Clean Technology Fund Rohit Khanna The World Bank July 2009

1 Discussion Outline  CTF Objectives  Financing Terms  Investment Criteria  Operations To-Date

2 Clean Technology Fund Objectives  CTF is a multi-donor trust fund with pledges of US$ 5 billion  Governed by Trust Fund Committee, with equal representation of donor and eligible recipient countries: (Australia, Brazil, China, Egypt, France, Germany, India, Japan, Mexico, Morocco, South Africa, Spain, Sweden, Turkey, UK and US)  Provides incentives for scaled-up deployment and transfer of low carbon technologies with significant potential for greenhouse gas emissions savings  Offers concessional resources to co-finance MDB loans, utilizing a range of financing, credit enhancement, and risk management tools  More Background 

3 Clean Technology Fund Financing Terms  Financing terms depend on nature of the project  CTF resources can also be deployed as loan guarantees and contingent finance  Strong role for private sector and the emphasis on building domestic investments  Leverage is expected and CTF funding is blended with sponsoring Multilateral Development Bank  Expected leverage ratio: no strict criteria, but at least +5:1 for total investment cost  In Egypt, Mexico & Turkey: CTF is 10-15% of investment

4 Clean Technology Fund Investment Plans  Business Plans of the Multilateral Development Banks to assist countries with CTF co- financing in implementing their national development strategies and plans with low carbon objectives  Investment Plans are agreed between, and owned by, the governments and MDBs  The CTF Trust Fund Committee will review the Investment Plan: endorse the CTF resource envelope and authorize designated MDBs to proceed with project preparation  Subsequently, individual projects prior to appraisal are circulated to the Trust Fund Committee for approval of CTF funding  Further processing of projects follows standard MDB procedures

5 Clean Technology Fund Investment Criteria  Power sector  Modal shifts in transportation  Large-scale adoption of energy efficient technologies in buildings and industry  The CTF uses the following criteria to assess and prioritize proposed programs and projects:  Potential for GHG Emissions Savings  Cost-Effectiveness  Demonstration Potential at Scale  Development Impact  Implementation Potential  Additional Cost and Risk Premium

CTF Investment Plans Egypt  Wind Scale up wind power from 1000 MW to 2500 MW Supports national goal of 12% of electricity from wind by 2020 (7500 MW)  Urban Transport 6 Bus Rapid Transit corridors 5 new Light Rail links Replacement of old mini-buses with large-capacity, efficient buses Part of $17 billion Greater Cairo Urban Transport Master Plan

CTF Investment Plans Mexico  Urban Transport 20 Bus Rapid Transit corridors with low carbon bus technologies Part of national BRT program to achieve ridership share of 30% and reduce transport carbon footprint by 20% by 2030  Lighting and Appliances Efficiency Replacement of 1 million mercury vapor lamps with high-pressure sodium vapor lamps in municipal street lighting Improvements in 6 million lighting devices in commercial and public buildings Substitution of 72 million incandescent bulbs with flourescent lamps in low income households Replacement of 1.6 million refrigerators and 250,000 air-conditioners older than 10 years Lighting and appliances representing 15-30% of Mexican market share.

CTF Investment Plans Turkey  Renewable energy and energy efficiency Promoting private sector development through credit lines to local development banks Increasing investor confidence and developing new financing business models Objective of doubling lending of financial institutions for RE and EE  Smart Grid: Implementing “intelligent” grid management and control systems to support large-scale integration of wind energy resources into the grid as part of government goal of scaling up wind capacity to 20,000 MW by 2020