FINLAND-IFC BLENDED FINANCE FOR CLIMATE PROGRAM Helsinki - Paris - Washington DC TC March 20, 2018
Key Objectives • Address market barriers that prevent faster, more widespread or longer- term sustainable adoption of low-carbon technologies and business models in least developed, low income, and lower middle income developing countries • Support private sector clients to capture business opportunities and avert or adapt to the risks that climate change will bring • Leverage and bring private capital that will help developing and emerging countries grow on a low carbon path and build resilience to climate impacts • Catalyze investments with strong development and climate benefits that would not happen otherwise • Demonstrate the business case for higher-risk projects and create markets for low carbon and climate change mitigation and adaptation solutions
How does it work? • Program size: EUR 114 million • Over a 5 year investment period, funds from the program will be used as co-investments in the form of concessional finance • Funds co-invested together with IFC’s commercial investments to support private sector projects with high development impact potential • In projects where fully commercial solutions are not yet possible because • The risks are considered too high, or • The returns are either unproven, or • Returns are not commensurate with the level of risk • Investments in climate change mitigation and adaptation projects to move ahead with innovative, early-stage climate projects
Focus Sectors Climate Change Mitigation Climate Change Adaptation • Renewable energy • Meteorology • Energy efficiency in buildings • Water and sanitation • Agriculture • Food security • Forestry and land-use • Sustainable forestry • Water and wastewater • Transport Focus Countries • The program focuses on supporting projects in the least developed countries, other low-income countries, and lower-middle income countries and territories
Instruments • Equity • Focus on higher risk investments to support • Senior Debt projects with potential high development impacts • Mezzanine debt • Guarantees Risks Impact
Levers of Concessionality •Lower rates • Structural vs Contractual •Ex-post • Waterfall •Ex-ante • Rank • Security Pricing Subordination Local Tenor Currency •Longer grace •Longer tenor •Credit Pass •Sculpted Through Swap repayments
For further information, contact: Kruskaia Sierra-Escalante (or) Jussi Tapio Lehmusvaara IFC Blended Finance www.ifc.org/blendedfinance
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