Partnering with the Green Climate Fund (GCF) Andreas Lunding Senior Structured Finance Specialist Private Sector Facility, Green Climate Fund Stockholm, 31 January 2018

Introduction to GCF The Green Climate Fund (GCF) is a new global fund created to support the efforts of developing countries to respond to the challenge of climate change. GCF was set up in 2010 by the 194 country parties to the UNFCCC in 2010, as part of the Convention’s financial mechanism. Supported by USD 10 billion in pledges, the Fund works with public and private sectors to promote a paradigm shift to low- emission and climate-resilient development. GCF’s activities are aligned with the priorities of developing countries through the principle of country ownership. Our innovation is to use public investment to stimulate private finance through the Fund’s dedicated Private Sector Facility.

Risk appetite to unlock ideas GCF’s Private Sector Value Proposition We understand the value of investing in climate finance in developing countries. We aim to have a 50:50 balance in our portfolio between mitigation and adaptation investments over time. We engage institutional investors, local banks/FIs and corporates to co-invest with GCF in projects. We offer strategic, long-term funding through various instruments and can structure in concessionality to achieve results. We can take on climate-related risk in order to address barriers to private sector climate finance flows. Dedicated funding resources for country Readiness support and Project Preparation. Country driven Climate impact focus Paradigm shift Public+ private Risk appetite to unlock ideas

GCF Works with the Most Climate-Vulnerable Countries Developing countries are amongst the most climate- vulnerable and typically have limited incumbent adaptive capacity and investment capabilities. GCF’s mandate specifically targets developing countries to work with these on a transition towards low carbon and climate resilient development pathways. This includes a specific focus to work with LDCs, SIDS, and African states to increase their climate adaptation and resilience, with a min. 50% of overall GCF portfolio in adaptation directed to these countries. Source: WorldRiskReport 2016

Environmental & social safeguards GCF’s Accreditation Framework GCF works through a network of Accredited Entities (AEs) to channel resources to projects. AEs comprise private and public, non-governmental, sub-national, national, regional or international entities. Accreditation is a fit-for-purpose due diligence process ensuring our partners share the same objectives as GCF, and that they have extensive experience and a strong financial and managerial infrastructure. Mandate & track record Project size Alignment with GCF’s objectives At least three years of operations Micro (<USD 10M) Small (USD 10-50 M) Medium (USD 50-250M) Large (>USD 250M) Fiduciary functions Basic Specialized Project management Grant award On-lending/blending (loans, equity, guarantees) Environmental & social safeguards A/I-1 (potential high impact) B/I-2 (medium impact) C/I-3 (minimal or no impact)

59 entities accredited to date A Diverse Network of Partners We work with a growing range of leading investors and changemakers within global climate finance. Antigua & Barbuda China Fiji Morocco Namibia Morocco Bangladesh Senegal China Korea India Argentina Rwanda India Kenya Indonesia Bangladesh Mongolia Ethiopia Peru South Africa 59 entities accredited to date

GCF Investment Framework 6 Investment criteria Impact potential (vs. GCF impact areas) Paradigm shift potential (replicable/scalable) Sustainable development potential (co-benefits) Needs of the recipient (target population) Country ownership (country climate targets/policies) Efficiency and effectiveness (cost of emissions reduction, private sector mobilization/leverage) 8 Strategic Impact Areas GCF policies Environmental and social safeguards Gender policy Non-objection letters Results management and reporting Legal/Risk – risk-sharing structures where relevant Implementation capacity of AE/executing entity Private sector: minimum concessionality / minimizing market distortions

GCF’s Portfolio TOTAL FUNDING AMOUNT GEOGRAPHICAL DISTRIBUTION TOTAL GCF PORTFOLIO (54 projects): USD 2.65bn - OF WHICH PRIVATE SECTOR (PSF) (14 projects): USD 1.33bn GEOGRAPHICAL DISTRIBUTION Status as of January 2018

GCF’s Private Sector Facility (PSF) PSF is a dedicated facility within GCF with the mission to: Facilitate Board investment in catalytic mitigation and adaptation projects and programmes that mobilize private sector funds Enable private climate finance in developing markets De-risk investments Bundle small projects into larger portfolios to achieve scale Support capacity building Develop public-private climate-resilient infrastructure GCF provides concessional debt, equity, guarantees, and grants through a range of financing structures (project-based, funds, structured finance vehicles etc.) Encourage innovation

Addressing Barriers to Private Sector Finance Access to climate finance and local market Policy & regulatory Limited market capabilities Limited range of financial instruments Demand-supply mismatch Appropriate strategic and regulatory framework Consistent policy support and incentive systems 02 01 03 Affordability & technology High technology and upfront costs High cost of capital Access to technology 05 Region & country related Different barriers across regions and countries 04 Knowledge & education Lack of awareness and training Local financial institutions’ lack of capacity

Multiple Countries - Global GCF 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 Innovative fund-of-funds vehicle with the aim of being the first investor in renewables/EE investment funds in target countries Investee funds will provide early/growth equity capital to strong renewables/EE companies in developing markets Channeling institutional investors into renewable energy and energy efficiency investments in developing countries Significant climate impact due to the elevated multiplier effect Emissions reduction of 769 million tCO2e

GCF Private Sector Projects Sustainable Landscapes in Eastern Madagascar Country GCF financing Accredited entity Financial instrument Madagascar USD 53.5 million CI/EIB Equity and Grant USD 35M in equity and USD 18.5M in grant Holistic approach to sustainable landscape measures to enhance resilience of smallholder farmers and channel private finance into climate-smart investments in agriculture and renewable energy. Innovative Public-Private project involving the European Investment Bank (EIB) and Conservation International (CI). Aimed at overcoming barriers to private sector investment through issuance of a pioneering Climate Bond with all profits re-invested to capitalize a Climate Change Trust Fund for Madagascar. Emissions reduction of 10.0 million tCO2e.

RFP: Mobilizing Funds at Scale GCF INVESTMENT: Up to USD 500M in projects/programmes Published on 25 May 2017. Closed on 30 August 2017. COUNTRIES RECEIVED: 70+ Developing countries NUMBER OF CONCEPT NOTES RECEIVED: 350 CNs EST GCF REQUESTED FINANCING: USD 18 Billion EST. PROJECT COST: USD 43 billion SHORTLISTED CNs : 30

How Can You Work With Us? Seek Accreditation. Entities seeking funding from GCF can apply to become an Accredited Entity (AE). Partner with an Accredited Entity. Another option is to work in partnership with an existing AE as an Executing Entity to seek GCF funding. RFPs. GCF also issues Requests for Proposals aimed at addressing specific (private sector) financing gaps – and these may be open to entities who are not yet accredited. Co-financing. More broadly, GCF seeks to maximize co- financing for its projects (especially from the private sector). GCF projects offer opportunities for private sector investors to participate in transformative climate finance investments across developing countries that are underpinned by GCF’s value proposition (concessional finance, project support etc.)

REACH OUT EMAIL: privatesector@gcfund.org Andreas Lunding Senior Structured Finance Specialist GCF, Private Sector Facility Email: alunding@gcfund.org WEBSITE: Greenclimate.fund

Appendix: Approved GCF Private Sector Projects Board Project/Programme Country AE GCF Amount (USD M) Total Amount (USD M) Theme B11 KawiSafi Ventures Fund in Eastern Africa Kenya and Rwanda Acumen 25.0 110.0 Cross-cutting Energy Efficiency Green Bond in LAC Mexico IDB 22.0 780.0 Mitigation B13 Climate Action and Solar Energy Development Programme in the Tarapacá Region in Chile Chile CAF 49.0 265.0 B14 Sustainable Energy Financing Facilities (SEFF) Africa/ Asia / EE (10 countries) EBRD 378.0 1,419.0 Sustainable Landscapes in Eastern Madagascar Madagascar CI/EIB 53.5 69.8 Universal Green Energy Access Programme (UGEAP) Benin, Kenya, Namibia, Nigeria, and Tanzania DB 80.0 300 B15 Business loan programme for GHG emission reduction Mongolia XacBank 20.0 60.0 SCF Capital Solutions South Africa DBSA 12.2 34.2 Catalyzing Private Investment in Sustainable Energy in Argentina Argentina 133.0 653.0 B16 Geeref NeXt Global (29 countries) EIB 765.0 GCF-EBRD Egypt Renewable Energy Financing Framework Egypt 154.0 1,007.0 B18 Renewable Energy Program – Solar #1 8.6 17. 6 GCF-EBRD Kazakhstan ReFramework Kazakhstan 557.0 Low Emissions and Climate Resilient Agriculture Risk Sharing Facility Mexico and Guatemala 158.0