Sustainable Energy & Climate Change Unit Wesly Ureña Renewable Energy Expert May 14, 2009 Sustainable Energy & Climate Change Unit Infrastructure and Environment Sector May 14, 2009

SECCI’s Operational Framework As of January 1, 2009, SECCI became a Unit within INE (ECC) with responsibility for: Stand-alone & Mainstreamed Activities Mainstreamed into: Country programming (VPC) Sector Work (VPS) Projects (VPS, VPP) Knowledge creation and dissemination Innovation (e.g. Investment Grant)

SECCI’s Results by Strategic Pillars 1.RENEWABLE ENERGY AND ENERGY EFFICIENCY 18 TCs (US$10m) / 5 Loans (US$300m) 2.BIOFUELS 8 TCs (US$4.2m) / 4 Loans (US$310m) 8 TCs (US$4.2m) / 4 Loans (US$310m) 3.CARBON FINANCING 5 TCs (US$2.8m)

SECCI’s Results by Strategic Pillars (cont.) 4.ADAPTATION TO CLIMATE CHANGE 1 TCs (US$1m ) 5. MULTI-PILLAR 6 TCs (US$3.1m) / 2 PBL Loans (US$500m)

Pillar 1: Renewable Energy & Energy Efficiency: Strategic lines of action Assess RE/EE potential in sector and country programming Minimize policy barriers and establish incentives through policy reforms Provide technical cooperation for project assistance & policy lending loans Mainstream RE/EE in IDB pipeline and develop new RE/EE projects Scale up new RE/EE technologies Examples

SECCI Pillar 1 Projects Renewable Energy and Energy Efficiency Peru: Support to Ministry of Energy for the development of biofuels and renewable energy regulatory framework Brazil: US$120M loan to wind turbine blade manufacturer for facilities expansion Ecuador: Support to textile company for expansion of small hydro power plant and EE investment plan; both investments will be included in subsequent IDB financing through private sector window Central America: Energy efficiency programs for water utilities programs, including investment plans and capacity building. A regional EE methodology will be developed to be used by water companies Caribbean: Assess potential for EE in hotel industry and micro- generation using renewable energy

Pillar 2: Sustainable Biofuels Strategic lines of action Viability of biofuels by country and region basis Country level policy assistance for biofuels Finance biofuel facilities and related feedstock, production and distribution infrastructure Financial risk re-assessment and dissemination of emerging technologies Sustainability tool developed: Biofuels Sustainability Scorecard ( Examples

SECCI Pillar 2 Projects Bioenergy Biofuels Sustainability Scorecard Launched Sept. 9 th, Consistent with principles and criteria of Roundtable of Sustainable Biofuels Biofuels “ Blueprints ” for the region Action plans including assessment of regulatory issues and legislation, fiscal impacts analysis, technical feasibility studies, environmental and social issues related to potential production Plans completed for Haiti, Dominican Republic, El Salvador Private Sector Financing Companhia Nacional de A çú car e Á lcool (CNAA) 3 greenfield ethanol plants (420M liters/year of ethanol) Co-generation capacity of 180MW US$1.1 billion total investments US$270 million IDB A-loan, US$350 million B-loan (commercial banks)

Pillar 3: Carbon Finance Strategic lines of action Mainstream carbon finance in IDB pipeline of projects Develop “programmatic” CDM projects Re-assessment of transactions costs and risks related to supply of CDM projects Strengthen LAC capacity to participate in carbon market Contribute to long-term sustainability of the carbon market Examples

SECCI Pillar 3 Projects Increasing Access to Carbon Credits Colombia: Ecopetrol: pipeline of projects to reduce GHG emissions Bancolombia: support the establishment of a “Low Carbon Strategy” to support low carbon projects Chile: development of a international competitive bidding to sell the potential Verified Emission Reductions (VERs) associated with an “efficient lightbulbs” housing program Brazil: development of methodology to estimate CERs for São Paulo subway for subsequent approval by UN

Pillar 4: Adaptation to Climate Change Strategic lines of action Mainstream climate risk in country programming, sectors and projects e.g. Climate change modeling, finance country-level climate change vulnerability assessments, risk assessments, and strategic identification of adaptation measures. Invest to reduce the vulnerability of urban and regional infrastructure to climate risk. Identify and protect capital assets at risk to climate change impacts. Include within natural disasters risk. Identify and develop adaptation pilot projects on a regional basis to be submitted to the Climate Investment Funds (CIF) Examples

SECCI Pillar 4 Projects Adaptation to Climate Change Panama: Vulnerability and Adaptation Program Chile: Economic Impacts of Climate Change on water availability FONTAGRO (Regional Fund for Agricultural Technology) Adaptation of Productive Systems to Climate Change Bolivia: Adaptation pilots on high-altitude micro-basins NCAR Climate Modeling Caribbean Community Climate Change Center (C5) Adaptation strategies for Caribbean countries

Transition to Post –Kyoto Climate Investment Funds (CIF) Two Funds: Clean Technology Fund (CTF) and Strategic Climate Fund (SCF) World Bank (WB) as trustee, WB and Regional Development Banks (RDBs) as implementing agencies Purpose: Support low-carbon and climate resilience investments until the post Kyoto architecture is effective Scale-up investments moving from projects to programs and accelerate public and private investments Amount: US$ 6.1 billion pledged for 2009/10 Timeframe: next 3-5 years Mutual synergies and leverage with SECCI

Climate Investment Funds (cont) Ministry Finance to request and lead joint programming with World Bank to develop country investment plan Further development of proposed projects/programs – with up to US$ 1 million grant from CTF Project preparation to follow IDB procedures INE/ECC coordination role Induce shift in IDB lending portfolio to low carbon technologies and climate resilience CIF concessional finance to leverage and be blended with IDB ordinary capital loans Incremental cost of climate change element covered by CIF

Partnership Forum – bring together finance, development and climate change communities Strategic Climate Fund Clean Technology Fund Observers from organizations with mandate to provide investment in clean technology, e.g. GEF, UNDP Trust Fund Committee ( 8 contributors / 8 recipient; WB and RDB) Trust Fund Committee (8 contributors / 8 recipients, WB and RDB) Possible new program small-scale renewable energy for the poor (SREP) Forestry Investment Program (FIP) Pilot Program for Climate Resilience (PPCR) Sub- committee Organization of the CIF Funds MDB Committee: World Bank, RDBs and the IFC CIF Admin Unit and Secretariat in WB

Clean Technology Fund (CTF) Donor countries contributing around $5 billion: Australia, France, Germany, Japan, Spain, Sweden, the UK, and the US Recipient countries Brazil, China, Egypt, India, Mexico, Morocco, South Africa, and Turkey Mexico and UK to serve as co-chairs

Strategic Climate Fund (SCF) Donor countries contributing around $1 billion: Australia, Canada, Germany, Japan, Netherlands, Norway, Switzerland, and the UK Recipient countries Algeria, Bangladesh, Costa Rica, Indonesia, Kenya, Thailand, and Yemen Sub-Committee on the PPCR: Australia, Bolivia, Germany, Japan, Maldives, Samoa, Senegal, the UK and Yemen

Support Low–Carbon Investments Mexico Investment Plan Finance Ministry actively leading Investment Plan and co-chairing the CTF TFC IDB public and private sector activities within:  Renewable Energy Program: for scaling up investment in wind power and small-scale hydropower, leveraging Mexico’s Green Fund and assistance with costs of interconnection costs and technology development  Energy efficiency program for scaling-up FIDE (phase II) – fore replacement of inefficient motors in industry, and piloting program for energy efficient Tortilleria-makers

Support for Climate Resilience Pilot Program for Climate Resilience (PPRC) 10 possible pilots selected (7 countries and 3 regional pilots)  In LAC: The Caribbean as a Region and Bolivia as a country Objective  Pilot new approaches for integrating climate-related risks within country planning to demonstrate climate resilient development  Provide policy and technical support to strengthen institutional capacity for climate resilient development (grants)  Concessional finance for investment in climate resilient infrastructure  Develop understanding and ensure lessons learnt are shared at the regional and international levels