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Global Landscapes Forum
Mobilising Finance for Integrated Landscape Initiatives:
Three Scalable Financial Instruments
Pari...
EIB at a glance
 2014 Highlights :
 EIB loan/investment signatures: EUR 77.0bn; EIF signatures : EUR 3.3bn
 EIB Loan/In...
EIB Climate Action Signed Operations
2008 2009 2010 2011 2012 2013 2014
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,...
.Sustainable agriculture, livestock,
aquaculture
Management of Ecosystem
Services: Fire Prevention,
Erosion Control, Air C...
EIB Financing Instruments
 The EIB has, to its disposal, an extensive range of instruments to finance
public and private ...
Climate Finance Products (1)
 “Pari passu” investments in Infrastructure Funds:
 EIB focuses on funds privileging “green...
Climate Finance Products (2)
 Funds of funds:
 Global Energy Efficiency and Renewable Energy Fund (GEEREF):
EUR 112m se...
Climate Finance Products (3)
 EU-EIB Joint Facility Initiatives with EC LIFE budget:
 Private Finance for Energy Efficie...
The Natural Capital Financing Facility (NCFF)
DIRECT INVESTMENTS IN
PROJECTS
INTERMEDIATED INVESTMENTS:
Private Equity Fun...
Climate Finance Products (4)
 EIB investing in bonds or guaranteeing bond/securitisation structures:
 Project Bond Initi...
Climate Finance Products (5)
 EIB investing in mini-bonds structure (for water infrastructure in Veneto-
Italy):
 No acc...
Green Bond Issuance
Outstanding environmental bonds
issued by MDBs (size > USD 100m)^
^Source: market data collected by Cr...
Thank you for your attention!
For further details or information kindly contact:
 Christopher KNOWLES c.knowles@eib.org
...
Disclaimer
This presentation has been prepared by the European Investment Bank (the “Bank” or “EIB”) for information purpo...
Mobilising finance for integrated landscape initiatives three scalable financial instruments
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Mobilising finance for integrated landscape initiatives three scalable financial instruments

Presentation by James Ranaivoson at the Global Landscapes Forum 2015, in Paris, France alongside COP21. For more information go to: www.landscapes.org.

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Mobilising finance for integrated landscape initiatives three scalable financial instruments

  1. 1. Global Landscapes Forum Mobilising Finance for Integrated Landscape Initiatives: Three Scalable Financial Instruments Paris, 6 December 2015 James RANAIVOSON 06/12/2
  2. 2. EIB at a glance  2014 Highlights :  EIB loan/investment signatures: EUR 77.0bn; EIF signatures : EUR 3.3bn  EIB Loan/Investment volume: (i) Innovation & Skills: EUR 14.7bn; (ii) Smaller Enterprises: EUR 25.5bn; (iii) Strategic Infrastructure: EUR 20.6bn; (iv) Climate Action: EUR 19.1bn; (v) Outside EU: EUR 7.9bn ( overlap in these figures)  Borrowing volume in international capital markets: EUR 61.6bn including Green Bonds issuance (Climate Awareness Bond-CAB programme): EUR 4.3bn  Own funds: EUR 60.6bn; Basel III capital adequacy ratio of 23.7% The European Investment Bank (EIB) is the European Union’s bank. Owned by the 28 EU Member States, the EIB provides finance and expertise for sound and sustainable investment projects in over 160 countries. It is the world’s largest multilateral borrower and lender by volume. 06/12/2  2015?  Lending target: EUR 71bn +/-10%  Borrowing programme: EUR 60bn with authorisation up to EUR 65bn  Balance-sheet of EUR 574bn mid-2015  However, implementing agent of the European Fund for Strategic Investments (EFSI)-Juncker Plan: mobilise EUR 315bn for 2015-2017 in order to address the EU’s low economic growth and challenges in terms of competitiveness and high unemployment, with EUR 49bn from EIB and EUR 12bn from EIF.
  3. 3. EIB Climate Action Signed Operations 2008 2009 2010 2011 2012 2013 2014 0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 18,000 20,000 22,000 Adaptation Other & miscellaneous** Transport RD & I Energy efficiency Renewable Energy EUR m 2008 2009 2010 2011 2012 2013 2014 Total* 9,771 16,691 20,513 18,496 13,284 18,982 19,125 *2008-2011 EIB + other funds - from 2012 only EIB resources **including Afforestation, Forest Management, Waste and Wastewater Climate action is a key priority for the EIB with a minimum 25% of total lending dedicated for per year. Not taken in account in these figures: EIB lends roughly EUR 1 bn p.a. for sustainable agriculture projects and EUR 4 bn p.a. for water projects 06/12/2
  4. 4. .Sustainable agriculture, livestock, aquaculture Management of Ecosystem Services: Fire Prevention, Erosion Control, Air Control, Noise Regulation, Endangered Species, Pollination, Water Purification, Soil nutrients etc. .Sustainable Forest Plantation .Afforestation/Reforestation .Agroforestry, farming conservation with nature-based actions .Pro-Biodiversity Businesses inc. “Green” Production, Ecotourism, Research .Forest Conservation, .Restoration of Natural Assets on Private or Public Lands Public goodsPrivate assets Land use asset classes Nature of outputs Available Financing InstrumentsDirect Equity/”Pari passu” Equity Funds .Senior or Mezz Loans .Equity/VC or Seed Funds .Secured Loans .Layered Equity/Debt Funds .Loans to Public Sector .Interest Rate Blending .Grants An EIB Perspective for Landscape Initiative / Land Use Projects <------------------------------------------------------------- Green Bonds? ---------------------------------------------------------> .”Pari passu” or Layered Equity/Debt Funds with or without activation of revenues (carbon, PES, offsets…) European Investment Bank .Green Infrastructure Investors or “providers” of finance Governments Private funds, Institutional & Impact Investors, Banks, VC Funds, Industrial Investors, Donors-Philanthropists < ---------------------------------------- EIB & other DFIs, Some Impact Investors -------------------------------- > 5 06/12/2
  5. 5. EIB Financing Instruments  The EIB has, to its disposal, an extensive range of instruments to finance public and private sectors at investment and sub-investment grades of risk EIB lending instrument for Investment Grade operations Special Activities for low and sub investment Grade operations Financing projects with corporate loans Project Project finance with direct project risk First-loss features allowing EIB to undertaking higher (equity or debt) risk Equity through Funds Intermediated Loans Banks Public Sector Financing European Investment Bank Group 6 06/12/2
  6. 6. Climate Finance Products (1)  “Pari passu” investments in Infrastructure Funds:  EIB focuses on funds privileging “greenfield” assets instead of “operating” assets  EOY 2014: 34 investments (29 inside EU, 5 outside) – EOY 2015? > 40  Sectors: renewable energy, energy efficiency, PPP transport & communication and social infrastructure, forestry (plantation, conservation), land decontamination and regeneration, pro-biodiversity businesses  EUR 1.1bn of EIB commitment participations for funds targeting EUR 11.3bn aggregate commitments from all investors  (Co-investment) catalytic effect = 6x ; (Project costs) multiplier effect = 20x  EIB is/will be invested in:  Dasos Timberland funds, Eco-Enterprises II, Althelia, Ginkgo funds, Brownfields Regeneration, African Sustainable Fund, Arbaro  Althelia: activation of revenues with REDD+ carbon credits + partial guarantee from USAID to offset the forest carbon price risk
  7. 7. Climate Finance Products (2)  Funds of funds:  Global Energy Efficiency and Renewable Energy Fund (GEEREF): EUR 112m seed funding from EU, Germany and Norway in 2008 that assume a first-loss layer… …allowing to leverage some EUR 110m from private investors; up to date invested in a total of 20+ funds investing in small projects in Africa, Caribbean and Pacific, Latin America and non-EU Eastern Europe.  Layered-risk funds:  Green for Growth Fund (GGF)  European Energy Efficiency Fund (EEEF)  Global Climate Partnership Fund (GCPF)  eco.business Fund?
  8. 8. Climate Finance Products (3)  EU-EIB Joint Facility Initiatives with EC LIFE budget:  Private Finance for Energy Efficiency investments (PF4EE):  PF4EE – one segment of the EIB’s wider “DEEP Green” initiative for energy efficiency  credit risk protection by EU budget (EUR 80m leveraging project costs of EUR 500m);  Natural Capital Financing Facility (NCFF) :  EU-28 pipeline of projects, testing financing options (direct loans, intermediated loans, investments through private equity funds) for projects in:  nature-based climate adaptation  green infrastructure  payment for ecosystem services  biodiversity offsets / compensation  pro-biodiversity businesses
  9. 9. The Natural Capital Financing Facility (NCFF) DIRECT INVESTMENTS IN PROJECTS INTERMEDIATED INVESTMENTS: Private Equity Funds, Credit Lines to Banks FINANCIAL INSTRUMENTS EUR 100-125m  EUR 50m First Loss for EIB TECHNICAL ASSISTANCE EUR 10m NATURAL CAPITAL FINANCING FACILITY LIFE Environment / Climate Project level Co-investors private and/or public Investments EIB 06/12/2
  10. 10. Climate Finance Products (4)  EIB investing in bonds or guaranteeing bond/securitisation structures:  Project Bond Initiative (PBI) providing partial credit enhancement to large EU-28 infrastructure projects – transport, energy so far - in order to attract capital market investors, with EIB investing in subordinated tranches or enhance the credit quality of senior or subordinated tranches Project Bonds PBCE up to 20% of total Project Bond issue Infrastructure Project Company (eg. PPP/PFI) Equity Project Bond Investors PBCE
  11. 11. Climate Finance Products (5)  EIB investing in mini-bonds structure (for water infrastructure in Veneto- Italy):  No access to capital markets  Difficult to access bank financing for long maturities  No access to EIB direct lending given the small size and low rating  Complements EIB’s product portfolio by adding a new instrument to finance small and medium size utilities  Can be replicated for other regions, different countries or other sectors (e.g. waste)  Catalytic effect: interesting product for institutional investors HYDRO SPV 130/99 Issuer 1 Issuer 2 ………. Issuer 9 Issuance of Bonds Subscription price Remuneration and repayment of Bonds Issuance of Notes Subscription price Interest and principal on the Notes Liquidity and credit support on the Notes EIB + Investors Cash reserve (20%)Veneto Sviluppo Liquidity and credit support on the Notes
  12. 12. Green Bond Issuance Outstanding environmental bonds issued by MDBs (size > USD 100m)^ ^Source: market data collected by Credit Agricole CIB; as of 27 April 2015 ADB 4% AFDB 4% EBRD 1% EIB 45% IBRD 26% IFC 15% NIB 5%  The Climate Awareness Bond (CAB) Programme so far allocates its proceeds to fund Renewable Energy and Energy Efficiency projects.  CAB issuance to date: > EUR 10bn equivalent in 11 currencies  EUR CAB due 11/2019 : largest green bond in the market at EUR 3bn EIB CAB issuance by currency* EUR; 54% GBP; 14% SEK; 11% USD; 9% ZAR; 3% CHF; 3% AUD; 2% BRL; 2% TRY; 1%JPY; 0% *As of 23 April 2015 European Investment Bank Group 06/12/2
  13. 13. Thank you for your attention! For further details or information kindly contact:  Christopher KNOWLES c.knowles@eib.org  Cyrille ARNOULD (GEEREF) c.arnould@eib.org  Enrico CANU (Funds/Mini-bonds Structure) e.canu@eib.org  Manuel DUENAS (PF4EE) m.duenas@eib.org  Katarina MALMNAS (NCFF) k.malmnaes@eib.org  Cormac MURPHY (PBI) c.murphy@eib.org  James RANAIVOSON (Funds/NCFF/Bonds)j.ranaivoson@eib.org  Peter MUNRO (CAB) p.munro@eib.org  General queries on EIB issuance investor.relations@eib.org
  14. 14. Disclaimer This presentation has been prepared by the European Investment Bank (the “Bank” or “EIB”) for information purposes only and should not be taken as investment advice. Certain sections of this presentation contain forward-looking statements that are based on expectations, estimates, projections and assumptions. These statements are not guarantees of future performance and involve certain risks and uncertainties, which are difficult to predict. Therefore, actual future results and trends may differ materially from what is forecast in such forward-looking statements. The Bank does not undertake any obligation to update or publicly release any revisions to this presentation to reflect events, circumstances or changes in expectations after the date of this presentation. The Bank specifically does not make any representation, warranty or assurance of any kind, expressed or implied, or assumes any liability regarding the accuracy, completeness and up-to-dateness of any of the information contained in this presentation. The Bank accepts no responsibility for any consequences of the use of the information provided in this presentation. This presentation constitutes neither an offer to sell nor an invitation to purchase securities, nor is it intended to serve as a basis for any kind of obligation, contractual or otherwise. Securities of the Bank may not be offered or sold in the United States nor to U.S. persons outside the United States unless the offering or sale is registered under US securities laws. Similar restrictions may apply in other countries.

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