Innovative GEF-6 Programming for Sustainable Energy for All David E Rodgers June 2014 1
Record GEF-6 Replenishment � In April, the GEF concluded its year long replenishment process receiving a commitment of $4.43 billion from donors for the GEF-6 cycle � Donors also endorsed innovative strategies that include: – Integrated approach pilots – Innovative programming – Non-grant instruments – Expanded private sector engagement � GEF-6 projects need to deliver a combination of innovation, synergy, speed, and scale 2
GEF-6 will test delivery of integrated approaches that address discrete, time-bound global environment challenges, attack drivers of environmental degradation, provide unique added value, and build strong stakeholder relationships • Taking Deforestation out of Commodity Supply Chains • Sustainable Cities – Harnessing Local Action for Global Commons • Fostering Sustainability and Resilience for Food Security in Sub-Saharan Africa. For sustainable energy, look for opportunities to partner in these efforts 3
Innovative Programming for Climate Change � Performance-based financing and incentives for projects or sectors � Multi-focal area projects with climate benefits � Flexible programming for high-impact projects and under-served countries (SIDS and LDCs) � Flexibility for regional projects and programs � Catalyzing private sector engagement including – PPS – risk-mitigation and structured financing tools – global certification and standards program – SME Small Grant/Loan Program GEF-6 Programming Directions, GEF/R.6/20/Rev.04, March 31, 2014, Annex I, pages 70-72 4
GEF-6 Pilot for Non-Grant Instruments � Under the GEF instrument, a non-grant is a form of concessional finance that has the potential to earn a return (or reflow). � Reflows are available to expand the pool of GEF resources available for future investments. Examples: � – Contingent Grant – Credit Guarantee or Risk Guarantee Fund) – Equity Fund Investments – Concessional Loans – Performance Risk Guarantee – Revolving Fund – Risk Sharing Fund for Loan Provision � GEF-6 Non-grant pilot will be available for private sector and National Government � $110 million will be available for this pilot and can be global, regional, or country level projects. 5
Innovative Non-grant Approaches in GEF-5 � Under the operational modalities developed in coordination with the MDBs ( C.42.Inf.08 ) five PPPs were approved – $20 Million with AfDB for renewable energy loans • Co-financing $240 million – $15 Million with IDB for equity investments in clean energy and bio- diversity • Co-financing $266 million – $15 Million with EBRD for structured financing to invest in energy efficiency and renewable energy in North Africa • Co-financing $141 million – $15 Million with IDB for a new clean energy equity fund for the Caribbean • Co-financing $200 million – $5 Million with IDB for a investments in climate smart agriculture (approved in work program by Council May 2014) 6
Enhancing Private Sector Engagement � Build on lessons learned to mainstream private sector engagement across the portfolio in country projects and integrated approach pilot � Fine-tune interventions to match country and private sector needs � Focus agencies and partners on proven intervention models � Prioritize areas where GEF can provide unique added value and catalyze market transformation 7
We note three different types of private sector actors with whom GEF can engage Type Description/Examples Capital providers ▪ Pension funds, VCs 1 Financial intermedi- ▪ Investment banks, commercial banks, financial 2 aries and facilitators advisory services Industry players – ▪ Large retail, manufacturing companies, project 3a 3a large corporations developers, etc. Industry players – ▪ Full time staff below 250 or less depending on 3b 3b SMEs the country Industry players – ▪ Small start-ups with full time staff below 10 3c 3c individuals/ entrepreneurs 8
In this eco-system, GEF regularly uses four different intervention models Type Description Enabling policy ▪ Policy and regulatory development (e.g. feed-in tariffs for 1 environments renewable energy, regulatory incentives that guarantee markets for new sustainability innovations and encourage business to make long-term investments) ▪ Consistency and standardization Incremental ▪ Loans, equity, and performance based funding/guarantees (e.g. 2 financing co-investing in research for more environmental and cost- (Concessional / effective products and/or processes?) risk reduction ▪ Risk-sharing facilities ▪ Policy risk insurance ▪ Structured financing Corporate alliances ▪ Collaborative goal setting for transformational targets (e.g. 80% 3 and interventions cocoa certified sustainable by 2020) ▪ Certification and supply chain management (e.g. Forest Stewardship Council, Marine Stewardship Council) ▪ MRV and risk- valuation methodologies (Risk reduction tools ?) Capacity building ▪ Advisory services (e.g. for SMEs) 4 and incubation ▪ Technical assistance and innovation (e.g. R& D to co-develop products/services) ▪ … ▪ Aggregation ▪ Information and communications technology applications 9
These three different types of private sector actors form a complex eco- system, interacting with consumers and the global environment Public Policy ▪ Multinational to Subnational 1 Capital providers 2 Financial intermediaries and facilitators 3 Industry players Large Individuals/ SMEs corporations entrepreneurs Global environmental commons Consumers NGOs, CSOs, think tanks 10
With these four intervention models, GEF can fine-tune its approach and partnerships to achieve targeted results Enabling public 1 policy environments ▪ Multinational to Subnational 2 Incremental financing Capital providers Financial intermediaries and facilitators Capacity 4 Industry players building and Corporate incubation alliances 3 Large Individuals/ and SMEs corporations entrepreneurs interventions Global environmental commons Consumers NGOs, CSOs, think tanks 11
GEF's Proven Intervention Models for Private Sector Engagement Financial players Industry players Financial intermediaries Capital Individuals/ Types of private sector and market providers Large corps SMEs entrepreneurs actors facilitators Renewable Feed-in-Tariffs in 60 countries Strategic Intervention models program ESCO Reform in Eastern Europe, China, Turkey. for West Enabling policy 1 Africa environments Nagoya Protocol sharing agreements Global Ballast Earth Fund Russia Risk-sharing Chile ESCO Concessional financing/ GEF-5 PPPs Energy 2 Facilities in Risk Fund risk reduction Efficiency 12 countries GEF Crew- Fund SCAF wastewater Corporate alliances en.Lighten 3 Carbon Index and interventions Soft GEF-UNIDO China Utility Best Commodities Capacity building Cleantech Energy practices for 4 and incubation Programme Efficiency Energy (CHUEE) Management BIODIVERSITY CLIMATE CHANGE MITIGATION INTERNATIONAL WATERS SUSTAINABLE FORESTRY 12
Summary � GEF is prioritizing innovative strategies that include: – Integrated approach pilots – Innovative programming – Non-grant instruments – Expanded private sector engagement � GEF-6 projects need to deliver a combination of innovation, synergy, speed, and scale � GEF is committed to using these approaches to support the Sustainable Energy for All initiative 13
Join Us! David E. Rodgers Senior Climate Change Specialist drodgers@thegef.org 202-458-9869 14
Recommend
More recommend
