CF Assist World Bank’s Capacity Building Program CF Assist World Bank’s Capacity Building Program Host Country Committee Meeting Cologne, Germany May 2006

Carbon Finance at WB Ensure CF contributes substantially to sustainable development, beyond global environmental efforts; Ensure CF contributes substantially to sustainable development, beyond global environmental efforts; Assist in building, sustaining, and expanding the international markets for emission reductions, and its institutional and administrative structure; Assist in building, sustaining, and expanding the international markets for emission reductions, and its institutional and administrative structure; Strengthen the capacity of developing countries to benefit from the emerging market for emission reduction credits Strengthen the capacity of developing countries to benefit from the emerging market for emission reduction credits

Carbon Finance Portfolio $1.6 billion

CF Projects by Region

Carbon Finance Assist Multi-donor Trust Fund complementing WB’s CF Business Multi-donor Trust Fund complementing WB’s CF Business Proposed in 2004, established in 2005 Proposed in 2004, established in 2005 Managed by Carbon Finance Unit; Training activities by World Bank Institute Managed by Carbon Finance Unit; Training activities by World Bank Institute Activities are need-based at country/regional level Activities are need-based at country/regional level Africa Assist program with French support Africa Assist program with French support Review and advice by Host Country Committee on CF, and Donor Group Review and advice by Host Country Committee on CF, and Donor Group

Objectives of CF-Assist Ensure that Developing Countries and Economies in Transition are able to fully participate in the flexible mechanisms defined under KP Ensure that Developing Countries and Economies in Transition are able to fully participate in the flexible mechanisms defined under KP Build human and infrastructural capacityBuild human and infrastructural capacity Benefit from SD gains associated with carbon mitigation projectsBenefit from SD gains associated with carbon mitigation projects Create and manage carbon assetsCreate and manage carbon assets Reduce costs of participationReduce costs of participation

CF-Assist Funding Sources for CF-Assist CF Unit Direct Donor Contributio ns ‘ PLUS ’ TA Funds PHRDPartner s Australia Denmark France Spain Switzerland PCF+ DCF CFU Interest Earning Technical Assistance and Capacity Building Knowledge Sharing

CF-Assist Resource Envelop (m$) Spain6.000 Denmark0.425 Switzerland0.720 Australia1.315 France (MEDD) France (AFD)* PCF Plus DCF Interest Total PHRD Grants GIS1.000 CF-SEA1.000 Financial resources actually received in December 2005

CF- Assist Capacity Enhancement Market Development Outreach Training Portfolio Development Institutional Strengthening Carbon Expo GHG Forums Financial Sector Intermediati on Annual Market Assessmen t Lessons Learnt CF-Assist Work Components

CF-Assist Priority Countries Sri Lanka, Pakistan Argentina, Bolivia, Brazil, Central America, Mexico, Peru, Uruguay Cameroon, Ghana, Madagascar, Mali, Mozambique, Senegal, South Africa, Uganda, Zambia Cambodia, China, Indonesia, Philippines Bulgaria, Latvia, Russian Federation, Ukraine Egypt, Morocco, Tunisia

Country Programs Phased Approach Phased Approach Phase 1: Bank ExecutionPhase 1: Bank Execution Phase 2: Recipient and/or Bank ExecutionPhase 2: Recipient and/or Bank Execution Phase 3: Recipient ExecutionPhase 3: Recipient Execution Activity Focus Activity Focus CDM GovernanceCDM Governance Private Sector EngagementPrivate Sector Engagement Project DevelopmentProject Development Knowledge ManagementKnowledge Management

CDM Governance Phase 1 Phase 2 Phase 3 DNA established with criteria, procedures and timeline for approval Supportive policy and regulatory frameworks for CF projects developed Procedures refined/ validated by objective, external evaluation

Private Sector Engagement Phase 1 Phase 2 Phase 3 Key experts in financial sector / industry trained on design of CF projects Financial institutions trained in synergies of CF with lending/ grant instruments CF fully integrated in investment promotion strategies / concessional lending decisions

Project Development Phase 1 Phase 2 Phase 3 Key sectors identified and potential ERs quantified; information widely disseminated; At least one PDD has been completed At least one project validated/ registered and marketed to buyers One industry association or intermediary fully engaged in CF (signed an agreement) Existence of a dynamic deal flow Participation at Carbon Expo Intermediaries/ project developers access the carbon market JI countries: First Track participation; Establishment of GIS, traded volume Continued participation at Carbon Expo

Knowledge Management Phase 1 Phase 2 Phase 3 Private sector and public sector agencies are fully aware of the CDM/JI potential and have put systems in place to assess projects at their institutions Knowledge sustained through distance learning/ web-based instruments; National and regional networks of experts cultivated South-South knowledge transfer; National/regional community of practitioners

Progress in

Country Programs TORs for TA negotiated and agreed for 9 priority countries TORs for TA negotiated and agreed for 9 priority countries Argentina, Cambodia, China, Indonesia, Madagascar, Morocco, Mexico, Philippines, Sri LankaArgentina, Cambodia, China, Indonesia, Madagascar, Morocco, Mexico, Philippines, Sri Lanka Negotiations underway for 4 countries Negotiations underway for 4 countries Egypt, Peru, Tunisia, UruguayEgypt, Peru, Tunisia, Uruguay Procedures instituted for the first recipient- executed program in Mexico Procedures instituted for the first recipient- executed program in Mexico Argentine Carbon Facility launched Argentine Carbon Facility launched Training programs conducted in 11 Countries Training programs conducted in 11 Countries

Regional Programs Africa Assist Africa Assist AFD contribution; PHRD grants; CF-SEA TAAFD contribution; PHRD grants; CF-SEA TA Recognition of special needs and characteristicsRecognition of special needs and characteristics Announced in March 2005Announced in March 2005 Central America Central America Guatemala, El Salvador, HondurasGuatemala, El Salvador, Honduras Caucasus Caucasus Azerbaijan, GeorgiaAzerbaijan, Georgia

Training Programs Country No. of Participants Azerbaijan51 Cameroon17 El Salvador 77 India (6) 1110 Indonesia211 Mali30 Mexico66 Pakistan111 Sri Lanka 83 Zambia (2) 84

Leveraging Resources PHRD Grants - $5.5m PHRD Grants - $5.5m Bolivia, Brazil, China, Indonesia, Mozambique, Pakistan, Senegal, South Africa, Russian Federation, Uganda and UkraineBolivia, Brazil, China, Indonesia, Mozambique, Pakistan, Senegal, South Africa, Russian Federation, Uganda and Ukraine CF-SEA - $1.0m CF-SEA - $1.0m Zambia, Mozambique, Mali, Ghana, and CameroonZambia, Mozambique, Mali, Ghana, and Cameroon GIS Studies - $1.0m GIS Studies - $1.0m Bulgaria, Latvia, UkraineBulgaria, Latvia, Ukraine

Market Facilitation Global Carbon Expo 2005 Global Carbon Expo 2005 Over 1500 participants from 87 countriesOver 1500 participants from 87 countries 150 journalists150 journalists 134 Exhibitors from 50 countries134 Exhibitors from 50 countries 29 high level representatives29 high level representatives More than 100 projects offeredMore than 100 projects offered

GHG Forums Delhi Regional GHG Forum Delhi Regional GHG Forum Annual event along with DSDSAnnual event along with DSDS 150 participants150 participants Moscow Regional GHG Forum Moscow Regional GHG Forum First one in April 2006First one in April participants250 participants

Transportation Program RFP issued in April 2006 RFP issued in April 2006 Objectives Objectives to enhance opportunities for transport sector by developing methodologies for distinctive types of projects, which can be replicated;to enhance opportunities for transport sector by developing methodologies for distinctive types of projects, which can be replicated; to document lessons learnt, including barriers encountered and means by which barriers were overcome; andto document lessons learnt, including barriers encountered and means by which barriers were overcome; and to disseminate the lessons learnt and facilitate dialogue amongst experts to further CDM transportation projects.to disseminate the lessons learnt and facilitate dialogue amongst experts to further CDM transportation projects.

Market Assessment Annual Market Analysis Report Annual Market Analysis Report Released at Carbon ExpoReleased at Carbon Expo Rapid Response Facility Rapid Response Facility Training workshops in Azerbaijan, Georgia and PakistanTraining workshops in Azerbaijan, Georgia and Pakistan Collaboration with UNDP Collaboration with UNDP Training of UNDP staffTraining of UNDP staff Joint CDM projectsJoint CDM projects

Outreach Training of Bank Staff Training of Bank Staff Energy WeekEnergy Week 7 internal training programs (incl. MIGA)7 internal training programs (incl. MIGA) HCC Meeting HCC Meeting 54 member countries54 member countries Donors Meeting Donors Meeting

Partners IETA (Expo, GHGF) IETA (Expo, GHGF) Koelnmesse (EXPO) Koelnmesse (EXPO) UNEP, Riso Center (CF-SEA) UNEP, Riso Center (CF-SEA) CEFEB (Francophone Africa) CEFEB (Francophone Africa) In-country partners (20) In-country partners (20)

Program Impacts

Stakeholder Participation Event Participation (4100 People) Expo 30% COP 8% GHG Forum 11% Training 51% Africa 21% Latin America 7% Europe/ Central Asia 4% East Asia 5% South Asia 63% Training Participation (2000 people)

Institutions Supported Cambodia: Support to DNA and other stakeholders to develop capacity building activities and identify potential CF projects Cambodia: Support to DNA and other stakeholders to develop capacity building activities and identify potential CF projects Sri Lanka: Support to DNA help develop project approval procedures Sri Lanka: Support to DNA help develop project approval procedures Russia: Workshop to help the DNA understand legal aspects of developing projects and processing procedures Russia: Workshop to help the DNA understand legal aspects of developing projects and processing procedures Argentina: Supporting ACF Argentina: Supporting ACF Africa Assist: DNAs supported in capacity building in Senegal, South Africa and Uganda utilizing the PHRD grants Africa Assist: DNAs supported in capacity building in Senegal, South Africa and Uganda utilizing the PHRD grants

Project Portfolios Participation of 25 host country delegations at Carbon Expo 2005 resulted in over 100 projects being presented for deal negotiations Participation of 25 host country delegations at Carbon Expo 2005 resulted in over 100 projects being presented for deal negotiations PHRD grants supported development of project portfolios in Senegal, South Africa and Uganda PHRD grants supported development of project portfolios in Senegal, South Africa and Uganda CF-SEA program supported up to 10 PINs per country in Cameroon, Ghana, Mali, Mozambique and Zambia CF-SEA program supported up to 10 PINs per country in Cameroon, Ghana, Mali, Mozambique and Zambia

Work Program

New Management Structure CF-Assist responsibility transferred to World Bank Institute from 1 July, 2006 CF-Assist responsibility transferred to World Bank Institute from 1 July, 2006 Carbon Finance Unit will continue to provide technical and operational support Carbon Finance Unit will continue to provide technical and operational support Program implementation mainly through WB regional teams Program implementation mainly through WB regional teams

CF-Assist Structure WBI External Partners CFURegions Donors HCC

Continued Commitments Country Programs Country Programs ArgentinaArgentina BoliviaBolivia MexicoMexico PeruPeru UruguayUruguay PhilippinesPhilippines Sri LankaSri Lanka CambodiaCambodia ChinaChina IndonesiaIndonesia Regional Programs Regional Programs Africa AssistAfrica Assist Central AmericaCentral America Market Facilitation Market Facilitation Carbon Expo, CologneCarbon Expo, Cologne Asia Carbon Expo, BeijingAsia Carbon Expo, Beijing Latin America Carbon Forum, Buenos AiresLatin America Carbon Forum, Buenos Aires

Regional Expansion Ensuring equitable distribution across regions Ensuring equitable distribution across regions Sub-Saharan AfricaSub-Saharan Africa North AfricaNorth Africa Middle EastMiddle East Eastern EuropeEastern Europe Central AsiaCentral Asia

Possible New Activities Countries Countries AzerbaijanAzerbaijan BangladeshBangladesh BelarusBelarus BotswanaBotswana Burkina FasoBurkina Faso GeorgiaGeorgia LatviaLatvia PakistanPakistan Russian FederationRussian Federation Sectors Sectors Biomass at HH levelBiomass at HH level Energy EfficiencyEnergy Efficiency Afforestation/ ReforestationAfforestation/ Reforestation Avoided DeforestationAvoided Deforestation

Expected Outcomes Activity Expansion to all regions10 countries Phase II 05 countries new 30 countries complete Phase II Africa AssistRegional/sector assessments; 06 countries in Phase II 12 countries in Phase II; 03 intermediaries in CF business Innovative ToolsCountry Funds operational in Argentina, Mexico In-country experts have full access to all instruments (country funds, auctioning, etc.) to secure ERPAs GIS offered in Bulgaria, Ukraine

Expected Outcomes Activity Expand CF to new sectors Assessment in transport completed; at least 03 PDDs offered to market Action plan implemented to remove barriers in transport sector; assessment completed in other sectors (EE, biomass, etc.) Capacity Building at country level At least 03 intermediaries in each CF-A countries Programs increasingly recipient-executed Disseminate lessons through global/ regional events Carbon Expo in Cologne; Asian Carbon Expo, Beijing; Latin America Carbon Forum, Argentina; GHG Forums Carbon Expo becomes self-sustaining; Other forums become regular events

Lessons Learnt Project Development Closing window of opportunity in the short run Need for institutional structures to be in place Access to mainstream financing High Demand for Capacity Building Limited delivering capacity - need for strategic prioritization of countries Need to focus on country-specific capacity requirements linked to potential Need for Market Continuity Adapt KM activities to the changing landscape of the market and focus on long term sustainability of the market Leverage Other Capacity Building Programs

Thank you!