f i n a n c i n g d e v e l o p m e n t s u s t a i n a b l e Association of Development Financing Institutions in Asia and the Pacific Role of Financial Institutions for Climate Change and Business Opportunity: Public Private Financial Partnership “Alliance of Development Financing Institutions for Climate Finance” Nihal Fonseka CEO, DFCC Bank Chairman, ADFIAP ADFIAP/JBIC Joint Program on Environmental Cooperation Framework Siem Reap, November 17, 2010

AGENDA AGENDA ADFIAP’s Mission & Focused Areas The Business Case for Climate Finance ADFIAP & DFIs in Action – Case Studies Concluding Remarks ADFIAP/JBIC Joint Program on Environmental Cooperation Framework Siem Reap, November 17, 2010

ADFIAP’s Mission & Focus Areas Economic Social Environment Governance Financial Inclusion Social Housing Education & Health MSMEs Trade Agriculture Industry Technology Infrastructure Services Climate change Environment finance CDM Carbon finance Others Corporate Governance Institutional Integrity “Financing Sustainable Development”

The Business Case for Climate Finance Climate change effects on financial institutions As early as 2006, a report analysing greenhouse gas emissions of the 500 world’s largest publicly-traded companies found that businesses will not be immune to the predicted changes and may experience disturbance to their operations and profitability. ADFIAP/JBIC Joint Program on Environmental Cooperation Framework Siem Reap, November 17, 2010

The Business Case for Climate Finance Climate change effects on financial institutions it makes good business sense for financial institutions to start accounting for their own greenhouse gas emissions, according to a report issued by the World Resources Institute. The benefits include: - identifying reduction & subsequent money-saving opportunities; - cutting the company’s regulatory risks that may result from more stringent regional, national, or international efforts to curb global warming; and - enhancing reputational status in the eyes of the consumers. ADFIAP/JBIC Joint Program on Environmental Cooperation Framework Siem Reap, November 17, 2010

The Business Case for Climate Finance Direct financial gains cost savings (in energy/water use, paper, etc.) cost-consciousness among employees lower future compliance costs Reputational / Image benefits attract & retain customers attract & retain good employees better recognition in society & public in general Work place benefits proper facility management accident-free environment healthier working environment Environmental / Ecological Gains clean environmental services & access to natural resources ADFIAP/JBIC Joint Program on Environmental Cooperation Framework Siem Reap, November 17, 2010

The Environmental Governance Project Starting from within: The Environmental Governance Project The issue of environmental governance has been and will always be in the forefront of ADFIAP’s activities. ADFIAP’s “Greening of DFIs” Project is its collective and responsive effort to pursue sustainable development through its adherence to the principles of a safe and clean environment, not only as part of good corporate citizenship, but more importantly, as an integral part of sound business practice. - ADFIAP Board of Directors About 300 CEOs and senior staff were involved in the project in ADFIAP regional, sub-regional and national meetings & conferences; A new ADFIAP publication, Greenbank, was developed and produced for dissemination to members and other networks; and An Environmental Category has since been included in the annual ADFIAP Awards program for outstanding achievements of member banks. ADFIAP/JBIC Joint Program on Environmental Cooperation Framework Siem Reap, November 17, 2010

The “Greening of DFIs” Project Starting from within: The “Greening of DFIs” Project Sustainability Report Water Financing Carbon Offset Certificate Green Banking Book Launch Project Partners ADFIAP/JBIC Joint Program on Environmental Cooperation Framework Siem Reap, November 17, 2010

Renewable Energy for Rural Economic Development (RERED) Project To expand the commercial provision and utilization of renewable energy resources and improve the quality of life in rural areas in Sri Lanka. Cumulative Approvals & Disbursements of Credit under RERED & RERED-Additional Financing as at 30 Sept ADFIAP/JBIC Joint Program on Environmental Cooperation Framework Siem Reap, November 17, 2010

DBP Forest DBP Forest: Greening the countryside by planting high-yielding fruit trees, reducing GHG emissions Clean Development MechanismCDM Clean Development Mechanism* (CDM): The CDM is an arrangement under the Kyoto Protocol which allows industrialized countries with a greenhouse gas reduction commitment to invest in initiatives that lessen emissions in developing countries as an alternative to more costly emission reduction measures. Environmental Development ProjectEDP Environmental Development Project* (EDP) Local government units, water districts, private corporations and private water service providers can access long-term funds through DBP and its participating financial institutions to mobilize, encourage, and support activities and investments in environment-friendly projects. * With the Japan Bank for International Cooperation (JBIC) ADFIAP/JBIC Joint Program on Environmental Cooperation Framework Siem Reap, November 17, 2010

The Green Technology Financing Scheme The Green Technology Financing Scheme (GTFS) – to promote investments in green technology, a sector that is envisaged to be one of Malaysia’s emerging drivers of economic growth. For products, equipment, or systems which: minimizes degradation of the environment has zero or low green house gas (GHG) emission safe for use and promotes healthy and improved environment for all forms of life; conserves the use of energy and natural resources; or promotes the use of renewable resources. ADFIAP/JBIC Joint Program on Environmental Cooperation Framework Siem Reap, November 17, 2010

SME Development Bank of Thailand SME Development Bank of Thailand – provides loans for hire-purchase of natural gas vehicles Bank of Khyber Bank of Khyber – assists small entrepreneurs to finance purchase of /conversion to natural gas auto rickshaw Lankaputhra Development Bank Lankaputhra Development Bank – to open avenues for small farmers to move towards new technology, techniques and market opportunities Land Bank of the Philippines Land Bank of the Philippines – provides financing for bio-fuel projects sourced from a kind of plant called jatropha curcas Bank of Maharastra Bank of Maharastra – provides loans for adoption of renewable energy practices and use of solar home systems Green Finance of other ADFIAP Members: A Sampling ADFIAP/JBIC Joint Program on Environmental Cooperation Framework Siem Reap, November 17, 2010

Concluding Remarks Concluding Remarks Excerpts from ADFIAP’s Policy Statement on Climate Change “As an international community of development finance institutions, ADFIAP takes a long view of the importance and impact of the climate change issue, as this is not only a global phenomenon as it is local; an institutional concern as it is personal. Climate change and its effects is the responsibility of all to tackle now and in the future.” “As development organizations, DFIs have a natural mandate and catalytic role to play in climate change initiatives. To deal with climate change, it is necessary to work at two levels: to seek for the reduction in greenhouse gas emissions and to be fully engaged in global efforts to stem the rate of climate change.” As financial intermediaries, DFIs are in a strategic position to help mitigate climate change’s impact, not only as a source of funds of projects that may contribute to the degradation of the environment but also as an advocate of it to project proponents themselves in the course of doing their businesses. These actions also need to be coordinated with programs to address other urgent priorities, such as reducing poverty, improving education and public health, investing in water and sanitation projects, and raising general living standards. Reliable, renewable and affordable supplies of energy are also essential in meeting these challenges. ADFIAP/JBIC Joint Program on Environmental Cooperation Framework Siem Reap, November 17, 2010 * Approved by the ADFIAP Board in 2007 in Hanoi, Vietnam.

Thank you for your attention! ADFIAP/JBIC Joint Program on Environmental Cooperation Framework Siem Reap, November 17, 2010 Let’s all help save our Earth!