Zhihong Zhang Senior Program Officer June 10, 2011

Additional investment needs in developing countries, by 2030 Mitigation $139—175 billion Adaptation $75—100 billion Financing Needs to Deal with Climate Change … to catalyze sustainable investments..enhance capacity & policy … leverage other sources of finance Climate finance covers additional costs and serves to.. “Baseline” Private & Public Investment Source: World Bank,

Financial Flows for Climate Action in Developing Countries Source: Atteridge et al. (2009). Bilateral Finance Institutions and Climate Change: A Mapping of Climate Portfolios, Stockholm Environment Institute. 3

A growing menu of climate finance instruments Adaptation Adaptation Fund Special Climate Change Fund Global Facility for Disaster Reduction & Recovery Least Developed Country Fund Mitigation Clean Technology Fund Carbon Funds Carbon Partnership Facility Forest Carbon Partnership Facility Global Environment Facility Trust Fund Pilot Program for Climate Resilience Global Environment Facility Trust Fund Risk Instruments 4 Forest Investment Program Scaling Up RE Program for Low Income Countries

Climate Investment Funds 5 Clean Technology Fund (CTF): Finances demonstration, deployment, and transfer of low carbon technologies Total commitment: $4.3 billion Strategic Climate Fund (SCF): Targeted programs to pilot new approaches and scale-up: Total commitment: $1.9 billion Approved in July 2008 as an interim instrument, CIF have balanced governance with equal representation from developed and developing countries

Structure 6 Clean Technology Fund Finance scaled-up demonstration, deployment and transfer of low carbon technologies Strategic Climate Fund Targeted programs with dedicated funding to pilot new approaches with potential for scaling up Pilot Program for Climate Resilience Mainstream climate resilience into core development planning Forest Investment Program Reduce emissions from deforestation and forest degradation Scaling Up Renewable Energy in Low Income Countries Initiate transformational change by use of renewable energy $1.9 billion Investment Plans $4.3 billion Support country and regional development strategies Leverage financial products of Multilateral Development Banks Stimulate private sector engagement

Design and Operating Principles 7 Partnership among Multilateral Development Banks (AfDB, ADB, EBRD, IDB, and WBG) to support mitigation and adaptation in a coherent and integrated way Multi-stakeholder with balanced governance Demonstrate scale and transformation Leverage public and private sector Complementarity with other partners at the country level Sunset clause Pledges to date US$ million eq. Australia137 Canada96 Denmark24 France274 Germany741 Japan1,190 Netherlands73 Norway177 Spain108 Sweden83 Switzerland20 United Kingdom1,212 United States2,000 Total$6.1 billion *exchange rates as of March 31, 2010

Clean Technology Fund (CTF) 8 Influence countries’ low carbon development strategies; Promote market transformation through policy reforms, economies of scale, enhanced competition and private sector participation, and eventually savings in unit abatement costs; and/or, Realize broader employment, business/industrial growth, environmental and social co-benefits that contribute to sustainable development. Purpose ― To finance programs and projects for demonstration, deployment and transfer of low carbon technologies with significant potential for GHG emissions savings Scale ― $4.3 billion in concessional financing to help countries buy down costs of public and private sector investments in low carbon development Governance ― Trust Fund Committee: Australia, Brazil, China, Egypt, France, Germany, India, Japan, Morocco, Nigeria, South Africa, Spain, Sweden, Turkey, UK, and US Observers: 4 civil society and 2 private sector, GEF, UNDP, UNEP, and UNFCCC Measuring Success

Clean Technology Fund (CTF) Module 1 9 Accessing the CTF ODA eligible with active MDB country program Investment plan embedded in national development plan Investment Criteria Potential for GHG Emissions Savings Cost-effectiveness Demonstration Potential at Scale Development Impact Implementation Potential Additional Costs and Risk Premium Endorsed Investment Plans under implementation Colombia, Egypt, Indonesia, Kazakhstan, Mexico, Morocco, Philippines, South Africa, Thailand, Turkey, Ukraine, Vietnam, Regional (Algeria, Egypt, Jordan, Morocco, Tunisia) Other Investment Plans Nigeria, Chile, India

CTF Investment Plans CTF Investment Plans Endorsed as of March 31, 2010 Country CTF (US$ million) Private Sector Co-Financing (US$ million) Other Co- Financing* (US$ million) Est. Total (US$ million) Leverage Ratio (CTF to other sources of financing) Leverage Ratio (CTF funding/ Private Sector) Colombia1501,0601,5962,8061:181:7 Egypt ,9211:51:2 Indonesia4001,1001,6103,1101:71:3 Kazakhstan ,2691:51:3 MENA CSP7501,2903,5645,6041:71:2 Mexico5002,3183,3796,1971:111:5 Morocco ,0001,9501:121:5 Philippines2501,1001,4302,7801:101:4 South Africa ,3102,3501:41:1 Thailand3001,3802,5834,2631:131:5 Turkey ,6802,1001:71:1 Ukraine ,0252,6051:61:1 Viet Nam2501,0102,1853,4451:131:4 TOTAL4,35012, 16923,85040,369Avg. 1:8Avg. 1:3 *Other sources of financing include MDBs, bilaterals, governments, other agencies such as the GEF and CCIG

Strategic Climate Fund (SCF) 11 Measuring Success Success is measured specific to targeted SCF programs Purpose ― To provide experience and lessons through scaled-up, learning-by-doing programs in sectoral areas or by piloting new approaches to low carbon development and climate change Scale ― $1.9 billion+ through a range of financing: grants, loans, credits, guarantees, and other support Governance ― Trust Fund Committee: Australia/UK, Bolivia, Canada, Denmark/Switzerland, Kyrgyz Republic, Germany, Guyana, Indonesia, Japan, Maldives, Netherlands, Norway, Senegal, Tunisia, USA, Yemen + observers (4 civil society, 2 Indigenous Peoples, 2 private sector), GEF, UNDP, UNEP and UNFCCC

SCF: Pilot Program for Climate Resilience (PPCR) 12 Measuring Success Increased capacity to integrate climate resilience into development Increased awareness of vulnerabilities and potential impacts Scaled-up investments for broader interventions and programming Improved coordination among stakeholders Purpose ― To help highly vulnerable countries pilot and demonstrate ways to integrate climate risk and resilience into core development planning while complementing other ongoing activities. Scale ― $945 million in pledges, mainly grants with option to augment with IDA-like resources Governance ― Sub-Committee: Australia/UK, Bangladesh, Canada, Denmark/Norway, Germany, Jamaica, Japan, Samoa, Tajikistan, USA, Yemen, Zambia, the Adaptation Fund Board + observers (4 civil society, 2 indigenous peoples, 2 private sector, 1 rep. of community dependent on adaptation approaches), GEF, UNDP, UNEP, UNFCCC Pilot Countries Bangladesh, Bolivia, Cambodia, Mozambique, Nepal, Niger, Tajikistan, Yemen, Zambia -- 2 regional programs in Caribbean (Haiti, Jamaica and OECS countries) and South Pacific (Tonga, Samoa, PNG).

SCF: Forest Investment Program (FIP) 13 Measuring Success Effective REDD+ programs Conservation or enhancement of existing carbon reservoirs Effectively address drivers of deforestation and degradation Effectively address economic benefits and incentive systems Purpose ― To support countries’ efforts to reduce emissions from deforestation and forest degradation (REDD+) by financing efforts to address the drivers of deforestation. REDD+ includes reducing emission from deforestation and forest degradation, conservation, sustainable management of forests and enhancement of carbon stocks. Scale ― $542 million in initial pledges Governance ― Sub-Committee: Australia, Brazil, Democratic Republic of Congo, Denmark, Indonesia, Japan, Morocco, Nepal, Norway, Romania, UK, and US; observers (2 civil society, 2 private sector and 2 indigenous peoples representatives), FCPF, GEF, UNFCCC, UN-REDD

SCF: Scaling Up Renewable Energy Program in Low Income Countries (SREP) 14 Measuring Success Remove barriers to renewable energy Lead to replication of renewable energy investments Increase installed renewable energy capacity in a country’s energy supply Purpose ― To pilot and demonstrate the economic, social and environmental viability of low carbon development pathways in the energy sector by creating new economic opportunities and increasing energy access through the use of renewable energy Scale ― $334 million in pledges for programs of capacity building and investments in renewable energy Governance ― Sub-Committee: Armenia, Bangladesh, Japan, Netherlands, Nicaragua, Norway, Solomon Islands, Switzerland, Tanzania, United Kingdom, United States, Yemen Observers: 4 civil society, 2 Indigenous Peoples, 2 private sector, Energy for the Poor Initiative, GEF, UNDP, UNEP, UNFCCC

For More Information 15 ClimateInvestmentFunds.org