Engaging with the Green Climate Fund Tony Clamp

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 § Comprehensive Spectrum of Offerings to Countries § Dedicated Private Sector Facility A mandate to promote low-emission and climate resilient development in developing countries 2

A Growing Portfolio Approximately $3. 7 B for 76 projects in over 60 Countries Mexico Eastern Caribbean El Salvador Samoa Colombia Ecuador Peru Cook Islands Chile Kazakhstan Serbia Georgia Mongolia Armenia Uzbekistan Moldova Tajikistan Tunisia Jordan Bhutan Morocco Egypt Pakistan Bangladesh Senegal Mali India Viet Nam Gambia Nigeria Ethiopia Sri Lanka Nauru Benin Uganda Tuvalu Maldives PNG Kenya Solomon Fiji Rwanda Islands Tanzania Mauritius Vanuatu Malawi Namibia Madagascar South Africa Argentina Status as of B 19 (Feb 2018) 3

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

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

GCF Approach – Other Partnerships Other modalities for involvement include: Executing Entity § Any entity through which GCF funds are used for the purposes of implementing a project. Delivery Partner § Institutions selected by the NDA to implement activities approved under the Readiness Program. Service Provider § Any entity which the GCF directly contracts to carry-out specific work based on a solicitation of a particular request. 6

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

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

Japan and the GCF § Contributor: USD 1. 5 bn pledged (#2) § Board seats: Board and alternate Board member sinception (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

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

PSF Business Model Country Ownership Project Accredited Entity 11

Portfolio Composition as of B 19 Private Sector Committed amount of GCF funding (17 approved projects) Grant 7% 5 4. 5 $4. 66 billion 4 Equity 30% 3. 5 3 2. 5 Guarantee 2% Loan 61% 2 1. 5 1 $1. 51 billion 0. 5 0 GCF USD 1. 51 B Co-Financing 12

Private Sector Projects as of B 19 Name Country AE B 11 Kawi. Safi Ventures Fund in Eastern Africa Kenya, Rwanda Acumen $25 M $110 M B 11 Energy Efficiency Green Bond in LAC Mexico IDB $22 M $780 M B 13 Climate Action and Solar Energy Development Chile CAF $49 M $265 M B 14 Sustainable Energy Financing Facilities (SEFF) Africa/ Asia / EE (10) EBRD $378 M $1, 419 M B 14 Sustainable Landscapes in Eastern Madagascar CI/EIB $54 M $70 M B 14 Universal Green Energy Access Programme (UGEAP) Africa (5 countries) DB $80 M $300 M B 15 Business loan programme for GHG emission reduction Mongolia Xac. Bank $20 M $60 M B 15 SCF Capital Solutions South Africa DBSA $12 M $34 M B 15 Catalyzing Private Investment in Sustainable Energy in Argentina IDB $133 M $653 M B 16 Geeref Ne. Xt Global (29 countries) EIB $265 M $765 M B 16 Egypt Renewable Energy Financing Framework Egypt EBRD $154 M $1, 007 M B 18 Renewable Energy Program – Solar #1 Mongolia Xac. Bank $9 M $18 M B 18 GCF-EBRD Kazakhstan Re. Framework Kazakhstan EBRD $110 M $557 M B 18 Low Emissions and Climate Resilient Agriculture Risk Sharing Mexico, Guatemala IDB $20 M $158 M B 19 Acumen Resilient Agriculture Fund (ARAF) Ghana, Nigeria, Uganda Acumen $26 M $56 M B 19 Zambia Renewable Energy Financing Framework Zambia Af. DB $52. 5 M $154 M B 19 Line of Credit for Solar rooftop segment India NABARD $100 M $250 M $1. 5 B $6. 7 B Total GCF Amount Total Amount 13

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

Private Sector Projects Egypt Renewable Energy Financing Framework Country GCF financing Accredited entity Financial instrument Egypt USD 154. 7 million EBRD Loan and Grant § USD 150 M in loan and USD 4. 7 M 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 t. CO 2 e 15

Private Sector Projects Renewable Energy Program – Solar #1 Country GCF financing Accredited entity Financial instrument Mongolia USD 8. 65 million Xac. Bank Loan § USD 8. 65 M 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 t. CO 2 e 16

Private Sector Projects GEEREF Ne. Xt Countries GCF financing Accredited entity Financial instrument Multiple Countries Global USD 265 million EIB Equity and Grant § USD 250 M in equity and USD 15 M 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 t. CO 2 e 17

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

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

Annex

Portfolio Composition 76 projects/programmes with USD 3. 7 billion in GCF funding Requested and committed amount of GCF funding Status as of B 19 (Feb 2018) 21

GCF Projects Under Implementation Projects underimplementation Total Disbursed: USD 147. 2 M 100 93. 8 90 80 GCF funding $596 million Co-financing $1, 275 million 70 60 53. 4 50 40 30 Publi Privat 20 10 GCF + Co-financing = Total USD 1, 871 million 0 Projects composition § Public sector (15) § Private sector (3) 22

Six Investment Criteria Against which proposals are assessed Impact potential Paradigm shift potential Sustainable development potential Country ownership Efficiency & effectiveness Responsive to needs of recipients 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

Country Programming – an Iterative Process Country programme Results & learning Entity programme Project implementation Pipeline development Funding proposals

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

Applying for Accreditation The accreditation application will include the following sections: 1. Background and contact information of the applicant entity 2. 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 3. Information on the scope of intended projects/programmes and estimated contribution requested for an individual project or activity within a programme 4. Basic fiduciary criteria 5. Applicable specialized fiduciary criteria 6. Environmental and social safeguards (ESS) 7. Gender What you need to apply* þ Nomination by your NDA(s) or focal point(s) (for subnational, national and regional entities applying under direct access) þ Intended projects/programmes (for information purposes) þ Evidence of how your organization can meet the GCF’s fiduciary standards, ESS and gender policy þ Track record, which should include climate change-related projects/programmes and the fiduciary, environmental and social practices applied * This list is not exhaustive.

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

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