Engaging with the Green Climate Fund Tony Clamp, Deputy Director, Private Sector Facility Urvaksh D. Patel, Specialist, International Financial Institutions March 2018 | Tokyo, Japan

The Green Climate Fund Country Driven Approach Climate Impact Focus Paradigm Shift Potential Comprehensive Spectrum of Offerings to Countries Dedicated Private Sector Facility A mandate to promote low-emission and climate resilient development in developing countries 2

Approximately $3.7B for 76 projects in over 60 Countries A Growing Portfolio Kenya Peru Senegal Malawi Mexico Maldives Bangladesh Tuvalu Fiji Gambia Armenia El Salvador Tajikistan Sri Lanka Mali Viet Nam Chile Eastern Caribbean Samoa Vanuatu Cook Islands Mauritius South Africa Argentina Mongolia Uganda Status as of B19 (Feb 2018) Madagascar Namibia Morocco Ecuador Pakistan Rwanda Egypt Georgia Jordan Moldova Serbia Tunisia Uzbekistan Benin Nigeria Tanzania PNG Solomon Islands India Kazakhstan Bhutan Colombia Ethiopia Nauru Approximately $3.7B for 76 projects in over 60 Countries 3

59 entities accredited to date A Diverse Network of Partners Rwanda Morocco Ethiopia Kenya Argentina 59 entities accredited to date Senegal Namibia India Peru South Africa Mongolia China Korea Indonesia Bangladesh Antigua & Barbuda Fiji 4

GCF Approach – Accredited Entities Financial Instruments Grants Loans Guarantees Equity 5

GCF Approach – Other Partnerships Other modalities for involvement include: Executing Entity Any entity through which GCF funds are used for the purposes of implementing a project. Delivery Partner Institutions selected by the NDA to implement activities approved under the Readiness Program. Service Provider Any entity which the GCF directly contracts to carry-out specific work based on a solicitation of a particular request. 6 Common Common Less Common

How Does GCF Invest? GCF provides grants, debt, equity and guarantees to: De-risk investments and mobilize public and private sector funding Bundle small projects into investible portfolios Help develop public-private partnerships for infrastructure resilient projects Encourage innovation Support capacity building 7

Funding Proposals High impact potential Sustainability strategy Provisions for co-financing Link to national strategy or plan O&M costs covered Scale-up potential Right level of concessionality and financial instruments Low cost emission reductions Milestone-based disbursements Built on scientific evidence and lessons learned from previous projects

Japan and the GCF Contributor: USD 1.5bn pledged (#2) Board seats: Board and alternate Board member since inception (MOFA and MOF) AEs: Two entities accredited: BTMU and JICA Climate technology: leadership in automobiles and geothermal – largest supplier of turbines GCF Executive Director Howard Bamsey travelled to Japan in his first official overseas visit 9

GCF Private Sector Facility (PSF) Role To fund and mobilize institutional investors with GCF funds to encourage the private sector to invest Approach Catalyze private sector funding A special focus on LDCs, SIDS and African states Long term funding through financial instruments and structure-in concessionality Access to the Private Sector Say a word about the private sector facility Why was it created? Recognition that addressing the climate change challenge at scale will require mainstreaming climate action into the day-to-day business of the private sector Variety of ways to do it Develop the tools to help them integrate climate risk into their business models Provide debt of varying forms to incentivize private sector actors – long-term, liquidity, or refinancing Equity to take early stage risks, and guarantees to cover specific risks How can private sector access? Integrated into the Fund using the same operational modalities Bring forward proposals through any of the accredited entities with the ability to undertake private sector operations Accredited Entities with private sector capacity Present funding proposals or responsd to calls for proposals 10

PSF Business Model Country Ownership Accredited Entity 11 Project

Portfolio Composition as of B19 Private Sector Committed amount of GCF funding (17 approved projects) $4.66 billion $1.51 billion 12 Loan 61% Equity 30% Guarantee 2% USD 1.51B

Private Sector Projects as of B19 Name Country AE GCF Amount Total Amount B11 KawiSafi Ventures Fund in Eastern Africa Kenya, Rwanda Acumen $25 M $110 M Energy Efficiency Green Bond in LAC Mexico IDB $22 M $780 M B13 Climate Action and Solar Energy Development Chile CAF $49 M $265 M B14 Sustainable Energy Financing Facilities (SEFF) Africa/ Asia / EE (10) EBRD $378 M $1,419 M Sustainable Landscapes in Eastern Madagascar Madagascar CI/EIB $54 M $70 M Universal Green Energy Access Programme (UGEAP) Africa (5 countries) DB $80 M $300 M B15 Business loan programme for GHG emission reduction Mongolia XacBank $20 M $60 M SCF Capital Solutions South Africa DBSA $12 M $34 M Catalyzing Private Investment in Sustainable Energy in Arg. Argentina $133 M $653 M B16 Geeref NeXt Global (29 countries) EIB $765 M Egypt Renewable Energy Financing Framework Egypt $154 M $1,007 M B18 Renewable Energy Program – Solar #1 $9 M $18 M GCF-EBRD Kazakhstan ReFramework Kazakhstan $557 M Low Emissions and Climate Resilient Agriculture Risk Sharing Mexico, Guatemala $158 M B19 Acumen Resilient Agriculture Fund (ARAF) Ghana, Nigeria, Uganda $26 M $56 M Zambia Renewable Energy Financing Framework Zambia AfDB $52.5 M Line of Credit for Solar rooftop segment India NABARD $100 M $250 M $1.5 B $6.7 B Total 13

Request for Proposals Mobilizing Funds at Scale Published on Closed on 25 May 2017. Closed on 30 August 2017 Short-list Announced December 2017 Top 30 Short-listed GCF INVESTMENT: Up to USD 500M in projects/programmes COUNTRIES RECEIVED: 70+ Developing countries NUMBER OF CONCEPT NOTES RECEIVED: 350 CNs EST. PROJECT COST: USD 43 billion EST GCF REQUESTED FINANCING: USD 18 Billion

Private Sector Projects Egypt Renewable Energy Financing Framework Country GCF financing Accredited entity Financial instrument Egypt USD 154.7 million EBRD Loan and Grant USD 150M in loan and USD 4.7M in grant: Encourage private sector investment in an environment where currently there is negligible renewable capacity installed To remove the bottlenecks to the lack of financing for the development of private sector renewable energy projects Emissions reduction of 18.9 million tCO2e 15

Private Sector Projects Renewable Energy Program – Solar #1 Country GCF financing Accredited entity Financial instrument Mongolia USD 8.65 million XacBank Loan USD 8.65M in loan To unlock renewable energy investments in Mongolia and mobilize private sector capital To help Mongolia to achieve its nationally determined contribution (NDC) targets The project is expected to be a precursor to the Asia Super Grid initiative Emissions reduction of 0.30 million tCO2e 16

Multiple Countries - Global Private Sector Projects GEEREF NeXt Countries GCF financing Accredited entity Financial instrument Multiple Countries - Global USD 265 million EIB Equity and Grant USD 250M in equity and USD 15M in grant: fund of funds with the aim of being the first investor in RE/EE investment funds Significant climate impact due to the elevated multiplier effect Channeling institutional investors into renewable energy and energy efficiency investments in developing countries Emissions reduction of 769 million tCO2e 17

Japanese Board Member: Mr. Tsukada (MOFA) The Green Climate Fund Japanese Board Member: Mr. Tsukada (MOFA) Board members and their constituencies: Paul Oquist, Co-chair (LAC) Lennart Båge, Co-chair (developed countries, Sweden) Karma Tshering (LDCs) Tamaki Tsukada (developing countries, MOFA, Japan) Omar El-Arini (Africa) Ayman M. Shasly (APAC) Ali’ioaiga Feturi Elisaia (SIDS) Hans Olav Ibrekk (developed countries, Norway) Satu Santala (developed countries, Switzerland) Judith Gelbman (developed countries, Canada) Josceline Wheatley (developed countries, UK) Geoffrey Okamoto (developed countries, USA) Tosi Mpanu Mpanu (Africa) Teimuraz Murgulia (Georgia) Cyril Rousseau (developed countries, France) Karsten Sach (developed countries, Germany) M. M. Kutty (APAC) Zaheer Fakir (developing countries, South Africa) Esther González Sanz (developed countries, Spain) Ewen McDonald (developed countries, Australia) Roelof Buffinga (developed countries, Denmark) Yang Weifeng (APAC) 18

Contacts Tony Clamp Urvaksh D. Patel Juichiro Sahara Deputy Director Private Sector Facility privatesector@gcfund.org Urvaksh D. Patel Specialist – International Financial Institutions Division of Country Programming info@gcfund.org Juichiro Sahara Resource Mobilization Senior Specialist Division of Support Services

Annex

Portfolio Composition 76 projects/programmes with USD 3 Portfolio Composition 76 projects/programmes with USD 3.7 billion in GCF funding Requested and committed amount of GCF funding Status as of B19 (Feb 2018) 21

GCF Projects Under Implementation Total Disbursed: USD 147.2M Projects under-implementation Co-financing $1,275 million GCF funding $596 million GCF + Co-financing = Total USD 1,871 million Projects composition Public sector (15) Private sector (3) 22

Six Investment Criteria Against which proposals are assessed Impact potential Paradigm shift potential Sustainable development potential Country ownership Efficiency & effectiveness Responsive to needs of recipients Potential to contribute to achievement of Fund's objectives and result areas Long-term impact beyond a one-off investment Wider economic, environmental, social (gender) co-benefits Country ownership and capacity to implement (policies, climate strategies and institutions) Economic and, if appropriate, financial soundness, as well as cost-effectiveness and co-financing for mitigation Vulnerability and financing needs of beneficiary in targeted group 23

Project implementation Country Programming – an Iterative Process Country programme Entity programme Pipeline development Funding proposals Project implementation Results & learning

Fit-for-Purpose Accreditation Fiduciary functions Mandate & track record Basic Specialized Alignment with Fund objectives At least 3 year of operations Project size Environment & social risk category Micro ( <10M) Small (10-50M) Medium (50-250M) Large ( >250M) A (high) B (medium) C (minimal or no)

Applying for Accreditation The accreditation application will include the following sections: Background and contact information of the applicant entity Information on the ways in which the institution and its intended projects/programmes will contribute to furthering the country’s climate strategies and action plans, in line with GCF’s objectives Information on the scope of intended projects/programmes and estimated contribution requested for an individual project or activity within a programme Basic fiduciary criteria Applicable specialized fiduciary criteria Environmental and social safeguards (ESS) Gender What you need to apply* Nomination by your NDA(s) or focal point(s) (for subnational, national and regional entities applying under direct access) Intended projects/programmes (for information purposes) Evidence of how your organization can meet the GCF’s fiduciary standards, ESS and gender policy Track record, which should include climate change-related projects/programmes and the fiduciary, environmental and social practices applied * This list is not exhaustive.

Accreditation Process Steps 1.) Pre-accreditation 2.) Accreditation 1A 1B 2A 2B NDA/FP nomination* received OAS account issued Application received and accreditation fees paid Stage II (Step 2) Board decision Stage III Legal arrangements Stage I Completeness check Stage II (Step 1) AP Review OAS request received 2E 2D 2C AMA negotiation AMA execution AMA effectiveness AMA: Accreditation Master Agreement AP: Accreditation Panel NDA: National Designated Authority OAS: Online Accreditation System *An NDA nomination letter is required for Direct Access entities only. Nomination is not required for International Access entities.

Technical Advisory Panel Project Approval Process Legal arrangements Accredited Entity Secretariat GCF Board Concept note (optional) Generation of Project idea Submission of funding proposal No-objection Analysis and recommendation Board Decision NDA Technical Advisory Panel Trustee 1 6 2 3 Possible request for Readiness support by NDA Possible support from Project Preparation Facility to AE 4 5