1. The European Bank for Reconstruction and Development: Regional Leader in its Countries of Operations
Founded in 1991 after the disintegration of the Soviet Union, EBRD’s region of operations cover most countries in Eastern Europe, Central Asia and, since 2008, Turkey
Private sector here is broadly defined

2. The European Bank for Reconstruction and Development: Investments in the Times of Crisis
As an Multilateral Development Bank, EBRD brings in additional financial capital and technical assistance (TA) to economically viable sustainable development projects
Since 1991, invested almost € 50 billion in 3,000 projects
Private sector > 77% of portfolio
Debt 80%, Equity 20% of portfolio
€ 8 billion invested in 2009
Portfolio expansion for 2010
50% capital Increase in 2010
Annual Business Volume (ABV, billion €)
Cumulative Business Volume (billion €)
Private sector here is broadly defined 2

3. The European Bank for Reconstruction and Development: Modus Operandi
$1, Project value $100,000,000+
Financing Facilities
Direct Lending Facilities
Direct Lending
Technical Assistance
Financing Facilities through partner financial institutions – individual clients, small size projects and SMEs; up to $ 5 million loans ($ 20 million project value)
Direct Lending Facilities – limited recourse, mid-sized projects, flexible approval procedure; up to $ 15 million investments ($ 50 million project value)
Direct Investment – loans and equity investment; investments above $ 15 million for overall project value of $50 million+
Technical Assistance (e.g. energy audits, financial advisory services, project preparation and implementation, policy dialogue) – applicable to any sector and project size
Private sector here is broadly defined 3

4. Mobilising Private Sector Investment for Climate Finance - Rationale
The private sector is key to delivering sustained volumes of financing for energy efficiency and renewables. Mobilising it through concessional co-finance ensures that:
leverage of scarce GEF resources is maximised (through reflows of income generated and additional EBRD as well as other partners’ investment)
GEF activities support investments in the low-carbon economy and to mainstream climate resilience measures in the project cycle / project development
There will be clear benefits in the local capacity for sustainable energy policy-making and regulation, thus creating a positive - virtuous circle whereby a favourable policy environment will lead to further low-carbon investments
The Private Sector here is broadly defined. Private sector investments is meant to be MDBs investments in the private sector through private intermediaries (such as banks) and direct loans to private operators. The background to this slide (and all in all the rationale for GEF Secretariat to organise a side event specific to private sector engagement) is that GEF would like to scale up its engagement with the private sector by channelling resources through MDBs in two main ways: 1) through the ‘traditional’ GEF grant allocation, where substantial grant contributions are used by EBRD / MDB to finance TA and / or for the provision of investments grants, which will lead to a much bigger EBRD investments (also together with private partners), thus substantially leveraging public resources; 2) through the Earth Fund, where a reflow mechanism is sought, whereby EBRD would use the resources for concessional finance, regularly returning the income generated to the Earth Fund Trustee. This model is currently being used for the Clean Technology Fund.
Private sector here is broadly defined

5. EBRD and the EARTH FUND EBRD working on two main proposals:
Regional Industrial Energy Efficiency Facility to enable low-carbon growth by:
supporting equipment replacement;
introducing competitive pressures towards low-carbon product manufacturing.
Proposed Financing Instrument: EBRD loans (80%) with Earth Fund / Donor loans on concessional terms;
Regional Clean-Tech Fund to support local banks in investing in clean energy lending:
Tiered fund model;
Earth Fund to invest with EBRD, other donors and investors.
For the Regional Industrial Energy Efficiency Facility:
Target Sector: Industry
Coverage: EBRD region except EU-9 countries
Implementation: Direct lending
Investment Period: 2-3 years from Board approval
Facility Amount[1][2]: US$ million
Concessional Funding: 20% on terms similar to CTF private sector, either as concessional loans or capital grants of equivalent NPV;
Up to 2% grant for project-linked TC through the Energy Audit Programme
Repayment of concessional funds: 10 years, 5 years grace
Bank Funding: 80% on market terms
Bank Repayment terms: project-specific
Total investment volume[3]: US$ m
Environmental Impact
Projects supported would be ordinary industrial projects which will include an investment amount of at least 20% of the EBRD financing volume (including the concessional funding) for energy efficiency technologies related to tooling/equipment and/or management systems, which would have to qualify for inclusion in the SEI. The equipment/systems financed by the concessional element will have to be at least BAT standard in the region, and should aim for introducing BAT elements from OECD countries. Environmental benefits would be derived in two ways (and in each specific case a combination of the two is most likely):
on the project level, by reducing process emissions from the replacement of obsolete and inefficient equipment; and
on the sectoral/economy level by introducing competitive pressures into manufacturing leading to an overall lower-carbon development path for the economy as a whole.
[1] excluding project equity/syndication
[2] depends on availability of concessional co-finance, likely to be at the lower end at the start.
[3] including project equity/syndication
Private sector here is broadly defined

6. Current EBRD GEF Project Activities
Industrial Energy Efficiency
Medium-Sized Renewables
Energy Efficiency in the Built Environment
Residential Buildings (through public investment)
Public Buildings
Introducing adaptation measures in water management (first application under the Special Climate Change Fund)
All Projects: see enclosed notes
On Public buildings, only the TC component has gone through so far; the project could possibly be implemented through private-sector ESCOs.
Private sector here is broadly defined

7. Industrial Energy Efficiency
Substantial programme to support industrial clients through TA funded energy audits
EBRD UNIDO programme funded by GEF under preparation in Russia ($15m)
Capacity building for federal and regional government (Energy Agency)
Training and support to large industrials and SMEs on energy management and energy efficiency technologies
Investment support through EBRD direct lending and credit lines (RUSEFF)
Private sector here is broadly defined

8. Renewables Support
This consists of a combination of regulatory and investment support for smaller renewable energy projects in our countries of operations
EBRD Renewables Direct Lending Facility in Ukraine: €50m EBRD financing, €20m CTF and €30m equity
$8.45m GEF grant for TA to support Ukraine in:
Further development of the regulatory framework
Assistance to developers in preparing commercial arrangements for projects
Environmental assessments
Private sector here is broadly defined

9. Residential Buildings Programme
Objective
Address 1960s era apartment blocks (Khrushevki)
Close co-operation with central government agencies and local governments to undertake energetic refurbishment
Project Preparation
Capacity building for regional/municipal governments
Best practice training for improved regulation
GEF funding for work in Russia (with IFC). Other donors covering Ukraine
Provide finance
Combine public finance and EBRD finance through a range of instruments – credit lines, direct lending to municipalities or housing associations
Similar programmes are delivered by EBRD using private banks in Slovakia, Bulgaria, Georgia with EU (Slovakia/Bulgaria) and private sector (Georgia) support
GEF funded programme underway in Russia with IFC ($9 million)
Khrushevki: this is the name of the apartment types.
Private sector here is broadly defined