PROJECT FINANCING BY MAINSTREAMING ENVIRONMENTAL AND SOCIAL ISSUES

PROJECT FINANCING BY MAINSTREAMING ENVIRONMENTAL AND SOCIAL ISSUES IN URBAN PLANNING September 4, 2018 Frank Wildschut, Arcadis

Outline § Introduction ESG § E&S requests of FIs § Renewed focus on E&S § World Bank ESF § Case studies § Arcadis support to UN-Habitat © Arcadis 2017

Introduction https: //www. youtube. com/watch? v=z. GJd 1 u. FRDJo § Assuring project finance: § Why? § Who? § What to do from an urban planners perspective? Risk management and positive impacts § Interests from financiers compliance to international and local standards © Arcadis 2017

E&S requests of FIs Risk- and Impact-based Approach § A strong emphasis on risk management and achieving sustainable development outcomes over the life of a project. § Greater emphasis on strengthening borrower frameworks and capacity building, which is recognized as a central development goal by the World Bank and most of its shareholders. § Broadened social assessment and management of environmental and social risks. § Increased harmonization with development partners and recognized good international practices. § Renewed and strengthened partnerships with borrowers. § Helps ensure social inclusion. § Explicitly references human rights in overarching vision statement. © Arcadis 2017

Renewed focus on E&S New themes included: § Climate change (impacts at the project level); § Sustainable resource management; § Labor and working conditions; and § Community health and safety. Including good international industrial practices: § Efforts to measure and reduce greenhouse gas emissions; § Over-arching non-discrimination principle augmented by a new mandatory World Bank Directive § Requires stakeholder engagement throughout the project cycle. § Providing grievance mechanisms for project-affected communities and workers employed by the Borrower in a project; and §© Arcadis Introducing Free, Prior, and Informed Consent (FPIC) of Indigenous Peoples 2017

ESF Environmental and Social Standards 1 -10 1. Assessment and Management of Environmental and Social Risks and Impacts 2. Labor and Working Conditions 3. Resource Efficiency and Pollution Prevention and Management 4. Community Health and Safety 5. Land Acquisition, Restrictions on Land Use and Involuntary Resettlement 6. Biodiversity Conservation and Sustainable Management of Living Natural Resources 7. Indigenous Peoples/Sub-Saharan African Historically Underserved Traditional Local Communities 8. Cultural Heritage 9. Financial Intermediaries 10. Stakeholder Engagement and Information Disclosure © Arcadis 2017

Project Categorization WB E&S SAFEGUARDS WB ESF Cat A projects have the potential for significant environmental and social impacts and require a very thorough environmental and social assessment A more comprehensive classification §High; §Substantial; §Moderate; and §Low Cat B projects have limited impacts and mitigation measures are readily identifiable Consider type, location and scale of the project Cat C project is likely to have minimal or no adverse environmental The nature and magnitude of the potential risks and impacts The capacity and commitment of the Borrower to manage such risks and impacts. © Arcadis 2017

Overview of WB ESF project implimencations © Arcadis 2017

Arcadis support to UN-Habitat § Shelter missions to assure financing by the Adaptation Fund: § Malawi (Zomba) § Mozambique (Chokwe) § Madagascar (Marondava) § Comoros (Moroni) § More to come © Arcadis 2017