Deep Dive Session
Climate Finance Readiness – From
Theory to Practice: Lessons learned
from the Field
LEDS Forum, 28 June 2016
Lars Andersen
Climate Finance Readiness Programme (CF Ready)
Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ)
07.07.2016
Lars Andersen
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Learning Objectives
I.
II.
III.
IV.
Getting to know the key features of the GCF
Learning about the concept of CFR
How are how BGD and VN tackling CFR issues?
Interactive excersise to learn about the state of
Readiness in your country
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Agenda
11: 00 – 11:10
11:10 – 11:30
11:30 – 12:00
12:00 – 12:20
12:25-13:00
13:00 – 14:00
14:00 – 16.00
16:00 – 16:30
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Welcome remarks and Introduction:
Lars Andersen, GIZ Climate Finance Readiness Adviser, Bonn,
Germany
The GCF: Key Facts, recent updates and info about GCFReadiness Programme, Dr. Binu Parthan, Technical Asia Advisor
(GCF)
Case 1: “Green Growth & Climate Finance in Vietnam
Dr. Pham Hoang Mai, Director General of the Department of
Science, Education, Natural Resources and Environment of MPI
Climate Finance Readiness - From Theory to Practice: Lessons
learned from the field
Lars Andersen, GIZ Climate Finance Readiness Adviser, Bonn,
Germany
Case 2: Case Study from Bangladesh
Morshed Reaj, GIZ Advisor Climate Finance and Policy, Dhaka,
Bangladesh
Lunch Break
Interactive Exercise on Climate Finance
Summary & Discussion / Q & A
Coffee/Tea Break
Lars Andersen (CF Ready)
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2 │ Recap: Why is the Green Climate Fund different?
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3 │ The crucial role of the NDA
GCF Board Decision B.04/05
The Board decided that the NDA or focal point will:
•
“Recommend to the Board funding proposals in the
context of national climate change strategies and
plans, including through consultation processes”
•
“Facilitate the communication of nominations of
entities to the Fund”
•
“Seek to ensure consistency of funding proposals
from national, subnational, regional and international
intermediaries and implementing entities with
national plans and strategies”
•
“Implement the no‐objection procedure”
•
“Act as the focal point for Fund communication”
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Source: GCF
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4 │ Climate Finance Readiness – Why?
Climate Finance Readiness activities build the base for efficient, effective and transparent
use of climate finance and leads to concrete adaptation and mitigation results.
Climate Finance Readiness relates to national and international climate finance from
public and private sources
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5 │ CF Ready – Our advisory services
Based on a country‘s needs:
1. Supporting national and regional climate finance
institutions (NDAs & NIEs)
2. Providing strategic and conceptual advice
(NAMAs, INDCs, NAPs)
3. Green Climate Fund knowledge exchange through
International information and regional exchange
4. Support in the project and pipeline development
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Lars Andersen (CF Ready)
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6 │ CF Ready - Countries
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7 │Programme‘s Achievements in 2015
Stronger coordination for climate finance
• In Bangladesh, Morocco, Tajikistan, Uganda, Vietnam and Zambia
CF Ready has initiated and successfully supported the NDA/Focal Point
designation process.
• In seven countries (Bangladesh, Morocco, Peru, Zambia, Uganda,
Tajikistan, Vietnam, and the Caribbean as region), CF Ready supports
the NDA in becoming functional and enabling them to better coordinate
and guide climate finance flows, e.g. with the development of a noobjection procedure.
Better access to climate finance
• In Morocco, CF Ready supported successfully the accreditation of ADA.
• In Peru, lessons learned were compliled on PROFONANPE‘s experience
in becoming accredited - to inform other institutions in the accreditation
process
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8 │Programme‘s Achievements in 2015
• Strengthening the financing component of strategies and plans
• In Cambodia, Morocco, South Africa and in Tanzania the
programme is supporting the NAP process - in particular the NAP
component on financing.
• In Uganda an initial GCF Country Programme has been developed
with CF Ready‘s support – outlining key priorities for the GCF
• In Tajikistan, CF Ready has supported a chapter on financing
aspects in the country´s National Adaptation Strategy.
• In Vietnam, the programme has provided input on Green Growth for
the Socio-Economic Development Plan (SEDP 2016-2020).
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9 │ Tools & Cooperation
• Climate Finance Readiness Training (CliFiT): is becoming the standard
training for Climate Finance Readiness – widely used also by other donors
• Environmental and Social Safeguards (ESS) Training – developed in
cooperation with WRI: Supports potential Accredited Entities to fulfill GCF‘s
ESS standards
• GCF Accreditation Self Assessment Tool – developed in cooperation
with the GCF Secretariat and WRI: Gives guidance on the requirements for
accreditation to the GCF – used more than 350 times
• Engaging the private sector in GCF activities: What is the role of the
National Designated Authorities? Case Studies Bangladesh and Morocco
(ECN)
• Close cooperation with the GCF Secretariat´s Readiness Programme and
active participation in the GCF Readiness Coordination Mechanism
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10 │What is coming up: Outreach Plans 2016
• Regional Workshop on Climate Finance Readiness in South East
Asia - jointly organised with WRI
• Joint side event with the UNEP/UNDP/WRI Readiness Programme in
Morocco
• Publication on „Experiences with development of climate finance
strategies“ for COP 22 (link to NDC implementation)
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11 │Hot Topics in 2016 and Beyond
• Supporting NDC Implementation:
• Developing financing strategy to implement transformational
programmes, including introduction of incentives and regulations for
NDC implementation
• Linking the NDC, the GCF Country Programme, the NAP process
etc. to create a coherent climate architecture
• Support of projects or programmes outlined in the INDC: turning
them into bankable project proposals and moving to implementation
 CF Ready work on financing components of climate change
strategies and plans has a close link to NDC implementation (e.g. in
Peru, Cambodia, Morocco)
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12 │ Lessons Learned
1. Readiness needs to build on what is already there – and this is often a
lot
2. Activities must be tailored to partners’ specific needs
3. A continuous in-country presence maximises the impact of readiness
work
4. Building on sustainable local expertise and fostering south-south
exchange
5. A coherent institutional framework provides the
basis for GCF to have a transformational impact
6. Providing digestible, easy to understand info
about GCF
7. Project Development & Priorization Capacities
need to be strengthened
Photo: © GIZ
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Lars Andersen (CF Ready)
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Let‘s get ready!
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Interactive Excersise
Promoting
private sector
engagement
Strengthening
institutions
+ good financial
governance
Strategic
planning and
developing
policies
Effective and
transparent
spending and
implementation
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Accessing
international
climate finance
Lars Andersen (CF Ready)
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The Ruhr-Area in the 1960s (Industrial Heart of GER)
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Case Study German Energy Transition (Energiewende)
Share of RE as part of electricity Demand
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Let‘s get ready!
Thank you for your attention!
07.07.2016
Lars Andersen (CF Ready)
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The 100 bn. Dollar question - Mission Impossible?
“Developed country Parties to the United Nations Framework
Convention on Climate Change (UNFCCC) committed to a goal “of
mobilising jointly USD 100 billion per year by 2020 to address
the needs of developing countries… from a wide variety of
sources, public and private, bilateral and multilateral, including
alternative sources”.
(UNFCCC, 2010)
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Where do we stand & is it enough?
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But other flows also continue…
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Who is investing & Where?
GLOBAL NEW INVESTMENT IN RENEWABLE ENERGY BY
ASSET CLASS, 2004-2014, $BN
07.07.2016
GLOBAL NEW INVESTMENT IN RENEWABLE ENERGY:
DEVELOPED V DEVELOPING COUNTRIES, 2004-2014,
$BN
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Why private Investments? In a nutshell
100 bn. Copenhagen Commitment
Estimates from experts for financing needs in Developing Countries
exceed CPH commitments by far
Majority of investments in low-carbon technologies is coming from
the private sector
Public Budgets are scarce (Financial & Economic Crisis, other
Budget prioities such as Health, Education, SDGs etc.)
$102 trillion Assets under Mgt in 2020 waiting to be channeled to
climate change activites
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Private sector perspective: Why should the the private sector
engage?
Opportunities vs. risks from a private sector perspective
Renewable
energies
Opportunities
Energy
efficiency
Adaptation
(Transport
sector)
Good financial return on investment (short, medium, long term)
Technological leadership
New successful cooperation public-private cooperation models
Market share increase
Improved image
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Conditions for attracting private investment
Policy and institutional conditions
Plans and targets for low-carbon
development
• Legally binding
• With inclusive participatory process
• Providing investors with certainty and
low term vision
Institutional organization and capacity to
implement policies effectively
• Strong technical, managerial and
administrative capacities
• Engaging civil society and expert
community
• Based on GFG principles
Regulatory instruments
Economic instruments
Establishing a rule and / or objective that
must be fulfilled by the polluters who would
face a penalty in case of non-compliance
with the norm, e.g efficiency standards,
building codes, vehicle efficiency
standards, biofuel standards
Incentivizing policies to increase
attractiveness of green investment options
as compared to conventional technologies
/ projects , e.g. taxes, (removal of)
subsidies, low-cost debt, emissions trading
etc.
Source: WRI, 2013. Mobilizing Climate Investment The Role of International Climate Finance in Creating
Readiness for Scaled-up Low-carbon Energy.
IPCC 2007 and 2014
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Example – Renewable energy: Germany
Public support mechanisms: Reliable & long-term policy
framework
In 2000 the EEG (German RE Law) introduced a feed-in-tariff (FiT):
 Priority access regarding grid connection
 Electricity feed-in priority
 Purchase obligation of electricity produced
 Liberalized energy market with wide variety of IPPs
 Provisions of a constant tariff for each kWh of electricity produced for a
period of 20 years
 Advantage: Stepwise decrease and the goal of final phase-out of FiT acts
as an incentive for RE-industry to become competitive within a given
period of time
 Tariff differentiated by plant size and technology
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Case Study German Energy Transition (Energiewende)
Share of RE as part of electricity Demand
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The Ruhr-Area in the 1960s (Industrial Heart of GER)
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Other Case Studies
• Bangladesh (SHS/IDCOL)
• South Africa, India, Peru (very successful RE Tender/Bidding Schemes)
• Morrocco (Biggest CSP in the world)
• Uganda (innovative Business Models with mobile phone masts)
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Lessons Learned from int. experience
1. There is no one-fits-all solution
2. Long-term reliable and stable policy frameworks are key
3. Carefully analyse risks and barriers
4. Select suitable instruments adressing the specific risks/barriers
5. Evaluate & Learn from your own experiences - Success Factors to be
replicated?
6. Exchange of needs and expectations: regular informal & formal dialogue
between SMEs, business, the financial sector and the public sector
7. Financial incentives alone are not sufficient: readiness activities, incl.
awareness and communication campaigns, interest rate incentives and
capacity-building activities to familiarize banks with technology
8. Be innovative! First-mover advantage! Create Business Models! Find a
niche!
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Let‘s get ready!
Thank you for your attention!
07.07.2016
Lars Andersen (CF Ready)
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Impressum
As a federally owned enterprise, GIZ supports the German Government
in achieving its objectives in the field of international cooperation for
sustainable development.
Responsible
Lars Andersen
[email protected]
Published by
Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH
Registered offices, Bonn and Eschborn, Germany
Climate Finance Readiness Programme
Friedrich Ebert Alle 40
53111 Bonn
T +49 228 24934 – 133
F +49 228 24934 – 215
E [email protected]
I https://www.giz.de/expertise/html/11492.html
07.07.2016
Lars Andersen (CF Ready)
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