“Alliance of Development Financing Institutions for Climate Finance” Nihal Fonseka CEO, DFCC Bank

1. Role of Financial Institutions for Climate Change and Business Opportunity: Public Private Financial Partnership “Alliance of Development Financing Institutions for Climate Finance” Nihal Fonseka CEO, DFCC Bank Chairman, ADFIAP ADFIAP/JBIC Joint Program on Environmental Cooperation Framework Siem Reap, November 17, 2010

2. ADFIAP’s Mission & Focused Areas The Business Case for Climate Finance ADFIAP & DFIs in Action – Case Studies Concluding Remarks AGENDA ADFIAP/JBIC Joint Program on Environmental Cooperation Framework Siem Reap, November 17, 2010

3. ADFIAP’s Mission & Focus Areas “Financing Sustainable Development” • MSMEs • Trade • Agriculture • Industry • Technology • Infrastructure • Services • Financial Inclusion • Social Housing • Education & Health Economic Social Governance • Climate change • Environment finance • CDM • Carbon finance • Others • Corporate Governance • Institutional Integrity Environment

4. Climate change effects on financial institutions As early as 2006, a report analysing greenhouse gas emissions of the 500 world’s largest publicly-traded companies found that businesses will not be immune to the predicted changesand may experience disturbance to their operations and profitability. The Business Case for Climate Finance ADFIAP/JBIC Joint Program on Environmental Cooperation Framework Siem Reap, November 17, 2010

5. Climate change effects on financial institutions it makes good business sense for financial institutions to start accounting for their own greenhouse gas emissions, according to a report issued by the World Resources Institute. The benefits include: - identifying reduction & subsequent money-saving opportunities; - cutting the company’s regulatory risks that may result from more stringent regional, national, or international efforts to curb global warming; and - enhancing reputational status in the eyes of the consumers. The Business Case for Climate Finance ADFIAP/JBIC Joint Program on Environmental Cooperation Framework Siem Reap, November 17, 2010

6. The Business Case for Climate Finance • Direct financial gains • cost savings (in energy/water use, paper, etc.) • cost-consciousness among employees • lower future compliance costs • Reputational / Image benefits • attract & retain customers • attract & retain good employees • better recognition in society & public in general • Work place benefits • proper facility management • accident-free environment • healthier working environment • Environmental / Ecological Gains • clean environmental services & access to natural resources ADFIAP/JBIC Joint Program on Environmental Cooperation Framework Siem Reap, November 17, 2010

7. Starting from within:The Environmental Governance Projectwww.egs-asia.com The issue of environmental governance has been and will always be in the forefront of ADFIAP’s activities. ADFIAP’s “Greening of DFIs” Project is its collective and responsive effort to pursue sustainable development through its adherence to the principles of a safe and clean environment, not only as part of good corporate citizenship, but more importantly, as an integral part of sound business practice. - ADFIAP Board of Directors • About 300 CEOs and senior staff were involved in the project in ADFIAP regional, sub-regional and national meetings & conferences; • A new ADFIAP publication, Greenbank, was developed and produced for dissemination to members and other networks; and • An Environmental Category has since been included in the annual ADFIAP Awards program for outstanding achievements of member banks. ADFIAP/JBIC Joint Program on Environmental Cooperation Framework Siem Reap, November 17, 2010

8. Starting from within:The “Greening of DFIs” Project Water Financing Carbon Offset Certificate Sustainability Report Green Banking Book Launch Project Partners ADFIAP/JBIC Joint Program on Environmental Cooperation Framework Siem Reap, November 17, 2010

9. Renewable Energy for Rural Economic Development (RERED) Project To expand the commercial provision and utilization of renewable energy resources and improve the quality of life in rural areas in Sri Lanka. www.dfccbank.com Cumulative Approvals & Disbursements of Credit under RERED & RERED-Additional Financing as at 30 Sept. 2008 ADFIAP/JBIC Joint Program on Environmental Cooperation Framework Siem Reap, November 17, 2010

10. www.devbankphil.com.ph • DBP Forest:Greening the countryside by planting high-yielding fruit trees, reducing GHG emissions • Clean Development Mechanism*(CDM): • The CDM is an arrangement under the Kyoto Protocol which allows industrialized countries with a greenhouse gas reduction commitment to invest in initiatives that lessen emissions in developing countries as an alternative to more costly emission reduction measures. • Environmental Development Project* (EDP) • Local government units, water districts, private corporations and private water service providers can access long-term funds through DBP and its participating financial institutions to mobilize, encourage, and support activities and investments in environment-friendly projects. • * With the Japan Bank for International Cooperation (JBIC) ADFIAP/JBIC Joint Program on Environmental Cooperation Framework Siem Reap, November 17, 2010

11. The Green Technology Financing Scheme(GTFS) – to promote investments in green technology, a sector that is envisaged to be one of Malaysia’s emerging drivers of economic growth. • For products, equipment, or systems which: • minimizes degradation of the environment • has zero or low green house gas (GHG) emission • safe for use and promotes healthy and improved environment for all forms of life; • conserves the use of energy and natural resources; or • promotes the use of renewable resources. ADFIAP/JBIC Joint Program on Environmental Cooperation Framework Siem Reap, November 17, 2010

12. Green Finance of other ADFIAP Members: A Sampling • SME Development Bank of Thailand – provides loans for hire-purchase of natural gas vehicles • Bank of Khyber – assists small entrepreneurs to finance purchase of /conversion to natural gas auto rickshaw • Lankaputhra Development Bank– to open avenues for small farmers to move towards new technology, techniques and market opportunities • Land Bank of the Philippines – provides financing for bio-fuel projects sourced from a kind of plant called jatropha curcas • Bank of Maharastra – provides loans for adoption of renewable energy practices and use of solar home systems ADFIAP/JBIC Joint Program on Environmental Cooperation Framework Siem Reap, November 17, 2010

13. “As an international community of development finance institutions, ADFIAP takes a long view of the importance and impact of the climate change issue, as this is not only a global phenomenon as it is local; an institutional concern as it is personal. Climate change and its effects is the responsibility of all to tackle now and in the future.” “As development organizations, DFIs have a natural mandate and catalytic role to play in climate change initiatives. To deal with climate change, it is necessary to work at two levels: to seek for the reduction in greenhouse gas emissions and to be fully engaged in global efforts to stem the rate of climate change.” As financial intermediaries, DFIs are in a strategic position to help mitigate climate change’s impact, not only as a source of funds of projects that may contribute to the degradation of the environment but also as an advocate of it to project proponents themselves in the course of doing their businesses. These actions also need to be coordinated with programs to address other urgent priorities, such as reducing poverty, improving education and public health, investing in water and sanitation projects, and raising general living standards. Reliable, renewable and affordable supplies of energy are also essential in meeting these challenges. Concluding RemarksExcerpts from ADFIAP’s Policy Statement on Climate Change * Approved by the ADFIAP Board in 2007 in Hanoi, Vietnam. ADFIAP/JBIC Joint Program on Environmental Cooperation Framework Siem Reap, November 17, 2010

14. Thank you for your attention! Let’s all help save our Earth! www.adfiap.org ADFIAP/JBIC Joint Program on Environmental Cooperation Framework Siem Reap, November 17, 2010