IG – Investor Guide for preparation of regional investment projects in Environment, Climate Change and Water in Central Asia (CA) Gilbert.Ahamer@wecoop2.eu

What is this meeting’s target? “Who will push?” – you  … and how does this IG help? To identify practical ways to enable CA countries to improve the process of bankable projects preparation To discuss and identify priority issues to maximize access by CA countries to IFIs investment using EU IFCA support. To identify infrastructure-related projects for consideration by IFIs and for presentation at the regional 7th WGECC in February 2018

This IG’s main target is to help you The EU blending approach combines several IFIs – for you CA IFI 2 IFI 1 IFCA How does the EU help? – by “blending” = … EU Investment Facility for Central Asia (IFCA) Green Climate Fund (GCF) European Investment Bank (EIB) European Bank for Reconstruction and Development (EBRD) French Development Agency (AFD) German Development Bank (KfW) World Bank (WB) Asian Development Bank (ADB) Asian Infrastructure Investment Bank (AIIB)

The IG main content and structure = Main part + annexes MAIN PART = 2 pages basic info about IFIs, IFCA and “blending” instruments: Definition Mission Project cycle ANNEXES = more details for interested readers on the respective IFIs: priorities of IFIs’ funding environmental & social project criteria for selecting submissions detailed footnotes facilitate own in-depth research Detailed environmental project selection criteria lists: main result

Components of “blending”: “Blending” Adds what is still missing GourmanD  gourmet … ask your neighbour … Typically, blending combines several types of financing from several FIs The lead FI can be a EU multilateral FI (EIB, EBRD, …) a EU national FI (KfW, ADB …) but not a non-EU FI (ADB, AIIB …) What types of blending? Each type answers to a need Direct investment grant Interest rate subsidy grant Technical assistance grant Risk capital Guarantee Reduce cost to end users Reduce interest cost (no favoured tool) Boost management & speed Absorbs some of perceived risk Guarantees some investments

IFIs’ project cycles are comparable … and have the same major steps GCF – EIB – EBRD – AFD – KfW – WB – ADB – AIIB The IFCA project cycle is analogous with its 7 steps 1. Identification: Projects are identified by the financial institutions and EU Delegations with the partner countries and, where relevant, regional organisations. The EU Delegations ensure the coherence of projects with EU policy objectives and sector priorities. Generation of a “pipeline”. 2. Preparation: The lead financial institution is in charge of submitting project proposals and trilateral consultations are held with EU DGs and financial institutions to secure matching criteria 3. Assessment: Relevant EU services will assess (i) the alignment to EU policy objectives, (ii) justification of need and added value, (iii) project’s social, environmental and climate change aspects, (iv) financial structure, while analysing political barriers & similar actions (see criteria), to secure project standards. 4. Board opinion: Opinions on EU grant requests are taken by consensus at meetings of the relevant Blending Framework Board (voting: Commission, the EEAS and the EU Member States); then the Commission takes their decision. 5. Contracting: The Commission decision to proceed with a project is followed by formal contracting, including signature of a delegation agreement with the lead financial institution. 6. Monitoring: The lead financial institution is responsible for project implementation (tendering & procurement), monitoring and (financial & operational) reporting, based on indicators. 7. Evaluation: Responsibility for the evaluation of blended operations is delegated to the lead financial institution.

How the IG is framed IG frames are: the EU & its democratic values and view of partnership & joint development The EU-CA Working Group process: 5th, 6th, 7th IFIs’ systems of rules and criteria CA partners’ needs in environment, water & CC CA regional cooperation … and EU’s commitment:

How you can use this IG in practice When sitting at your desk in your home office Look into your project idea: what type of financing is missing Compare with what IFCA allows and find a solution Look which IFI or FI might have a similar profile Look into the project criteria of these IFIs and look how to match your idea with them Focus on “social and environmental project criteria” and improve your project idea Secure the regional aspect of your project idea Increase the dialogue with other stakeholders to create a network of interests You may use the web-based “Knowledge Centre Platform” to substantiate dialogue Present interim project results on the platform for further solution building

One quick example: EIB How the EIB acts EIB = European Investment Bank = the EU bank How the EIB acts Lending: The vast majority of EIB financing is through loans, but EIB also offers guarantees, microfinance, equity investment, etc. Blending: EIB support unlocks financing from other sources, particularly from the EU budget. This is blended with loans to form a full financing package. Advising: Lack of finance is often only one barrier to investment. EIB helps with administrative and project management capacity to facilitate investment. EIB’s ENVIRONMENTAL AND SOCIAL STANDARDS: 1. Assessment and management of environmental and social impacts and risks 2. Pollution prevention and abatement 3. Biodiversity and ecosystems 4. Climate-related standards 5. Cultural heritage 6. Involuntary resettlement 7. Rights and interests of vulnerable groups 8. Labour standards 9. Occupational and public health, safety and security 10. Stakeholder engagement

The proposed timeline Receiving IFIs’ comments on this draft: November 2017 Final draft guide in English language: December 2017 Final draft guide in Russian language: January 2018

Anatoly Pichugin & Gilbert Ahamer Your WECOOP2 team Anatoly Pichugin & Gilbert Ahamer will be pleased about our joint discussion @wecoop2.eu