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  • Good afternoon. I am Patrick D’Addario, President of the Fiorello LaGuardia Foundation. I would like to thank the Chinese State Forestry Agency for having invited me to participate in this important meeting. But most of all, I would like to take this opportunity to publicly thank the Blue Moon Fund for its support of the Preparation Facility for Sustainable Small-Scale Infrastructures.
  • Given the subject of this meeting, I thought it would be appropriate to begin by proclaiming Fiorello LaGuardia “World Champion in squeezing money from a national government”, money which he used to make New York the first modern American city. The list that you see here does not include the more than 40 parks and green spaces, miles of parkways, and many public housing projects built during his time in office. Nor does it mention his less visible achievements such as the reorganization of the City Government and professionalization of the Civil Service. Somehow LaGuardia still found time to develop strong views about the role of Latin America in the modern world. In a major policy speech, in 1940, he called for the United States “to secure the economic welfare of the Central and South American Commonwealths.” And to show he was serious, he instituted the Fiorello LaGuardia Latin American Scholarship program, bringing dozens of deserving young people to the United States for technical training.
  • LaGuardia’s enlightened views were the result of his personal history. Himself the son of Italian Immigrants, he began his career in 1901, serving as a US consular officer in Budapest, Trieste and Fiume. After his return to the US in 1906, he worked for several years as a translator at Ellis Island, the entry point for poor immigrants to the United States. After receiving his law degree, he defended the rights of many of those same immigrants. These experiences formed the basis for his life-long concern for those who risked everything to build a new life in a new country. Many of those new citizens became his constituents when he was first elected to the US Congress in 1916.
  • In the first of his six terms as US Congressman, the US entered World War I. Not willing to be left behind, LaGuardia took a leave of absence to command an air force squadron in Italy, where he flew many bombing missions and became an important link between the Italian and US governments. To my knowledge, no current American political leader has left the comfort of Washington to risk his life for the principles he believes in .
  • Without a doubt, LaGuardia’s most important international contribution was as Director General of the United Nations Relief and Rehabilitation Agency. Appointed by President Truman in 1946, he personally visited Italy, Austria, Greece, Yugoslavia, Czechoslovakia, Germany, Russia, Morocco, and Egypt, evaluating at first hand the humanitarian disaster created by the war. He worked tirelessly to assure that a new generation would not be lost for want of food and shelter. Notwithstanding his focus on post-war Europe, LaGuardia had not forgotten about Latin America. In an article he wrote in 1947, he said, “The good old days of dollar diplomacy and banana republics and exploitation by American capital in South American countries are over, and the quicker the big boys with money learn this, the better it will be for themselves, as well as for the country.”
  • LaGuardia’s vision of “One World,” in which we are all citizens, served as the inspiration for the Fiorello LaGuardia Foundation. Thus, we sought to engage Italian Americans and the citizens of an economically dynamic Italy to work in partnership to extend a helping hand to a new generation beset by economic, environmental, and social problems. LaGuardia made certain that the second world helped the first world to survive the war. Together, we will help the third world to survive the peace.
  • Human Local Knowledge and Continuity Lower Cost Financial Mainstream Finance, no distortion of local market, no boutique Replicability Local Organizations with Multiplier Capability
  • How exactly does prep-assist function? BY offering products and services to specific sets of promoters, entrepreneurs and community groups executing like bundles of transactions in subject geographic areas and market areas with a critical mass of transactions likely to be of interest to partner FIs They lower their processing costs and proceed up the learning curve in assessment of subject ventures. Technology/area
  • First, by providing assistance in the design, development, and seed capital financing of bankable small infrastructure transactions. Under its incubation program, PREP-ASSIST assists the promoter to tell the story of his firm and project in the business plan format required by financiers, detailing its technical (fuel, technology), legal (permits and contracting), financial (revenues, capital, and operating costs), organizational characteristics. Depending on the situation, PREP-ASSIST may provide direct, low-interest financing to share the cost with the promoter of the preparation of his project for financing. These funds may be used to engage expert legal, technical, or commercial assistance required to prepare a proposal acceptable to a pre-identified source of finance.
  • : (i.) partial parity guarantees, (ii.) subordinated recovery guarantees, and (iii.) loss reserves. The information presented in the business plan is specifically aimed at allowing sources of finance to better understand and evaluate project risk. In addition, we offer guarantees throughout the proving period of a project usually, less than 18 months. In the first PREP-ASSIST facility, the HFF, these are partial parity guarantees (pro-rata). If the risk profile dictates, subordinated recovery guarantees may also be used. (all FI expenses paid before PREP-ASSIST). Another PREP-ASSIST tool is the Loan Loss Reserve, under which the FI can draw against the full amount of a 5-20% reserve to recover losses on the bundle of transactions. Typically projects are bundled, I.e. a set of products and services are offered to specific sets of promoters, entrepreneurs and community groups executing like bundles of transactions in subject geographic areas and market areas with a critical mass of transactions likely to be of interest to partner FIs They lower their processing costs and proceed up the learning curve in assessment of subject ventures.
  • Third, by operating the Small Carbon Sellers Facility, to provide technical assistance in dealing with the complex norms and procedures in designing a plan to secure carbon emission reduction revenue from each project: These include establishment of baselines, structuring transactions, international registration of projects, and established monitoring and evaluation of such ventures. In addition, PREP-ASSIST can offer counter-party risk, guaranteeing the VER yields from micro-scale projects. These guarantees are supported by options purchases or by posting funds in a margin account. By aggregating price and volumetric risk from many micro-scale producers, PREP-ASSIST makes it possible for international buyers can confidently purchase the emissions from such producers in bulk
  • Solar Water-Pumping/Desalinization - Training & Technical Assistance High-Value “Brandable” Product - Training & Technical Assistance Development/Assistance Local Financial Capacity ‘Smart’ Subsidy if Necessary Market Links First, by providing assistance in the design, development, and seed capital financing of bankable small infrastructure transactions. Under its incubation program, PREP-ASSIST assists the promoter to tell the story of his firm and project in the business plan format required by financiers, detailing its technical (fuel, technology), legal (permits and contracting), financial (revenues, capital, and operating costs), organizational characteristics. Depending on the situation, PREP-ASSIST may provide direct, low-interest financing to share the cost with the promoter of the preparation of his project for financing. These funds may be used to engage expert legal, technical, or commercial assistance required to prepare a proposal acceptable to a pre-identified source of finance.

Transcript

  • 1. MOSAICO Engaging Local Financial Institutions in Project Development and Implementation Patrick J. D’Addario President Fiorello H. LaGuardia Foundation presented at the UNFCCC workshop on Innovative Options for Financing the Development and Transfer of Technologies Montreal September 28, 2004
  • 2. Fiorello H. LaGuardia 99th Mayor of the City of New York 1934-1945
    • Defined the Infrastructure of the City of New York
      • Holland Tunnel
      • Lincoln Tunnel
      • East and West Side Highways
      • Queens-Midtown Tunnel
      • Triborough Bridge
      • Brooklyn-Battery Tunnel
      • LaGuardia and Kennedy (acquired land) Airports
      • Unified Subway System
    MOSAICO
  • 3. LAGUARDIA, SECRETARY TO THE U.S. CONSUL GENERAL BUDAPEST, HUNGARY, 1903 MOSAICO
  • 4. LAGUARDIA, COMRADES, AND “CONGRESSIONAL SPECIAL” FOGGIA, ITALY, 1918 MOSAICO
  • 5. DIRECTOR-GENERAL UNITED NATIONS RELIEF AND REHABILITATION AGENCY (UNRRA), 1946 MOSAICO
  • 6. THE FIORELLO H. LAGUARDIA FOUNDATION, FOUNDED 2001 MOSAICO
  • 7. OAS Brazil India Blue Moon Comune di Milano China REEEP Him. Fin. Fac. Equity Fund Multilateral BRT Brazilian Equity Fund Volkhart Fndt Sainsbury FCT Banca Etica Regione Toscana/Arte Continua Fondazione Cariplo UN Foundation Fondazione BMdPdS Funding History ( IREED RABO/BTS BELVOIR) PREP-ASSIST MOSAICO
  • 8. Goal of MOSAICO Catalyze Human, Institutional, and Financial Resources in Support of the Development of Locally Defined and Managed Enterprises Utilizing Sustainable Approaches and Infrastructures on a Significant Scale MOSAICO
  • 9. MOSAICO Characteristics Local Resources - natural, human, institutional, and financial Leverage - Soft money used to facilitate entry of conventional private finance Replicability - demand side - bundling, multiplier groups supply side - financial, technical training Integration - financial and commercial chains Sustainability - environmental, social, and financial at project, program, and initiative levels MOSAICO
  • 10. MOSAICO Network The Initiative is executed by a network with five nodes: The Global Environmental Institute - Beijing, China Environment, Energy, and Enterprise Ventures PLC - Delhi, India Instituto Eco-Engenho - Macei ó, Brazil supported by Energy and Security Group, Inc. - Washington, DC Fiorello H. LaGuardia Foundation - New York, New York Ecosoluzioni, Snc – Cortona, Italy MOSAICO
  • 11. MOSAICO Approach Basket I (PREP-ASSIST) - community-based, rural, integrated agricultural projects Basket II - financing facilities for RE, EE, Organic agriculture projects 500kw- 15MW Basket III - strategic cooperation with financing programs of multilateral, bilateral or national institutions (often with Baskets I & II) MOSAICO
  • 12. BASKET I (PREP-ASSIST) Overview
    • Goal: Increase access to financing for small-scale sustainable infrastructures supporting local economic activity
    • Objectives: Offer a network of financial intermediaries based in Brazil, Central America, China, and India that provide the following set of services :
      • Project Preparation Assistance
      • Risk Mitigation for Financial Institutions
      • Small Carbon Sellers Facility
      • The network’s operations are supported by a set of technical experts that
      • provide financial advisory services to local intermediaries and their interface
      • with international markets for risk mitigation and environmental commodities.
    MOSAICO
  • 13. Approach: Basket I
    • Element One: Project Preparation Assistance Services
          • Incubation Services
          • Preinvestment Funding For Projects
          • Credit Enhancements
    MOSAICO
  • 14. Approach: Basket I (cont’d)
    • Element Two: Mitigate Financial Institution Risk
            • Short-term guarantees
            • Subordinated Loss Reserves
            • Project Bundling
    MOSAICO
  • 15. Approach: Basket I (cont’d)
    • Element Three: Greenhouse Gas (VER) Revenue Structures to Improve Returns
            • Simplified Approach
            • Develop Baseline
            • Bundle and Register VERs
            • Market VERs
    MOSAICO
  • 16. NORDESTE Alagoas Bahia Ceará Paraiba Rio Grande Do Norte Maranhão Sergipe Pernambuco Piauí MOSAICO
  • 17. Brazil Program - Participants
    • BASKET I - solar water pumping for high value agricultural products in the nordeste
      • Banco do Nordeste
      • Cooperatives
      • Municipalities
      • CEMINA
      • REDH
    • BASKET II - Equity and Guarantee Facility for small hydro and biomass generation in unconnected Amazon grid, energy efficiency
      • Tetrahedron
      • Eletrobras (?)
      • Institutional Investors
      • Bilateral Investment Funds
    MOSAICO
  • 18. Drip Irrigation - Alagoas MOSAICO
  • 19. • Yunnan Province • Guangxi Zhuang Autonomous Region MOSAICO
  • 20. China Program - Participants Basket I Provincial Poverty Alleviation and Development Office Rural Credit Cooperative Agricultural Bank of China Cooperatives Producer Associations Basket II Tsinghua Venture Capital Asian Development Bank (?) MOSAICO
  • 21. Investment Structure Venture Phase One Ordinary Shares Incubation & TA Services Equity Capital 20% or higher RFP Team Farmer Farmer Farmer Equity Capital 10% or lower RFP Seed Capital Fund Preferred Shares Ordinary Shares Service #1 Service #2 MOSAICO
  • 22. Investment Structure RCC/ABC Loan 80% or lower RFP Guarantee Facility Guarantee (Loan principal only w/asset trigger) Venture Phase Two Preferred Shares Ordinary Shares Service #3 MOSAICO
  • 23. Investment Structure RCC/ABC Loan 80% or lower RFP Guarantee Facility Guarantee (Loan principal only w/asset trigger) Venture Phase Three Farmer RFP Team Preferred Shares Ordinary Shares Ordinary Dividends (return on advisory services) RFP Seed Capital Fund Preferred Dividends (return seed capital) Ordinary Dividends (ROI) MOSAICO
  • 24. The States of • West Bengal • Uttaranchal • Sikkim MOSAICO
  • 25. Withering Organic Tea – Darjeeling MOSAICO
  • 26. India Program- Participants
    • West Bengal - hydropower for organic tea
            • Darjeeling Tea Planters Association
            • Hydro Project Developers
            • Local Financial Institutions
    • Uttaranchal - solar lanterns for productive uses
            • Central Himalayan Rural Action Group (Chirag)
            • Self Help Groups (SHGs)
            • Other Cooperatives
            • Tata/British Petroleum Solar, Inc
    • Sikkim - hydropower for organic cardamom
            • Tribal Groups
            • Infrastructure Development Finance Company
            • Rabo India Finance
    MOSAICO
  • 27. MOSAICO VALUE-ADDED CHAIN Darjeeling Organic Tea Farm HARROD’S TEA ₤ BANK TECHNICAL ASSISTANCE DEVELOPER TECHNICAL ASSISTANCE GUARANTEE $ VER s ₤ PREP-ASSIST (Himalayan Finance Facility) MOSAICO