Zhihong Zhang Senior Program Officer June 10, 2011

1. Zhihong Zhang Senior Program Officer June 10, 2011

2. Financing Needs to Deal with Climate Change Additional investment needs in developing countries, by 2030 Climate finance covers additional costs and serves to.. Mitigation $139—175 billion “Baseline” Private & Public Investment Adaptation $75—100 billion … to catalyze sustainable investments ..enhance capacity & policy … leverage other sources of finance Source: World Bank, 2010

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

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

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

6. Structure Clean Technology Fund Strategic Climate Fund Finance scaled-up demonstration, deployment and transfer of low carbon technologies Targeted programs with dedicated funding to pilot new approaches with potential for scaling up Investment Plans 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 CountriesInitiate transformational change by use of renewable energy • Support country and regional development strategies • Leverage financial products of Multilateral Development Banks • Stimulate private sector engagement $4.3billion $1.9billion

7. Design and Operating Principles • 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 *exchange rates as of March 31, 2010

8. Clean Technology Fund (CTF) 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 • 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.

9. Clean Technology Fund (CTF) 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 • 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 Module 1

10. CTF Investment Plans CTF Investment Plans Endorsed as of March 31, 2010

11. Strategic Climate Fund (SCF) • 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 Measuring Success Success is measured specific to targeted SCF programs

12. SCF: Pilot Program for Climate Resilience (PPCR) 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). 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

13. SCF: Forest Investment Program (FIP) 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 • 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

14. SCF: Scaling Up Renewable Energy Program in Low Income Countries (SREP) 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 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

15. For More Information ClimateInvestmentFunds.org