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ADB Commends Initiatives of Government of India for combating Climate Change

ADB's Support for Combating Climate Change with Financing and Strategic Incentives Naoki Sakai, Energy Specialist, Climate Change Focal Point, South Asia Department, Asian Development Bank 4 February 2009. ADB Commends Initiatives of Government of India for combating Climate Change.

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ADB Commends Initiatives of Government of India for combating Climate Change

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  1. ADB's Support for Combating Climate Change with Financing and Strategic IncentivesNaoki Sakai, Energy Specialist, Climate Change Focal Point, South Asia Department, Asian Development Bank 4 February 2009

  2. ADB Commends Initiatives of Government of India for combating Climate Change • National Action Plan on Climate Change (NAPCC) is a comprehensive, world-leading initiative • ADB expects GOI to continue to lead the world-wide discussion on climate change • Because Climate Change can affect on Poverty in Asia

  3. Vulnerability of Key Sectors to the Impacts of Climate Change by Sub-regions in Asia Source: National Institute for Environmental Studies (Japan)

  4. Projected Impacts on South Asia Changes in rainfall patterns, melting glaciers Increased risk of floods and intense bursts. Special impact on large parts of the Indian sub-continent and over quarter of a billion people in China Increase in sea levels • South and East Asia could lose 15% of their land area. Small island states in the Indian and Pacific Oceans are acutely threatened Impact on agriculture • Strong impact on Western Asia, where yields of the predominant crops may fall by 15–35% once temperatures reach 3–4 C Reduction in GDP and living standards • India and S.E. Asia could lose some percentile of GDP by 2100 Source: Stern Review

  5. Climate Change: A Development Challenge The consequences of climate change adversely affect not only the natural environment but people’s health, safety and livelihoods as well The poorest people in the poorest countries will suffer earliest and most severely These negative impacts can potentially stall future growth and undermine recent economic gains, including progress achieved in meeting the Millennium Development Goals

  6. Role of Asian Development Bankin Climate Change Financing ADB is a sole Multi-lateral Development Bank in Asia Facing the current world-wide financial crisis, ADB’s role become more important to provide Public Financing with competitive interest rate and experiences to formulate PPP ADB is not a representative from any single country. Thus, ADB will keep a neutral position on Post-Kyoto Negotiation. All the ADB’s financing supports including concessional financing and grant facility does not require receipient countries to make any obligation and obligation.

  7. ADB’s Strategy 2020 ADB’s Long-term Strategic Framework (2008-2020) Inclusive Economic Growth Environmentally Sustainable Growth Aims to Scale Up Support for Projects, e.g., Renewable Energy Development

  8. Financing Thrusts:Mitigation and Adaptation Help make climate change mitigation and adaptation actions more competitive and affordable to Develoing Member Countries through: Mobilizing additional concessional resources Catalyzing private sector capital Maximizing the use of market-based mechanisms (e.g. carbon and insurance markets)

  9. ADB’s Climate Change Program • Mobilize • Concessional • Resources • Catalyze • Private • Capital • Maximize • Market • Mechanisms Financing Tools Advance Energy Efficiency and Low-Carbon Energy Sources Enable Sustainable Transport Policy and Application of Efficient Systems Mitigation “Thrusts” Promote Improved Urban Sanitation and Reduction of Fugitive Methane Emissions Promote Sustainable Land Use and Forestry Incorporate Vulnerability Risks into National Development Strategies Increase Climate Resilience of Vulnerable Sectors Adaptation “Thrusts” “Climate Proof” Projects Address Social Dimensions

  10. Crucial need for large deployment programs to bridge the gap between R&D and commercialization of clean energy technologies Role for development banks Demonstration Deployment Deployment Competitive Energy Efficiency InitiativeCore Focus Stages of Technology Development R&D Source: IEA Energy Technology Perspectives 2006

  11. Concessional Financing Facilities • To help make mitigation and adaptation actions for climate change affordable and more competitive, we recently established additional financing schemes to mobilize concessional funds, catalyze private sector capital, and maximize the use of market mechanisms.

  12. Concessional Financing Facilities • ADB’s Clean Energy Financing Partnership Facility (CEFPF) uses grants and concessional financing to help start projects that are small but can be replicated. • ADB has also established on a grant basis a $40 million Climate Change Fund sourced from ADB's net income.

  13. Climate Change Fund - CCF • CCF was established to facilitate greater investments in DMCs to effectively address the causes and consequences of climate change alongside ADB’s own assistance in various related sectors. The CCF will invest in projects that lead to GHG emission reductions. http://www.adb.org/Clean-Energy/funds-partnerships.asp

  14. Clean Energy Financing Partnership Facility CEFPF • CEFPF was developed by the Energy Efficiency Initiative to promote energy security and a transition to low-carbon economies through cost-effective investments, especially in technologies that result in greenhouse gas mitigation. • The CEFPF comprises a multi-donor Clean Energy Fund (CEF) supported by the governments of Australia, Norway, Spain and Sweden, as well as an individual donor Asia Clean Energy Fund (ACEF) supported by the government of Japan. Overall target: $250 million.

  15. Carbon Market Development • ADB’s Carbon Market Initiative provides upfront financing and technical support for mitigation projects. • ADB also established the Future Carbon Fund to enable clean energy project developers to gain benefits even for post-2012 GHG reductions. This will encourage more investments now in energy efficiency and renewable energy.

  16. Carbon Market Initiative: 3 Components

  17. Standard “Pay-on-Delivery” ADB’s Carbon Market Initiative 1. Funds 1. Tech Asst 2. Carbon Credits 2. Payment 1. Carbon Credits Commercial Operation Development Turning Cash Flow into Financing Financing Cash Flow Project phase: Year: 01234567

  18. Way Forward • Identification and development of Climate Change related projects with these concessional financing facilities. • Further consultation with private sectors and structuring optimal PPP models where ADB can provide competitive lending, grant, equity. • Support project developers for application of CDM and post CDM. • Mobilizing larger size of concessional financial resources in consultation with the Government of India

  19. Thank you!

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