The Global Energy Efficiency and Renewable Energy Fund
The Global Energy Efficiency and Renewable Energy Fund (GEEREF) Using limited public funding to leverage private finance for the global fight against climate change and poverty Ms Astrid Ladefoged, European Commission, DG Environment European Commission
Barriers to private investment l Energy efficiency and renewable energy projects face difficulties in raising commercial funding. Lack of risk capital in developing countries and transition economies. l Long pay-back periods on clean technology are an obstacle to investors. This is even more the case in regions that are considered to be high-risk. l Small projects can have higher administrative and transaction costs. Consequently international financial institutions tend not to provide equity finance for projects below 10 million Euros. European Commission
Overcoming those barriers l Attract private investors by using public money to protect them against the risks. Innovative public-private partnership - neither lend nor grant funds, but invest. l Equity finance via investment structures to regional energy efficiency and renewable energy projects and initiatives. l Public-private initiative: subordination of public funding; return preference (up to 10% p. a. ) for private funding. l Technical Support: EUR 5 m for technical assistance, managed by the European Investment Fund. European Commission
Where will GEEREF invest? l Estimated investment in 10 to 15 “Regional Funds” with projects in developing countries with a priority to meeting the needs in sub-Saharan Africa, the Caribbean and the Pacific. l Commercial finance structures, which provide equity finance to small and medium sized regional energy efficiency and renewable energy projects. Combining efficiently financial viability with sustainable social and environmental returns. l European Commission
What will GEEREF fund? For example: l Biomass, wind, hydro, solar, geothermal l Nuclear power excluded l Utility based and distributed generation, and biofuels l Small and medium sized projects and initiatives: EUR 10 m with preference on EUR 1 m l Energy efficiency European Commission
Structure European Commission Investors Donors GEEREF Investments in PE/VC Funds Emerging Markets Ren. /Sust. Energy Funds Ren/Sust Energy Projects & SMEs Emerging Markets Ren. /Sust. Energy Funds Established Intl Infrastructure Funds Co-investments with selected Funds Emerging Markets Ren. /Sust. Energy Funds Ren/Sust Energy Projects & SMEs European Commission
When will GEEREF exist? l l l 2007: EUR 80 million EC budget identified and budgeted 2007 -2010. Trust agreement with the European Investment Fund (EIF), transfer of first tranche (EUR 24 m) and technical support facility to EIF. European Commission launch event in Bali together with Germany and Norway. Corporate establishment 12 March 2008 - expected operational end June/begin. July 2008. Investments to start a bit later this year. European Commission
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