Climate Investment Funds (CIF) through ADB and World Bank Preparation of a Strategic Pilot Program for Climate Resilience (PPCR) Project - Phase I (November 2010- January 2013) Climate Investment Funds (CIF) Grant No. TF097459 through ADB and World Bank

Consultative Workshop on PPCR Phase I Implementation 23-24 April 2012 Preparation of a Strategic Pilot Program for Climate Resilience (PPCR) Project - Phase I Consultative Workshop on PPCR Phase I Implementation 23-24 April 2012 Private Sector Scoping Study Prepared by: Mr. Keo Chamroeun, keo1964@gmail.com Mr. Michele Mottolese, michelemottolese@gmail.com www.CamMoE-CCD-PPCR.org.kh www.pilot-program.blogspot.com

TORs for a Scoping Study on PS Engagement in CCA Background: The private sector scoping study as one of the two activities under Component 3, linked to SPCR implementation. Objective: To formulate specific private sector interventions for inclusion in the detailed design of Cambodia’s SPCR and possibly other climate change adaptation projects. Sectors: agriculture, rural infrastructure, water resources. Target: Organized farmers, MSMEs, Companies and Institutions, NGOs, MDBs, Government agencies participating in the program Outputs: 1 Study report; 1 Mission report, 1 PowerPoint Timeframe: Mid Feb – Mid July 2012 Human Resources: 2 Consultants and inputs from PPCR Team. www.CamMoE-CCD-PPCR.org.kh www.pilot-program.blogspot.com PPCR Phase I – Private Sector Scoping Study

Methodology and Work Plan Desk review; semi-structured interviews with Key Informants, included data collection; Selected field visits; Technical Meetings Market Development Analysis approach Work Plan - Desk Review - Key Informant Interviews - Milestone: matrix with initial options - More KIIs - Field visits - Technical meetings - Milestone: Report Outlines - Follow-up KIs - Draft report, collection of feedback - Milestone: final Report produced Mid Feb - March April - May June - Mid July www.CamMoE-CCD-PPCR.org.kh www.pilot-program.blogspot.com PPCR Phase I – Private Sector Scoping Study

Report Structure Sections Executive Summary (in English and Khmer) Introduction and Overview Legal and Institutional Background Objective of the Mission Results and Financial and Economic Aspects Findings and Analyses Conclusions and Recommendations www.CamMoE-CCD-PPCR.org.kh www.pilot-program.blogspot.com PPCR Phase I – Private Sector Scoping Study

CCA and Private Sector Vulnerabilities Vulnerability: the degree to which a system is susceptible to, and unable to cope with, adverse effects of climate change (IPCC 2007) Agriculture sector as most vulnerable due to its high dependence on climate and because of low adaptive capacity (ADB, 2009, CHDR, 2011). Climate Change increases challenges for water management and infrastructures (SPCR). Examples of vulnerabilities: General awareness of PS but lack of practical options. Changing of rice planting patterns and need for more farming flexibility. A similar scenario applies to the fishery sector. Clients of MFIs affected by 2011 flooding have difficulties in re-payment, which increase lending risk. www.CamMoE-CCD-PPCR.org.kh www.pilot-program.blogspot.com PPCR Phase I – Private Sector Scoping Study

PPCR Phase I – Private Sector Scoping Study www.CamMoE-CCD-PPCR.org.kh www.pilot-program.blogspot.com PPCR Phase I – Private Sector Scoping Study

CCA and Private Sector Opportunities Adaptive Capacity: the ability of a system to adjust to climate change to moderate potential damages, take advantage of opportunities, or cope with the consequences (IPCC 2007). Solid Policy Framework for both CC mainstreaming and PS support. Examples of response to CC do exist and have three characters: Facilitated access to credit Deployment of ‘know-how’, appropriate technologies and business services. Partnership among private sector, civil society, public sector. New international mechanisms for CC finance and technology transfer can provide new opportunities for Cambodia, but cross-sector coordination, and partnership with private sector is necessary (CHDR, 2011). www.CamMoE-CCD-PPCR.org.kh www.pilot-program.blogspot.com PPCR Phase I – Private Sector Scoping Study

Engaging Private Sector in CCA (1/2) To engage PS in investing in CCA, we suggest to work simultaneously in: Supporting Expansion of Financial Services, expanding MFIs and other institutions credit via credit guarantees and other measures such as TAs, allowing PS to reduce costs of investment Supporting Expansion of Non Financial Services: transfer of know-how, business management, access to better inputs, markets, infrastructures, to reduce risks for investments Who: Ministries and Sub-National level, Development Partners and NGOs, Private Sector How: PPP; climate change development assistance can play a triggering role with a multiplier effect www.CamMoE-CCD-PPCR.org.kh www.pilot-program.blogspot.com PPCR Phase I – Private Sector Scoping Study

Engaging Private Sector in CCA (2/2) Sample Diagram of Market System www.CamMoE-CCD-PPCR.org.kh www.pilot-program.blogspot.com PPCR Phase I – Private Sector Scoping Study

Initial Findings for PS Engagement (1/3) Agriculture Develop framework for innovative micro-credit lines Supporting the development of resilient rice seeds market Support rice-millers in investing in gasifies; expanding biodigesters programme Enhancing rice-millers post-harvest facilities via innovative credit line Crop insurance and other micro-insurances Support climate change adaptation in fishery sector Enhancement of CC-related businesses among MSMEs via pro-poor VCM www.CamMoE-CCD-PPCR.org.kh www.pilot-program.blogspot.com PPCR Phase I – Private Sector Scoping Study

Initial Findings for PS Engagement (2/3) Rural Infrastructures Developing PPP framework for Climate proofing rural infrastructures Capacity building for national Consulting and Construction firms Promotion of PS investments in provincial roads via BoT model PS investments in provincial markets and other infrastructures /services Expanding hybrid rural electricity enterprises (mini-grids). www.CamMoE-CCD-PPCR.org.kh www.pilot-program.blogspot.com PPCR Phase I – Private Sector Scoping Study

Initial Findings for PS Engagement (3/3) Water Resources Options for Private Sector involvement in O&M in irrigation schemes Supporting expansion of small irrigation schemes via credit provision Options for enhancing drip-irrigation markets Evaluating drinking water via PS concessions Drinking water via solar panels www.CamMoE-CCD-PPCR.org.kh www.pilot-program.blogspot.com PPCR Phase I – Private Sector Scoping Study

Inputs for Target Areas of Reference SPCR engagement: Agriculture & water supply: Koh Kong and Mondulkiri Agriculture & business adapt.: BTM, KCM, KTH, SRP Provincial roads: PRV, SVR, KCN, KSP South. Corridor towns: Poipet, BTB, Neak Leung, Bavet. Flood-resilient infrastr.: BTM, SRP, KTH, BTB, PST, KCM S-Medium scale irrigation: KTH, BMC, SRP Flood and drought management: PST, Kratie Commercial/Agricultural Activities: High in BTB, PRV, KCM. Environmental vulnerability: Very high in BTB, PRV; High in KCM, KCN, KTH, SVR (Source: NAPA 2006). www.CamMoE-CCD-PPCR.org.kh www.pilot-program.blogspot.com PPCR Phase I – Private Sector Scoping Study

Some Points for The Way Forward Boosting partnership among social investment funds, MFIs, Ministries, Project developers. Governance and O&M of irrigation schemes. Agricultural seeds markets expansion and flexibility in farming. The continuum mitigation – adaptation Sector-specific Technical Meetings Day 2: Multi-stakeholder Platform RGC/Donors/NGOs/PS partnership in supporting appropriate technology development and reduction of business risk. Emergency, rehabilitation and DRR: PS/NGOs synergies A platform for awareness raising and information sharing. www.CamMoE-CCD-PPCR.org.kh www.pilot-program.blogspot.com PPCR Phase I – Private Sector Scoping Study

Thanks www.CamMoE-CCD-PPCR.org.kh www.pilot-program.blogspot.com