony Clamp, Deputy Director, Private Sector Facility Urvaksh D. Patel, Specialist, International Financial Institutions March 2018 | Tokyo, Japan

  2. The Green Climate Fund • Country Driven Approach • Climate Impact Focus • Paradigm Shift Potential • Comprehensive Spectrum of Offerings to Countries • Dedicated Private Sector Facility A mandate to promote low-emission and climate resilient development in developing countries 2

  3. A Growing Portfolio • Approximately $3.7B for 76 projects in over 60 Countries Kazakhstan Georgia Serbia Mongolia Uzbekistan Armenia Moldova Tajikistan Tunisia Jordan Bhutan Morocco Egypt Pakistan Mexico Bangladesh Eastern Caribbean Senegal Mali India Viet Nam Gambia El Salvador Ethiopia Nigeria Sri Lanka Nauru Benin Uganda Colombia Tuvalu Maldives Ecuador PNG Kenya Samoa Solomon Islands Peru Rwanda Fiji Tanzania Cook Islands Mauritius Vanuatu Malawi Namibia Madagascar South Africa Chile Argentina Status as of B19 (Feb 2018) 3

  4. A Diverse Network of Partners South Africa Peru Indonesia India Korea Namibia Senegal Morocco China India Bangladesh Mongolia Antigua & Barbuda China Bangladesh Fiji Argentina Kenya 59 entities accredited to date Ethiopia Morocco Rwanda 4

  5. GCF Approach – Accredited Entities Financial Instruments Grants Loans Guarantees Equity 5

  6. GCF Approach – Other Partnerships • Other modalities for involvement include: 6 Common Common Less Common

  7. How Does GCF Invest? • GCF provides grants, debt, equity and guarantees to: • De-risk investments and mobilize public and private sector funding • Bundle small projects into investible portfolios • Help develop public-private partnerships for infrastructure resilient projects • Encourage innovation • Support capacity building 7

  8. Funding Proposals High impact potential Sustainability strategy Provisions for co-financing Link to national strategy or plan O&M costs covered Scale-up potential Right level of concessionality and financial instruments Low cost emission reductions Milestone-based disbursements Built on scientific evidence and lessons learned from previous projects

  9. Japan and the GCF • Contributor: USD 1.5bn pledged (#2) • Board seats: Board and alternate Board member since inception (MOFA and MOF) • AEs: Two entities accredited: BTMU and JICA • Climate technology: leadership in automobiles and geothermal – largest supplier of turbines • GCF Executive Director Howard Bamsey travelled • to Japan in his first official overseas visit 9

  10. GCF Private Sector Facility (PSF) Role To fund and mobilize institutional investors with GCF funds to encourage the private sector to invest Approach • Catalyze private sector funding • A special focus on LDCs, SIDS and African states • Long term funding through financial instruments and structure-in concessionality Access to the Private Sector • Accredited Entities with private sector capacity • Present funding proposals or responsd to calls for proposals 10

  11. PSF Business Model Country Ownership Project Accredited Entity 11

  12. Portfolio Composition as of B19 Private Sector Committed amount of GCF funding (17 approved projects) Equity 30% $4.66 billion Guarantee 2% Loan 61% $1.51 billion USD 1.51B 12

  13. Private Sector Projects as of B19 Total 13

  14. Request for Proposals Mobilizing Funds at Scale • Closed on • 30 August 2017 • Published on • 25 May 2017. • Short-list Announced • December 2017 • Top 30 Short-listed • GCF INVESTMENT: • Up to USD 500M in projects/programmes • COUNTRIES RECEIVED: • 70+ Developing countries • NUMBER OF CONCEPT NOTES RECEIVED: • 350 CNs • EST GCF REQUESTED FINANCING: • USD 18 Billion • EST. PROJECT COST: • USD 43 billion

  15. Private Sector Projects Egypt Renewable Energy Financing Framework • USD 150M in loan and USD 4.7M in grant: • Encourage private sector investment in an environment where currently there is negligible renewable capacity installed • To remove the bottlenecks to the lack of financing for the development of private sector renewable energy projects • Emissions reduction of 18.9 million tCO2e 15

  16. Private Sector Projects • Renewable Energy Program – Solar #1 • USD 8.65M in loan • To unlock renewable energy investments in Mongolia and mobilize private sector capital • To help Mongolia to achieve its nationally determined contribution (NDC) targets • The project is expected to be a precursor to the Asia Super Grid initiative • Emissions reduction of 0.30 million tCO2e 16

  17. Private Sector ProjectsGEEREF NeXt • USD 250M in equity and USD 15M in grant: fund of funds with the aim of being the first investor in RE/EE investment funds • Significant climate impact due to the elevated multiplier effect • Channeling institutional investors into renewable energy and energy efficiency investments in developing countries • Emissions reduction of 769 million tCO2e 17

  18. The Green Climate Fund Japanese Board Member: Mr. Tsukada (MOFA) 18

  19. Contacts Tony Clamp Deputy Director Private Sector Facility privatesector@gcfund.org Urvaksh D. Patel Specialist – International Financial Institutions Division of Country Programming info@gcfund.org Juichiro Sahara Resource Mobilization Senior Specialist Division of Support Services info@gcfund.org

  20. Annex

  21. Portfolio Composition76 projects/programmes with USD 3.7 billion in GCF funding Requested and committed amount of GCF funding Status as of B19 (Feb 2018) 21

  22. GCF Projects Under Implementation Total Disbursed: USD 147.2M Projects under-implementation GCF funding $596 million Co-financing $1,275 million GCF + Co-financing = Total USD 1,871 million Projects composition • Public sector (15) • Private sector (3) 22

  23. Six Investment CriteriaAgainst which proposals are assessed • Potential to contribute to achievement of Fund's objectives and result areas • Long-term impact beyond a one-off investment • Wider economic, environmental, social (gender) co-benefits • Country ownership and capacity to implement (policies, climate strategies and institutions) • Economic and, if appropriate, financial soundness, as well as cost-effectiveness and co-financing for mitigation • Vulnerability and financing needs of beneficiary in targeted group 23

  24. Country Programming – an Iterative Process

  25. Fit-for-Purpose Accreditation Fiduciaryfunctions Mandate & track record • Basic • Specialized • Alignment with Fund objectives • At least 3 year of operations Project size Environment & social risk category • Micro ( <10M) • Small (10-50M) • Medium (50-250M) • Large ( >250M) • A (high) • B (medium) • C (minimal or no)

  26. Applying for Accreditation What you need to apply* • Nomination by your NDA(s) or focal point(s) (for subnational, national and regional entities applying under direct access) • Intended projects/programmes (for information purposes) • Evidence of how your organization can meet the GCF’s fiduciary standards, ESS and gender policy • Track record, which should include climate change-related projects/programmes and the fiduciary, environmental and social practices applied The accreditation application will include the following sections: Background and contact information of the applicant entity Information on the ways in which the institution and its intended projects/programmes will contribute to furthering the country’s climate strategies and action plans, in line with GCF’s objectives Information on the scope of intended projects/programmes and estimated contribution requested for an individual project or activity within a programme Basic fiduciary criteria Applicable specialized fiduciary criteria Environmental and social safeguards (ESS) Gender * This list is not exhaustive.

  27. Accreditation Process Steps OAS account issued Application received and accreditation fees paid Stage I Completeness check 1.) Pre-accreditation 2.) Accreditation NDA/FP nomination* received 1B 2A 2B 1A OAS request received 2E 2D 2C Stage III Legal arrangements Stage II (Step 2) Board decision Stage II (Step 1) AP Review AMA negotiation AMA execution AMA effectiveness AMA: Accreditation Master Agreement AP: Accreditation Panel NDA: National Designated Authority OAS: Online Accreditation System *An NDA nomination letter is required for Direct Access entities only. Nomination is not required for International Access entities.

  28. Project Approval Process NDA No-objection Generation of Project idea Legal arrangements Accredited Entity Concept note (optional) Submission of funding proposal 1 6 2 Trustee 3 Analysis and recommendation Secretariat Possible request for Readiness support by NDA Possible support from Project Preparation Facility to AE 4 Technical Advisory Panel Board Decision GCF Board 5

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