Current trends in financing sustainable low-carbon transport and how climate finance can play a bigger role. Presented by Benoit Lefevre at Transforming Transportation 2015. Transforming Transportation 2015: Smart Cities for Shared Prosperity is the annual conference co-organized by the World Resources Institute and the World Bank.

1. www.TransformingTransportation.org
Current Public and Private Financial
Flows and Role of Climate Finance
in the Transport Sector
Benoit Lefevre
Director, Energy & Climate, WRI Ross Center forS
ustainable Cities, WRI
Presented at Transforming Transportation 2015

2. BENOIT LEFEVRE, PHD
DIRECTOR ENERGY & CLIMATE, WRI ROSS CENTER FOR SUSTAINABLE CITIES, WRI
CURRENT PUBLIC AND
PRIVATE FINANCIAL FLOWS
&
ROLE OF CLIMATE FINANCE
IN THE TRANSPORT SECTOR
Transforming Transportation
Washington, USA – January 16th, 2015

3. WRI Ross center for sustainable cities
Finance-related activities:
1) Track financial flows + Investment needs :
big picture + detailed analysis (countries, private sources)
2) Increase, improve and popularize (climate)
finance options
3) Support developing countries & cities,
Highlight public instruments to mobilize funding
& INCREASESHIFT

4. Outline:
1.Landscape of current financial flows
2.Investments needs
3.Role of (public) climate finance

5. Current
public and private
financial flows in
transport ?

6. Financial flows to transport:
a Trillion Dollar Question
1. Global annual investment
2. Only capital assets (not
operational or consumer
spending)
3. All modes (i.e. land, air, & water)
4. Public and Private sources
5. Domestic and cross-border

7. How much is invested annually
in the transport sector?
$1.4 - $2.1 trillion

8. What portion is invested in
developing countries?
About 24%,
or $500 billion

9. What portion comes from
private investors?
About 58%
or $1 trillion

10. Is public or private investment
larger in developed countries?

11. Is public or private investment
larger in developing countries?

12. What portion of public investment
comes from domestic budget?

13. Investments needs
in transport ?

14. How much do we need to invest in
Transport?
$0
$20
$40
$60
$80
$100
$120
McKinsey: US$24 trillion
WEF: US$33 trillion (4DS) | US$36.7 trillion (2DS)
OECD: US$11.3 trillion
(trillion)
IEA: US$118.2 trillion (4DS) | US$ 98.2 trillion (2DS)
_____________________________
Sources:
1) Global Land Transport Infrastructure Requirements, International Energy Agency, 2013
2) The Green Investment Report, The ways and means to unlock private finance for green growth, World Economic Forum, 2013
3) Infrastructure productivity: How to save $1 trillion a year, McKinsey Global Institute, 2013
4) Infrastructure investment needs of low-carbon scenario, The New Climate Economy, 2014
5) Strategic Transport Infrastructure Needs to 2030, OECD, (2012)
NCE: US$13.67 trillion

15. Estimating Annual Investment Needs on
Transport
4DS (2015-2030): ~US$3.1 trillion / year
2DS (2015-2030): ~US$2.8 trillion / year
IEA
 Sectors: Road and Rail
 Range: 2010 - 2050
 Climate Scenario: 4DS and 2DS (based on sectoral shift)
OECD
 Sectors: Airports, Ports and Oil & Gas (T & D)
 Range: 2009 - 2030
 Climate Scenario: Not specified
Based on our estimate of US$1.4 – 2.1 trillion spending; transport infrastructure will
remain underfunded by at least a TRILLION dollars.

16. What role for
Public Climate
Finance?

17. Role of International Public Climate Finance
GIZ sourcebook : Urban
Transport & CC
Transport-NAMA database
Readiness for Climate
Finance

18. Environmental/Climate Funds
Name Acronym
Year
Created
Admin
Total
Spending
Total Spent on
Transport
Proportion
MULTILATERAL
Global Environment
Facility
GEF 1991 WB $4.5 billion $292.5 million 6.5%
Clean Technology Fund CTF 2008 WB $2.3 billion $361 million 15.7%
Global Climate Change
Alliance
GCCA 2007 EC $368 million $10 million 2.7%
IDB Sustainable Energy
and Climate Change
Initiative
SECCI 2007 IDB $58.7 million $5.2 million 8.9%
ADB Climate Change
Fund
CCF 2008 ADB $43.3 million Unknown Unknown
ADB Clean Energy Fund
(Partnership Facility)
CEF(PF) 2007 ADB $72.3 million $900,000* 1.2%
Partnership for Market
Readiness
PRM 2012 WB $5.25 million Unknown Unknown
BILATERAL
International Climate
Initiative
ICI 2008 BMU $1.06 billion $20.49 million 1.2%
Japan Fast Start Fund
Initiative
n/a 2009 JICA $13.2 billion Unknown Unknown
Environmental/
Climate Funds
*Estimated

19. International public climate
finance should offer leverage.

20. Public sector intervention to mobilize private investment
A Mix of Approaches:
- Policy instruments + financial instruments used in
coordination
- Market + project level intervention

21. WHAT CAN TRANSPORT CLIMATE FINANCE SUPPORT?
CTF GEF Japan FSF NAMA Private
Transport Mode
Road x x x x x
Rail x x x x x
Urban Public x x x x x
Non-motorised x x x x x
Type of Support
Concepts & plans x x x
Infrastructure x x x x x
Operations & Maintenance x x x x x
Technology Transfer x x x x
Capacity Building x x x
Support Instruments
Grant x x x x
Loan x x x x
Technical Assistance x x x

22. Who can access the funds?
Environmental/
Climate Funds
National
Government
Regional
Government Private Sector
Local
Government
Eligible World Regions:
Global Environment Facility (US$4.5 billion)
Clean Technology Fund (UD$2.3 billion)
International Climate Initiative (US$1.6 billion)
Sustainable Energy and Climate Change Initiative (US$58.7 million)*
Clean Energy Fund (US$72.3 million)
Climate Change Fund (US$ 43.3 million)
Global Climate Change
Alliance
(US$368 million)**
Fast Start Fund
Initiative
(US$13.2 billion)
* As of 2011
** Funds cannot be allocated to projects at the local level
Available
Climate
Funds

23. What is “Readiness”?
23
Climate Financiers
Recipient
Country/City
Status Quo
“Readiness”
Climate Financiers
Recipient
Country/City

24. Transport Readiness

25. Two sides to readiness (1 of 2)
Benefits to Donor/Lender Benefits to Local Objectives
1. Attract the
Private
Sector
2. Focus on
Institutional
Capacity
 Meet the
requirements
for co-
financing
 More
effective
compliance
reporting
 Increase local
private sector
capacity
 Develop long-term
skills
 Leverage
more project
resources
 Enhance
collaboration
among agencies
 Manage
international
investment

26. Two sides to readiness (2 of 2)
Benefits to Donor/Lender Benefits to Local Objectives
3. Develop
Financial
Strategy
5. Gather
Good Data
 Distribute
investment
risk
.
 Create
defensible
carbon offset
credits
 Reduce debt
obligation
 Use data for
ongoing projects
 Track co-benefits
 Maximize
investment
impact
 Strengthen MRV
framework to
verify results
4. Plan Early
& Upstream
 Increased data
availability
 More finance
opportunities
 Clear project roles/
responsibilities

27. Any good news?

28. Good news: Development
banks are allocating more to
low-carbon transport
Source: ADB

29. Good news: Climate funds are
allocating more to transport.
0
5
10
15
20
25
30
2006 2007 2008 2009 2010 2011 2012 2013
CTF
GEF
GCCA
NDF
CEF
SECCI
CCF
PMR
FSF
ICI$23
Percent
Of Fund
Invested
in
Transport
(Bubble Size is Millions of USD of Investment)
$370
$1270
$45.3
$3.0
$5.0
$5.2
$10
$0.9

30. Good news: private sector investment is
growing

31. MERCI !
Benoit Lefevre, PhD
Director Energy & Climate, WRI Ross center for sustainable cities
blefevre@wri.org
www.wri.org
www.embarq.org
www.thecityfix.com