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Session 11 Preety Bhandhari


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3rd Annual OECD Green Investment Financing Forum

Published in: Environment
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Session 11 Preety Bhandhari

  1. 1. Private Sector Engagement on Climate Change: The ADB Experience Preety Bhandari Director Climate Change and Disaster Risk Management Division
  2. 2. ADB’s Climate Finance Target
  3. 3. ADB Climate Finance
  4. 4. ADB Approaches to Climate Finance Mobilization Internally-managed funds • Clean Energy Financing Partnership Facility (CEFPF) • Climate Change Fund (CCF) • Others with bilaterals Externally-managed funds • Climate Investment Funds (CIFs) • Global Environment Facility (GEF) • Green Climate Fund (GCF) • Carbon finance  Asia Pacific Carbon Fund (closed in 2014)  Future Carbon Fund • Carbon Market Technical Support Facility  CDM support  domestic emissions trading • Supporting other market mechanisms Japan Fund for the Joint Crediting Mechanism  Renewable energy credits; feed in tariffs • Green and climate bonds • Direct project finance (lending, guarantees, syndications), and equity investment • Public private partnerships: (PPPs) working with client DMCs across stages of PPPs • New modalities (climate bonds) Deploying concessional resources Maximizing market mechanisms Catalyzing private capital
  5. 5. Initiatives to mobilize private sector • ADB-Canada Climate Fund for the Private Sector in Asia ($81.5 million) – ADB’s first concessional debt cofinancing facility to support private sector operations to combat climate change • Asia Climate Partners – A climate PPP Fund to support equity investments • Accessing Climate Investment Funds Dedicated Private Sector Program • IPEx Cleantech Asia – first low carbon technology exchange and IP transfer platform (marketplace) • $1.81 billion raised for green bonds (as on date) • Proposed Asia Climate Finance Facility (ACliFF)
  6. 6. Asia Climate Partners
  7. 7. Asia Climate Finance Facility (ACliFF) • To be established with an initial capitalization of at least $100 million, with a contribution of up to $30 million from German Federal Ministry for Economic Cooperation and Development (BMZ) (pending parliamentary approval) • Objectives: – Assist developing countries in accessing climate finance and overcoming barriers to scaling-up investment through new and innovative cofinancing measures, incl. guarantees and climate risk insurance – Provide technical assistance and origination, structuring, and de- risking of climate-positive investment projects; and catalyze funding from a broad range of sources, including the private sector • Fully established and operational by 2017
  8. 8. • $ 225 mn equivalent local currency bond, with ADB providing credit enhancement in the form of a guarantee of 75% of principal and interest on the bond, and a term loan of $ 37.7 mn • First climate bond in Asia Pacific for a single project in an emerging market; certified by CBI • First local currency bond in power sector & the first credit enhanced project bond in Philippines8 Project Sample: Innovation on Climate Financing Climate Bond: Tiwi Makaling-Banhaw ( MakBan) geothermal power plant complexes in the Philippines
  9. 9. Enhancing Energy Sector Innovations: New business model Simpa Networks (“Off Grid Pay-As-You-Go Solar Project”) in India • ADB Investment: $2 million equity investment in 2013, $5 million CTF loan in 2015 • Investee: Simpa Networks, a venture-backed technology company with a bold mission: to make modern energy simple, affordable, and accessible for everyone. • Strategy: Simpa offers an unique pay-as-you-go metering solution for off-grid solar home systems in rural India by using mobile phones technology to transform recurring energy expenditures into an eventual capital asset purchase. Scaling up of solar “leasing as a service” model. • Development Impacts: Increased access to affordable clean energy for base of the pyramid (BoP) consumers in rural India, avoiding the greenhouse gas emissions by reducing kerosene usage. Project Sample: Innovation on Climate Financing
  10. 10. Issues & Opportunities Predominant investments in energy sector Private sector and adaptation investments? Beyond agribusiness Leveraging policy dialogue for an enabling environment for private sector- beyond PPP?
  11. 11. For further information change-disaster-risk-management/main financing/main