BOOSTING CIRCULAR ECONOMY IN THE PRIVATE SECTOR ACROSS THE EBRD REGION Workshop – Driving Towards Circularity Bratislava, 6-7 November 2017 Sumeet Manchanda Principal, Energy Efficiency and Climate Change team
What is the EBRD • Multilat ilateral al financing ing instit titution tion established in 1991 to support transition to market economies • Owned by 66 countries, the EU and the EIB Estonia — Latvia — Lithuania — Belarus Poland — Ukraine Slovakia — Kazakhstan — Moldova Hungary — Mongolia Russian Slovenia — Romania Federation Croatia — Serbia Bosnia & H. — Uzbekistan — Bulgaria — Kosovo Montenegro — Georgia — — Kyrgyz Republic Albania — Armenia — Macedonia FYR Turkey — Tajikistan Azerbaijan — Turkmenistan Greece Tunisia — — Lebanon Cyprus — Morocco — Jordan Egypt — • € 30 billion capital base 3 key operational principles • € 41 billion portfolio • Sound banking • € 9.2 billion average annual • Transition impact business in the past 3 years • Environmental sustainability 2
Mainstreaming green financing EBRD cross-sectoral strategies • Since 2006 the EBRD has adopted cross-sectoral strategies • to mainstream across the Bank’s projects, and to increase the share of the Bank’s business represented by • measu asures s whic ich h enhance ance the efficien icient use of ener ergy and d resou sources es (water, materials) and contribute to limiting the effects of climate change. • The Green Economy Transition (GET) aims to further scale up the Bank’s green business, up to 40% of its busines iness s volum lume e by 2020. 3
Mainstreaming green financing Results in 2006 – H1 2017 FINANCED SIGNED REDUCED 1,300+ 85 million € 23 billion of green financing Green projects and tonnes of CO 2 /year credit lines 36% of total 200 million 1,000+ directly financed m 3 /y business projects since 2013 290 credit lines to local FIs 4
Green financing business model • direct & indirect financing • investment grant support • blended concessional finance • develop sustainable energy lending • climate vulnerability risk assessments • transition gaps & • address sustainability & market scoping environmental market failures • strengthen the institutional & regulatory context 5
EBRD financing channels Large DIRECT FINANCING AND SUPPORT borrowers EBRD Company 1 Energy Efficiency team Company 2 FINANCING VIA PARTNER FINANCIAL INSTITUTIONS Local financial Small institutions borrowers Bank /Leasing EBRD co Energy Efficiency team External technical assistance team Financing Technical Assistance 6
EBRD Circular Economy Performance 2014 - 2016
What the EBRD is doing in the Circular Economy space Finance Annual review of EBRD investments including CE components. 153 transactions in 2016 Policies Contribution to the development of policies promoting CE in the EBRD countries of operations (e.g. Ecodesign directive in Ukraine) Innovation Development of Innovation Vouchers Scheme in Ukraine and Serbia Partnerships Development of a Material marketplace in Turkey, in cooperation with BCSD Network Member of the FinanCE group, a spin-off of the Ellen MacArthur Foundation 8
Review of Historic CE Performance (1/3) ASSESSED EBRD PROJECTS TO DETERMINE: • Use of circular measures Potential for use of circular measures • 368 EBRD investments DEFINED CIRCULAR AS: reviewed • Operational activities which take advantage of existing energetic or material flows for In 37 countries additional utility or improve the material efficiency of products From 2014 to 2016 EXCLUDED: • Renewable energy • Water input reduction measures not including water recycling 9
Review of Historic CE Performance (2/3) CATEGORISE EACH PROJECT BASED ON: Use or potential use of circular 1 measures 2 Public or private 3 Industry sector 4 Geography 10
Review of Historic CE Performance (3/3) KEY OUTCOMES: • About 42% of green investme estments nts of the EBRD include a circular component in the analysed period, corresponding to 153 projects; • The sectors where most of circular components have been implemented are Agribus usiness ness and Manufac actu turin ring and Service ces; About 2/3 of the circular projects have been implemented in the privat ate sector or; • • Turkey y and Ukraine aine are the countries where most of the circular investments have taken place. 11
Case Studies
Circular Economy work with Automotive Sector Clients R&D/ Innovation in Circular Economy Financing and support to company producing automotive circulation fluid systems, for R&D to reduce material consumption, make lighter product and re-use materials CE with Brisa – Major Tyre Manufacturer Financing and support to tyre specialist, with focus on material efficiency, product re-use and recycling and working with value chain 13
Sisecam glass recycling € 44 million EBRD Finance >100,000 GHG Reduced ton CO 2 eq / yr Supported Turkey’s largest glass producer to procure machinery and equipment for glass recycling and high- quality cullet production. • Sublease state-of-the-art glass recycling to cullet producers to: • Increase recycling rates • Improve cullet quality 14
Sisecam glass recycling 15
Voskhod Chromium - Kazakhstan EBRD Finance $ 130 million $ 5.5 million GET Finance 10,000 GHG Reduced ton CO 2 eq / yr Improved the operational efficiency of a chromium mining and processing facility in Kazakhstan. Measures promoted reductions in resource intensity and increases in resource reuse, including: • Mining wastewater recycling • Further processing of mining tailings to increase chromium recovery 30 October, 2017 16
Low-Carbon Roadmap for the Egyptian Cement Industry Defining and implementing a low-carbon pathway for the sector including measures and investments that promote a circular economy. Working with industry representatives to implement the roadmap’s recommendations: • significantly increase the use of alternative fuels • promote the systematic reuse of industrial by-product • institute adequate waste management legislation 30 October, 2017 17
Other initiatives
The Near Zero Waste (NØW) Programme General features • EBRD strategic initiative in Turkey to promote waste minimisation and valorisation Funded by the EBRD and Clean Technology Fund (CTF) • • Technical assistance from the EU Instrument for Pre-accession Assistance 2013 (EU IPA 2013) funds
The Near Zero Waste (NØW) Programme Turkish Materials Marketplace (1/4) Mainstreaming the concept of circular economy in Turkey through Materials Marketplace: Objective: facilitate cross-industry materials reuse among Turkish companies • Commercially-based materials exchange platform • Create a collaborative business network • One company’s waste and by-products become another company’s raw material Cloud-based • http://turkey.materialsmarketplace.org/
The Near Zero Waste (NØW) Programme Turkish Materials Marketplace (2/4) Output L M A A N By-product R D K F By-product E I T L L Output 30 October, 2017 21
The Near Zero Waste (NØW) Programme Turkish Materials Marketplace (3/4) Output L M A By-product A N R D Materials Marketplace K F E I T L By-product L Output 30 October, 2017 22
The Near Zero Waste (NØW) Programme Turkish Materials Marketplace (4/4) Why initiate the Materials Marketplace in Turkey? • Project endorsed by the Ministry • Mature economy and business- of Environment enabling environment • Launch study on end-of-waste • Transition to a circular economy and criteria to help complete improving waste management are harmonisation of local waste of strategic importance regulation with that of the EU • Accelerating harmonisation of • Link to new investments – R&D Turkish waste legislation with the and innovation EU Directives • Bring in access to technical and • Demonstration effect on other legal support to help taking EBRD CoOs advantage of opportunities 23
BEFORE Steel Offal A steel by- product of General Motor’s stamping operations. In the US, GM produces ~40,000 pieces per month in about 12 different shapes and sizes. Due to its consistent size, quality and predictable quantity, pieces have reuse potential and value beyond traditional scrap metal markets Benefit Supply $ 5 13 Million USD Thousand Tons
AFTER Steel Offal A steel by- product of General Motor’s stamping operations. In the US, GM produces ~40,000 pieces per month in about 12 different shapes and sizes. Due to its consistent size, quality and predictable quantity, pieces have reuse potential and value beyond traditional scrap metal markets Benefit Supply $ 5 13 Million USD Thousand Tons
Innovation vouchers scheme Serbia and Ukraine • An Innovation Voucher - a voucher provided to SMEs to co-fund development, testing, certification, deployment or other external services needed to improve competitiveness, market reach, or reduction in energy/GHG emissions of commercially available climate technologies that they are developing or utilizing • Two schemes implemented, one in Ukraine and one is Serbia • The ultimate objective is to promote the development of a R&D supply chain in the countries, and the access to resource efficient technologies. 26
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