S2 winrock ec leds presentation for oecd workshop edited

1. EC-LEDS Clean Energy
Program
Georgia Climate Finance Strategy
Roadmap
June 22, 2017
Giorgi Giorgobiani
Yoav Brandt
EC-LEDS Clean Energy Program

2. EC-LEDS Program - Georgian LEDS Development
OverviewGoal: ensure Georgia’s transition to a sustainable low emission path of
economic and social development, through:
• identification of main sources/sectors of
emissions and their trends in development
process,
• assessing and removing barriers to low
emission development,
• defining goals/policies/measures within each
sector in the context of sustainable
development of the country,
• establishment of relevant legislation system,
infrastructure and coordination process for
implementation and monitoring of results and
• mobilizing the national and international
financial sources for implementation of LEDS.
EC-LEDS Clean Energy Program

3. LEDS Sectors
Energy Buildings Transport Industry
Agricultur
e
Waste LULUCF
EC-LEDS Clean Energy Program

4. EC-LEDS Program - Georgian LEDS Development
OverviewPart 1: National approach to sustainable development and climate change
 Introduction
 Combating the threat of climate change
 Step towards Europe – Association Agreement and beyond
 Fostering economic development
 Achieving energy security
 Georgia now
 The vision for 2030
 The scenarios for reaching 2030 vision
Part 2: Georgia’s Low Emission Development Strategy
 Energy (including electricity generation, energy supply and renewables)
 Buildings
 Transport
 Industry (fuel combustion)
 Industry (Industrial Processes)
 Agriculture, forestry and land management
 Waste and wastewater
 Land use, land use change and forestry (LULUCF)
Part 3: Implementing Low Emission Development Strategy
 Cross-cutting issues
 Capacity Building
 Communication strategy
 Technology transfer and development (incl. research and innovation)
 Enforcing LEDS
 Institutional framework
 Attracting financing
 Measurement, Reporting and Verification (MRV)
EC-LEDS Clean Energy Program

5. Blended Climate Finance & LEDS Implementation
• Strategic use of Blended Climate Finance: high potential in full
scale implementation of LEDS mitigation measures
• High likelihood of Positioning Georgia as:
• Attractive investment destination for Blended Climate Finance
• Regional Climate Finance & Technology Transfer
Lab/hub/testing ground:
– New approaches to Climate Finance
– New technologies
Georgian
LEDS CF
sources
CF
Funds
MDBs
DFIs
Mul-Don
/PPP
Funds
Donors
Private
Infra
Funds
Impact
Invest
Funds
Green
Bonds
Blended Climate
Finance
Overview
EC-LEDS Clean Energy Program

6. Georgia & Blended Climate Finance Potential
Strengths - Georgia
• Small middle Income country
• European Association Agreement
• Large number of climatic regions
• Educated population
Weaknesses - Historic track record
• Unimpressive involvement in GEN 1
Climate Finance- CDM
Opportunities – Climate Finance
• Early stages of development &
implementation
• Constantly evolving & dynamic
• Learning by Doing – shared
experience of all stakeholders
Threats – Closing Window of
Opportunity
• Timing Critical- Window of
opportunity is Now
• Focus on large, low-income countries
Small & Motivated country willing to allocate resources & effort can position itself
as a high priority Climate Finance destination but Timing is Critical
EC-LEDS Clean Energy Program

7. • BCF – Not a long-term subsidy program funded by donor countries
• Program design, origination & implementation
• BCF insufficient to create attractive investment conditions for attracting
international and domestic private sector investors
• Reform of regulatory & tariff framework & higher utility tariffs - will be
required
Government & citizens of Georgia as equal risk-taking stakeholders in Blended
Climate Finance
Blended Climate
Finance
Overview
Blended Climate Finance – Not A Riskless Undertaking
EC-LEDS Clean Energy Program

8. Goals & Principles- “Target & Discipline” approach
GOALS
• Maximize:
 Domestic & intl. public
Climate Finance flows
 Catalytic impact in attracting
private finance
 SDG Development Impact
• Minimize:
 Costs to Georgian economy &
stakeholders
PRINCIPLES
• High country ownership &
involvement in procurement &
allocation of Blended Climate
Finance
• Concessionality of Blended
Climate Finance must reach end-
users/final recipients
• Impact Monitoring – Critical
activity
• Integration of diversified base of
private sector finance sources
Climate Finance
Strategic Roadmap
EC-LEDS Clean Energy Program

9. Overview of CF Strategic Roadmap Recommendations
Recommendations:
Overview
• Establishment of the Georgian Green Investment Bank
• Establishment of the Climate Intelligence Task Force
• Optimization of Domestic & International Climate Finance Resources
• Required Next Action Items & Steps
EC-LEDS Clean Energy Program

10. Establishment of Georgian Green Investment Bank (GGIB)
• Green Investment Banks endorsed by UNDP, OECD & other organizations
• GGIB as national implementing arm of GoG in LEDS implementation:
- Direct access to GCF & other public finance sources
- Degree of Independence
- Ability to provide Direct Concessional loans
- Exit strategy structuring – from inception
- Technology Transfer capabilities
- Public & Private Sector Financial Sources Identification & Relationship Management
• Candidate for GGIB optimal structure is expected to:
- Gain Direct Access GCF/GEF Accreditation for Lending and Blending in as little time as
possible
- Degree of Independence from Georgian Government
- High degrees of accountability and transparency
- Strong Government Support - Administrative Barrier reduction
- Capacities, skills and expertise harmonized with those expected from GGIB
Recommendation #1:
Green Investment
Bank
EC-LEDS Clean Energy Program

11. Establishment of Climate Intelligence Taskforce (CIT)
• Ability & expertise to prepare Georgia for BCF & LEDS Implementation
• Serve as the Government’s advisor and support provider on:
• Policy, research & strategy
• Administrative, regulatory & legal issues
• Main responsibilities and priorities:
• Establishment of the Georgian Green Investment Bank
• Establishment of Central MRV Design & Implementation Facility
• Coordination of donor climate related activities:
- Optimization of Donor support programs
- Alignment of donor support programs with national development goals
• AD-Hoc Strategy support & policy research
• Stakeholder Identification & Management
Recommendation #2:
Climate Intelligence
Taskforce
EC-LEDS Clean Energy Program

12. Optimization of Intl. & Domestic Financial Sources
Recommendation #3:
Optimization of Intl. &
Domestic Financial
Sources
• (In Development)
EC-LEDS Clean Energy Program

13. Required Next Action Items & Steps
Recommendation #4:
Required Next Action
Items
• Full Investment Plan for LEDS Mitigation Measures:
• Detailed design of BCF & implementation-ready programmes
• Program prioritization based on Development Impact Cost Curve
• Full Investment Plan scope would include for each program/mitigation measure:
 Detailed design of programme structure & business plans
 Detailed Mapping of Investment Barriers & Risks associated
 Detailed Financing requirements including:
• Detailed Investment cost assessment
• Identification of required Financial Instruments
• Identification of most relevant Blended Climate Finance sources & Financing mix
• Exit strategy for Green Investment Bank
 Portfolio-level detailed Development Impact Cost Curve
EC-LEDS Clean Energy Program

14. Required Next Action Items & Steps
Recommendation #4:
Required Next Action
Items
• Detailed Review Georgian State Climate Related Expenditures & Revenues:
• A detailed review of the expenditure and revenues on the state budget level and on the
municipal level to assess their climate change related risk exposures is recommended.
• Tax Revenue exposure to Climate related risks is recommended as it is non-linear & can
therefore be more vulnerable to risks than specific industries
• The outputs of review would be:
a. Identification of climate related savings
b. Reallocation of resources to high-impact climate related policies & programs
c. Improved prioritization of scarce resources
d. Identification of Georgian State Budget vulnerability to climate change risks
e. Identification of low-cost mitigation measures for Tax Revenue Climate vulnerability
EC-LEDS Clean Energy Program

15. THANK YOU!
EC-LEDS Clean Energy Program