Post on 31-Dec-2015
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Steve GormanProgram Manager
Global Environment ProgramEnvironment Department
The World Bank Group
World Bank provided $46.9 billion for 303 projects in developing countries worldwide in 2008;
Available Resources for Climate ChangeAvailable Resources for Climate Change
FY09 estimates are projections
Resourcesto address
Climate Change
Mitigation(Total Needs est.$170bn+ / year) Both M&A
Adaptation(Total Needs est. $28-67bn / year)
UNDP$ 0.09- 0.12 blln for adaptation
GFDRR $ 0.07 blln
Adaptation Fund
$ 0.3-0.5 blln
GEF $ 0.25 b
Adaptation funding
Other MDBs$3 billionfor FY09
EUGlobal Climate
Change Alliance€ 0. 3 blln
Bilateral Donors
$ ?
PrivateDonors
$ ?
FCPF$0.2 bREDD
GEF$ 0.25 bllnfor FY09
WBG RE & EE Progam(IBRD/IDA/IFC/MIGA)
$3.4 billionfor FY09
Carbon Market: CDM&JI
~ $ 8 billionfor FY09
Climate Investment
Funds (MDBs)$6.1 billion
MLF $2b since inception
?
?
GEF: Global Environment Facility Allocated $2.4b to CC mitigation from 1991-2008 Current GEF-4 Replenishment $1b for CC, $250m per year GEF-5 Replenishment beyond 2010
CIF: New funds, esp. Clean Technology Fund (CTF) Pledges of $6.1b across all components of CIF Pledges of $5.2 b especially for CTF
CF: Newly established Carbon Partnership Facility (CPF) Existing funds of $2b for period up to 2012 largely committed CPF pledges of $200m will open first tranche for operation
World Bank Group’s own resources FY08 Approvals of $2.7b for renewables and energy efficiency,
including GEF, IFC, MIGA, IBRD, and IDA Target of $3.3 billion for FY’09 to EE and RE
How to utilize the above for HCFC phase-out and maximize the impact of the limited resources
available?
Year
Cash Flow
(-)
(+)
Baseline development project—BAU—no GHG mitigation
Year
Cash Flow
(-)
(+)
Redesigned project—higher costs & benefits
Year
Cash Flow
(-)
(+)
GEF/MLF
Year
Cash Flow
(-)
(+)
CTF
Year
Cash Flow
(-)
(+)
CF
Year
Cash Flow
(-)
(+)
GEF/MLF
CF
CTF
Each must be used in a manner consistent with its objectives and approaches GEF: Focus on barrier removal—source of grant
funding to establish conditions for market sustainability
CTF: Focus on investment support—providing investment support in form of loans, grants or guarantees
CPF: Performance reward to provide extra revenue to scale-up carbon-reducing investments
MLF: Identify applications of strategic importance to phase-out and find intersection with above
May be linked simultaneously in same project structure or sequentially through a consistent programmatic approach
MLF provided $1m grant—30 chillers Total market has 189 ODP t Given GWP, equals 378,000 t CO2 eq
GEF provided $6m—185 chillers Interested in energy savings, 4.8 TWh over 20 years Equal to 3.9 m tonnes CO2 eq plus replication
CDM-Spanish carbon fund Purchase CERs from project—revenues to revolving
fund Flows of CER’s, 982,000 CER’s valued at $12m
Private investors---$80m to make investment complete
GEF-directGEF-direct4.6 m tCO4.6 m tCO22ee
CDM CDM 982,000 tCO982,000 tCO22ee
MLF MLF 95,00095,000tCO2etCO2e
GEF-GEF-indirectindirect
8 m tCO8 m tCO22ee
CDMCDM$12 million$12 million
GEF GEF $6 million$6 million
MLF MLF $1 $1 millionmillion
Private SectorPrivate Sector$80 million$80 million
Leveraging enables MLF
Funds to achieve
greater impact and investment
Objectives are not identical, but overlap can be found To reduce growth in GHG emissions linked to HCFCs Condition markets; scale-up markets; enhance revenues
Instruments are compatible with each other—can be used sequentially or simultaneously Requires foresight, strategic thinking Building upon HCFC phaseout for greater EE & GHG reductions
Some complexities do exist Issues of eligibility Focus on larger countries Changing strategy and focus Sunset clause
Although programmatic approaches can be tailored to all four instruments, need to focus on problem at hand
IFFIm was launched in 2006 thanks to the initiative of the United Kingdom Government. IFFIm is also supported by France, Italy, Spain, Sweden, Norway and South Africa who have together pledged to contribute US$ 5.3 billion to IFFIm over 20 years.
This strong financial base enables IFFIm to have a triple-A rating from the three major rating agencies.
IFFIm raises finance by issuing bonds in the capital markets and so converts the long-term government pledges into immediately available cash resources.
The long-term government pledges will be used to repay the IFFIm bonds. The World Bank acts as financial adviser and treasury manager to IFFIm.
DonorsUp to 20-
year Grants
Financial Manageme
nt
International Facility for Ozone/Clima
te (IFFOC)
Country Driven ODS and Climate
Protection Programs
InvestorsCapital Market Funding
Carbon Revenues from Compliance
and Voluntary Markets
Opportunities do exist to utilize multiple sources of funding in projects that will replace HCFC with the most optimum ozone and climate friendly technologies
Innovative financial engineering model to monetize future commitments to support up-front investment exists and could be applied to future commitments (MLF contributions) and future revenues (CERs)
Strategic thinking is necessary to piece together puzzle and maximize global benefits
As much as strategy, patience may be even more necessary
Cooperation and synergies are necessary to leverage large impacts and benefits