International CEO Forum VI of the DFIs 2009
“Leading the Recovery:
Environmental, Social and Governance Imperatives for DF...
Economic Damage by Weather Related Disaster
USD
Billion



              Economic Damage
              Insurance Payment
 ...
Fluctuation of Rain Fall in Japan


                         Annual actual
             Average
                          ...
Funding Demand by the constraints

Funding Demand( Additional)
(USD billion)

    1.00                                    ...
Finance Flow to developing countries
(USD billion )

    200
                                                             ...
Potential Credit Demand post 2012 (Value)

Billion USD
(PA)


                                                            ...
Innovative Financing Tools

                              <Possible Innovative Tools>

Mitigation( USD430billion)         ...
Carbon Capture and Storage
                            CCS                           Now
              Capture            ...
Forest Credit



                           World Bank
         Contributi                       Policy
Japanese on       ...
Biodiversity Credits

                Biodiversity
                ①Limitation of development
                ②Compensatio...
“LIFE” (Leading Investment to Future Environment) Initiative by JBIC


●The LIFE will …
・support both public and private s...
Aims of LIFE


1 Mobilization of private fund
Demand is enormous.
Mobilize of private funding is inevitable
Limitation of ...
Commercially viable BAT
  ~ Steel industry ~
Conclusion




             Public- Private- Financial Partnership ( PPFP)

New Market Mechanism for Climate Change with f...
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Takashi Hongo Jbic Revised

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Takashi Hongo Jbic Revised

  1. 1. International CEO Forum VI of the DFIs 2009 “Leading the Recovery: Environmental, Social and Governance Imperatives for DFIs” Financing for Climate Change Adaptation and Mitigation October 22, 2009 Manila, Philippine Financing for Climate Change Adaptation and Mitigation ~ Financing Gap and Innovative Financing Mechanism ~ Takashi Hongo Special Advisor and Head Environment Financing Engineering Department Japan Bank for International Cooperation
  2. 2. Economic Damage by Weather Related Disaster USD Billion Economic Damage Insurance Payment Trend of damage Trend of Payment © 2007 Munchen Re
  3. 3. Fluctuation of Rain Fall in Japan Annual actual Average Trend Ra in Fa ll 199 1900 1950 0 Source: Japans government’ MLIT HP
  4. 4. Funding Demand by the constraints Funding Demand( Additional) (USD billion) 1.00 Forest/ 0 Bio Diversity ( ?) Water Infra (200) 50 0 Adaptation (75~100) Mitigation (CO2 Constraint) (430) Emergin g Futur
  5. 5. Finance Flow to developing countries (USD billion ) 200 Finance Gap ⇒Private but Additional supported by the Public Funding 100 0 Base load 6 30 20 100 100 100 100 Total ODA Multilateral Emission Private Public Finance Funding Trading Direct Finance (Export Credit etc.) Demand Investment
  6. 6. Potential Credit Demand post 2012 (Value) Billion USD (PA) Credit Price( ton) Domestic Reduction Ratio Assumption CO2 emission of OECD(+) countries shall be reduced by 25% by 2020.
  7. 7. Innovative Financing Tools <Possible Innovative Tools> Mitigation( USD430billion) Emission Trading Carbon Capture & Storage REDD Adaptation(USD100Billion) Weather Derivative Water Infra(USD200billion) Public Private Partnership Bio Diversity( USDXbillion) PPP, Bio Diversity
  8. 8. Carbon Capture and Storage CCS Now Capture Climate CO2 Change CO2 Storage [Oil, gas, Coal ] Fossil Fuels In Salah Gas Field ・Step: Capture – Transportation – Storage Large scale CCS ・Additional cost: ⇒ Carbon Credit as revenue stream
  9. 9. Forest Credit World Bank Contributi Policy Japanese on FCPF Dialogue Host Governm (165 Mil USD ) Readiness Fund governme ent nt etc Implementatio Investme Fundi Sustainab n Private nt ng le activities of Carbon Compani Forest Fund es Managem Fores Carbon emission ent Fores t reduction t Credit Credit s s Environment Contribution Climate Change Mitigation
  10. 10. Biodiversity Credits Biodiversity ①Limitation of development ②Compensation, alternative development ③More funding – mobilization of private money ⇒ Biodiversity credits Biodiversity Credit Mechanism Supply Demand Steps ①Analyze of BD ●CSR (Voluntary ) ②Measurement ●Obligation for Biodiversity ③Issue of credits development Investment ●Global framework Development (Contribution for (Negative Impact) BD) Offset by BD credit
  11. 11. “LIFE” (Leading Investment to Future Environment) Initiative by JBIC ●The LIFE will … ・support both public and private sectors, ・co-operate with Multilateral Development Banks (MDBs) and mobilize private finances. ●The JBIC’s financial support under the Initiative will be around 5 Billion USD for the next 2 years. JBIC Loans / Equity Investment MDBs Private Financial (ADB, World Bank Group, etc) Institutions Catalytic Role Co-operation (Co-finance, Information Sharing, etc) Loans, etc Loans, etc 4 Main targeted sectors of the Initiative are ... ・Clean Power Generation (Solar, Geothermal, Wind Power, Clean Coal Power Plant, etc) ・Energy Efficiency Improvement (Upgrading of Existing Transmissions and Distributions, Modernization and Heat Recovery of Steel Furnaces and Cement Kilns, ESCO (Energy Service Company), etc.) ・Water (Water Purification and Supply, Sewage System, Wastewater Treatment, Desalination and Water Processing, etc) ・Urban Transportation (Modal Shift in Densely Populated Areas, etc)
  12. 12. Aims of LIFE 1 Mobilization of private fund Demand is enormous. Mobilize of private funding is inevitable Limitation of public funding 2 Specification of commercially viable BAT Diffusion of BAT Establishment of global de fact standard The first step of Environment Finance
  13. 13. Commercially viable BAT ~ Steel industry ~
  14. 14. Conclusion Public- Private- Financial Partnership ( PPFP) New Market Mechanism for Climate Change with financing Public Sector (Improvement of investment climate) Private Sector (Driving force) Financial Sector (Push last one mile)

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