1. Catalyzing Private Sector Investment in Climate-smart agriculture Katalin Solymosi Structured and Corporate Finance Department katalins@iadb.org

2. Layers of the cake - steps to using donor finance to bring in private capital Private sector investment IDB loans Donor concessional finance Donor grant funding to demonstrate feasibility Sustainable investment policies Catalyzing investment with public funds 2 1.Work with governments to establish and identify investment environments with economically viable opportunities 2. Provide detailed engineering analysis to demonstrate financial viability and/or investment grants for pilot projects 3. Provide donor concessional finance to overcome cost and risk barriers 4. Provide long-term market rate finance 5. Actively market and deliver private sector investment

3. Private Sector Windows of IDB 3 Non-Sovereign Guaranteed Operations Structured and Corporate Finance Department (SCF) Inter-American Investment Corporation (IIC) Opportunities for the Majority Initiative (OMJ) Multilateral Investment Fund (MIF)

4. IDB Private Sector- Structured and Corporate Finance Department Our Clients  Corporations, financial institutions, and state- owned entities without a sovereign guarantee Our Products and Services  Loans  Project Finance and Public Private Partnerships  Guarantees  Climate change concessional finance  Market studies, climate risk assessments, feasibility analyses Our investments  Renewables and energy efficiency – solar, wind, biomass, hydro, biofuels  Climate-smart land use: adaptation and mitigation  Direct to corporations and “green lines” and SME financing via financial intermediaries 4

5. Project examples Adaptation in the coffee sector  Coffee trader in Central America acts as financial intermediary to channel loans to producers GEF-IDB climate-smart agriculture fund  New fund to support smaller size operations  Initial focus on 3 investment areas:  Carbon restoration on degraded lands  Sustainable certification  Water management  Currently originating eligible projects Clean energy in agricultural value chains  Energy efficiency  Small scale self-supply clean energy 5

6. 6 Tools for catalyzing climate investment  Information barriers – Lack of knowledge/confidence in savings and productivity predictions – Projects require $20 to $200K in analysis to prove feasibility  Lack of finance – High collateral requirements from banks – Long grace and repayment periods regarded as risky  High transaction costs – Project finance is costly and risky – MRV requirements by donors  Resource risk Barriers we are seeking to address How we do it: Concessional finance from the Canadian Climate Fund, GEF and others Grants for technical assistance: audits, feasibility studies, climate risk assessments Financial institution training to explore sustainable commodity markets Energy Efficiency Finance Facility for small ($500K - $5M) loans to ag processors and others

7. Our deal is with the future. katalins@iadb.org