FINANCING GREEN PROJECTS IN AGRIFOOD SECTOREXPERIENCE FROM THE EBRD REGION
Dana KupovaPrincipal, Energy Efficiency and Climate Change
OFFICIAL USE
What is EBRD?
2
• Multilateral financing institution established in 1991 to support
transition to market economies
• Owned by 65 countries, the EU and the EIB
• €30 billion capital base
• €41 billion portfolio
• €9.2 billion average annual
business in the past 3 years
3 key operational principles
• Sound banking
• Transition impact
• Environmental sustainability
OFFICIAL USE
The EBRD has a target of 40% of its
investments to be towards green projects
by 2020.
The share of green investment in
agribusiness was 25% in 2016, equivalent
of EUR 200m.
How we differ in terms of project assessments?
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Credit and financial risks
Environmental and social risks
Integrity analysis
Civil society engagement
Market transition impact
Green Economy Transition impact
How projects
are assessed
at the EBRD:
OFFICIAL USE
How does the EBRD support?
4
EBRD
(+OTHER) COMMERCIAL
FINANCING
CONCESSIONAL
CO-FINANCING
POLICY
DIALOGUE
TECHNICAL
ASSISTANCE
• Directly from EBRD: loans, equity
investments or guarantees
• Mobilising additional
commercial sources
• Indirectly via local partner
financial institutions:
lending, leasing
• Working with
governments on
legislation that creates
optimum conditions for
green investments
• Supporting the
development of legal
instruments and best
practice guidelines
For eligible investments which
face particular barriers:
• Targeted facilities priced
below market terms
• Selective partial investment
grants or incentive payments
• First-loss cover or guarantees
• Resource efficiency audits
• Capacity building for local
financial institutions (staff
training, marketing, green retail
lending products)
• Climate vulnerability assessment
• Project structuring support
(e.g. tendering, investment
guidelines)
• Support to adopt operational
or CSR-type standards (energy
management, buildings
certification, reporting)
OFFICIAL USE
What are the key barriers for technology deployment?
Low market
penetration of
technologies
Knowledge gaps &
capacity
Inadequate
regulatory
framework
Availability of
financial
instruments
Underdeveloped
supply chains
FINTECC provides information on climate technologies through its
technical assistance
FINTECC offers project preparation support to develop bankable
projects
FINTECC is working with governments to support frameworks that
incentivise technology transfer
FINTECC offers grants along with EBRD lending to support investment in
eligible climate technologies
FINTECC connects clients with suppliers of climate technologies
OFFICIAL USE
How we address the barriers?
Example 1: FINTECC approach
FINTECC
It supports companies to implement
advanced climate technologies that
reduce greenhouse gas emissions and/or
increase climate resilience by providing
grants and technical assistance in the
context of an EBRD investment.
EXAMPLES OF ELIGIBLE
TECHNOLOGIES – early adopters
• High-grade thermal insulation of
buildings
• Solar cooling
• Efficient irrigation systems
• Heat recovery systems
• LED lighting
• Water, fertilized management systems
SECTORS & CLIENTS
All private sector , non multinational
clients are eligible.
The programme targets primarily the
Corporate sector.
COUNTRIES
FINTECC is funded by the GEF, the EBRD
and the EU
OFFICIAL USE
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Sustainable Value Chains
Company financed directly by
the EBRD
Tier 1 suppliers
Tier 2 suppliers
EBRD financing
EBRD technical assistance
(through established donor
funded frameworks of the EBRD)
Aggregator
• Technical assistance for
innovation in operations,
productivity, management and
mitigation of environmental,
sustainability and health and
safety risks, adoption of quality
standards.
EBRD Financing Technical Assistance
How we address these barriers?
Example 2: Value chain approach
• A number of products of the EBRD already
address SMEs and assist them in becoming
more competitive and efficient, such as credit
lines or Advisory Services for Businesses
• New instruments are being piloted which leverage
the network of larger aggregators (often financed
directly by the EBRD) to strengthen the position of
SMEs in the global value chains.
Non-TC support
OFFICIAL USE
Producing sustainable agricultural products
in Morocco
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CLIENT AND PROJECTElephant Vert is a Morocco-based producer of innovative bio-fertilisers, bio-pesticides and bio-stimulants. The EBRD is supporting the company to boost research and development and to quadruple production capacity, marketing and distribution of these climate-friendly agricultural inputs.
FINANCING PLANEBRD loan € 24 million
Other financing sources € 27 million
FINTECC grant support € 0.4 million
A new bio-fertiliser production site benefits from partial grant support from EBRD’s Finance and Technology Transfer Centre for Climate Change programme. FINTECC aims to accelerate the uptake of advanced resources efficiency technologies in countries with low market penetration rates.
GREEN ECONOMY IMPACTBio-fertilisers are produced by recycling organic agricultural and municipal wastes. This reduces landfill volumes and contributes to a low-carbon circular economy.
• 2.5 tonnes of waste are recycled to produce 1 tonne of bio-fertiliser. The project will enable the recycling of 3% of Morocco’s annual municipal waste.
• Unlike chemical fertilisers which lead to loss in soil fertility and leaching, bio-fertilisers enhance soil fertility and reduce irrigation water use by 50%.
• Greenhouse gas emission reductions of over 150,000 tonnes of CO2 are estimated from avoided landfilling and the replacement of chemical fertilisers.
Photo credit: www.elephant-vert.com
OFFICIAL USE
Helping Moroccan food producer invest in
advanced efficient technologies
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CLIENT AND PROJECTA family-owned Moroccan SME producing confectionary products for local and export markets.
EBRD is providing support for the construction and operation of a new production site on the outskirts of Casablanca. The total investment value is of €15 million.
INVESTMENT PLANEBRD loan (in Moroccan Dinars) € 4.6 million
of which finance forsustainable energy measures € 2.2 million
Grant support for adopting advanced technologies € 0.3 million
Other commercial and own financing € 10.4 million
SUSTAINABLE ENERGY MEASURESAssessment funded by the EBRD Special Shareholders Fund evaluated feasibility of on-site PV generation and recommended additional energy efficiency measures (average payback of 6 years):
• Roof-mounted PV system
• Ice-based energy storage system to balance daily energy use and supply between cooling and cold storage needs
• Energy management system and ISO 50001
• Energy recovery from furnace chimney
• High-grade thermal insulation of building.
TECHNOLOGY TRANSFER SUPPORTThe project benefits from partial grant support from EBRD’s FINTECC programme which aims to accelerate the uptake of advanced resources efficiency technologies in countries with low market penetration levels and underdeveloped supply chains.
IMPACT OF PROJECT• Fuel savings of some 600 tonnes of oil and annual emission
reductions of 2,200 tonnes of CO2 (equivalent to the annual footprint from driving 500 average household cars in the UK).
• At the time of signing, the planned roof-mounted solar installation of 1.4 MW was the largest of its kind in Morocco.
OFFICIAL USE
Climate technology transfer
Increasing water efficiency in fruit plantations
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CLIENTTunisian branch of an international agribusiness specialised in producing fruits and vegetables for European and North African markets.
EBRD SUPPORTSupporting the establishment and operation of an 80ha agricultural plantation in Bizerte Governorate, focused on cultures of raspberries and other fruits.
Agricultural producers in North Africa face increasing water shortages and deteriorating water quality. Thus the investment includes advanced water harvesting and water recycling systems.
ADVANCED SOLUTIONSSome of the advanced water efficiency solutions supported with EBRD finance were:
• Rainwater drainage for collection
• UV & chlorine treatment for disinfection
• Nutrient control and computerised drip irrigation.
INVESTMENT PLANEBRD loan € 4 millionof which climate resilience finance € 1 million
PROJECT IMPACT• Rainwater harvesting reduces the company’s water
consumption by over 30%
• Reduced loss of soil fertilisers (P, Fe, K) through water recycling and introduction of hydroponic cultivation
• Wastewater treatment reduces the environmental impact caused by discharge of effluents.
OFFICIAL USE
THANK YOU
For more information:http://www.ebrd.com/what-we-do/get/knowledge-hub.html
OFFICIAL USE
Mainstreaming green financing
Results in 2006 – YTD 2017
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FINANCED
1,400projects and credit lines
1,000+ directly financed
projects with green
components, and
290 credit lines to locals
financial institutions for on-
lending to smaller projects
SIGNED
€24.7 billionof green financing
For projects with a total value
of €145 billion
In 2014-2016 green financing
represented 36% of EBRD’s
total business, up from only
15% in 2006.
REDUCED
97 million tonnes of CO2/year
Emission reductions more
than annual energy emissions
of Romania
+annual water savings of 200
mln m3 since 2013 equal to a
third of Londoners’ water use
OFFICIAL USE
Mainstreaming green financing
Green economy investments
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A green economy is a market economy where investments are made
taking account of their environmental impact and with particular
concern for the sustainable use of natural resources. Green economy
projects, or project components, can be from the following areas:
• Energy efficiency
• Renewable energy
• Water efficiency
• Resilience to climate change
• Waste minimisation and materials efficiency
• Pollution control and environmental compliance
OFFICIAL USE
The EBRD mandate and the green economy
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Credit and financial risks
Environmental and social risks
Integrity analysis
Civil society engagement
Market transition impact
Green Economy Transition impact
How projects
are assessed
at the EBRD:
OFFICIAL USE