Promoting private sector actions in the fight against climate change ...

Promoting private sector

actions in the fight against climate change

in Belgium and abroad

PART A – International Climate Finance

Final Report

Contract details

Federal Public Service (FPS) Health, Food Chain Safety and Environment

Bestek nr. DG5/CC/LUD/14014 - Promoting private sector actions in the fight against climate change in

Belgium and abroad

Presented by

Trinomics B.V.

Westersingel 32a

3014 GS, Rotterdam

The Netherlands

Contact main author(s)

Jeroen van der Laan ([email protected])

Elske Veenstra ([email protected])

Hans Bolscher ([email protected])

Koen Rademaekers ([email protected])

Date

Rotterdam, 23 December 2015

Disclaimer

The information and views set out in this report are those of the author(s) and do not necessarily

reflect the official opinion of the Federal Public Service (FPS) Health, Food Chain Safety and

Environment. The FSP does not guarantee the accuracy of the data included in this study. Neither the

FSP nor any person acting on the FSP’s behalf may be held responsible for the use which may be made

of the information contained therein

Promoting private sector actions in the fight against climate change in Belgium and abroad

Rotterdam, 23 December 2015

Client: Federal Public Service (FPS) Health, Food Chain Safety and Environment

Reference: Bestek nr. DG5/CC/LUD/14014 - Promoting private sector

actions in the fight against climate change in Belgium and abroad

Jeroen van der Laan Elske Veenstra Hans Bolscher

Koen Rademaekers


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Abstract This report presents the results of a study on Belgium’s international climate finance, carried out in the

context of the pledge of industrialised countries to jointly mobilise USD 100 billion per year by 2020, to

support mitigation and adaptation actions in developing countries. It consists of the following

components: 1) the methodological framework that was developed in collaboration with the Steering

Committee on tracking and measuring private climate finance mobilised by Belgium; 2) an overview of

actors in Belgium that are relevant to the mobilisation of private climate finance to developing

countries; and 3) a quantitative assessment of Belgium’s public climate finance and mobilised private

climate finance for the years 2013-2014. The report gives recommendations and lessons learned in

relation to the methodology, data collection process, and the results.


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Executive Summary In accordance with decisions under the United Nations Framework Convention on Climate Change

(UNFCCC) Conference of Parties (COP) in Copenhagen and Cancún, industrialised countries have

committed to jointly mobilise USD 100 billion per year by 2020 to support mitigation and adaptation

actions in developing countries1. This pledge comprises scaled-up, new and additional, predictable and

adequate funding from a wide variety of sources: public and private, bilateral and multilateral,

including innovative sources. Recently, in the context of the Paris package agreed at COP21, developed

country Parties emphasized their commitment to respect their Copenhagen pledge and committed to

continue providing support to developing countries in their climate mitigation and adaptation efforts by

continuing to mobilise USD 100 billion per year from 2020 to 2025. By 2025, countries will then set a

new collective quantified goal for climate finance for at least USD 100 billion per year.

In 2015, the OECD, in collaboration with the Climate Policy Initiative (CPI), published ‘Climate Finance

in 2013-14 and the USD 100 billion goal’, which provides an estimate of the public and private climate

finance mobilised by developed countries towards their UNFCCC 2010 Cancún commitment, for climate

action in developing countries in 2013 and 2014. The report estimates that USD 62 billion of public and

private finance were mobilised in 2014, up from USD 52 billion in 2013, making an average of USD 57

billion per year over the 2013-2014 period.

This study was commissioned to shed light on the Belgian contribution to the international pledge,

by providing evidence-based results, outputs, analysis and insights on the private sources of climate

(mitigation and adaptation) investments made in developing countries mobilised by Belgium2. The

study also aims to better understand the (rather complex) methodological issues that are involved

in these calculations and discuss the implications of each of the options for the methodological

choices. The report also identifies and describes the landscape of the (main) international climate

finance providers in Belgium and assesses the private climate finance flows that were mobilised by

Belgian public interventions in 2013 and 2014. The study builds on the methodological work developed

by the OECD-led Research Collaborative on Tracking Private Climate Finance.

Methodology to calculate the levels of private climate finance mobilised

The methodological choices underlying any estimates of mobilised private climate finance flows are

important as they can have a substantial impact on the total outcome. The most important choices that

have to be made concern:

• Which projects and what part of these projects are considered as ‘climate finance’;

• How are the different financial instruments (grants, loans, guarantees, etc.) valued;

• How are the amounts attributed to the different actors, as actors (public and private) from many

origins (Annex 1 and non-Annex 1) are involved in financing projects.

1 This means that all substantial investments in mitigation (renewable energy production, energy efficiency measures, etc.) and adaptation (coastal protection, changing weather impact on agriculture, etc.), as well as the related ‘softer’ interventions such as technical assistance, are collectively called ‘climate finance’. 2 The mobilisation of private climate finance means that a Belgian public intervention (e.g. policy framework, concessional loans, grants, etc.) has ‘triggered’ investments from the private sector in climate-relevant activities and/or projects in developing countries.


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There is currently no internationally agreed methodology for measuring and reporting mobilised private

climate finance. The OECD Research Collaborative on Tracking Private Climate Finance has developed a

four-stage decision framework for developing a methodology3 and very recently most OECD countries

have, based on this decision framework, adopted a common understanding of a methodological

framework as a basis for going forward4. Figure 1 presents an overview of the four-stage framework and

all methodological decisions, as decided by the Steering Committee of public Belgian climate finance

providers, that was established and used in the context of this pilot study. This methodology closely

follows the OECD common understanding. Stage 1 of the framework defines the core concepts. This

entails definitions of climate finance, and what can be considered as mobilised private climate finance.

In Stage 2 of the framework, decisions need to be made on what kind of public interventions are taken

into account when calculating private climate finance mobilisation. Stages 3 and 4 of the framework,

which are the more technical stages, set the framework for the quantification exercise. Stage 3 defines

how public interventions can be measured, while Stage 4 describes the attribution of private climate

finance to different donors in multilateral funds, and how to quantify the causality between public

interventions and private finance.

Figure 1 - Four-stage framework and overview of decision points for this pilot study5

3 OECD (2015), "Estimating mobilised private climate finance: methodological approaches, options and trade-offs’, available at: http://dx.doi.org/10.1787/5js4x001rqf8-en 4 U.S. Department of State (2015), ‘Joint Statement on Tracking Progress Towards the $100 billion Goal Paris, France, 6 September 2015’, available at: http://www.state.gov/documents/organization/246878.pdf 5 Based on: Jachnik, R., R. Caruso and A. Srivastava (2015), "Estimating mobilised private climate finance: methodological approaches, options and trade-offs", OECD Environment Working Papers, No. 83, OECD Publishing, Paris.


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Not all climate finance goes directly into projects or ‘investments’. Some very relevant climate

projects concern policy support and project preparation support, preparing the ground for later

investments. We have made a distinction between two different kinds of public support to climate

goals:

1. Policy support and project preparation support: public support to policy and policy

instruments (e.g. developing legal frameworks, setting up ‘feed in tariffs’, institutional

strengthening, etc.) and for the preparation of projects. Giving indirect support to the

mobilisation of private climate finance.

2. Project finance: public financial support at project level, where money is invested for project

execution. Often directly related to the mobilisation of private climate finance.

Both forms of support are relevant and can be counted as public climate finance. They both have an

impact on the mobilisation of private climate finance, but it is only possible to quantify this impact for

the second form of support, i.e. direct project finance. It is not yet possible to calculate, nor even

estimate, the indirect mobilisation impact of public finance on private finance, even though this

indirect impact is extremely relevant. We have therefore not been able to include this form of

mobilisation in the quantification as part of this study. We have nevertheless included several case

studies to show the importance of this indirect mobilisation.

In order to understand the impact of various options in the calculation methodology on the final

numbers, we have carried out three sensitivity analyses:

• We have estimated the impact of measuring the financial flow at the moment of contract as well

as calculating at the moment of disbursement (in general this is substantially less).

• We have also estimated the difference between calculating all financial flows at ‘face-value’

(which is current international practice in climate finance) versus calculating the different flows

based on ‘grant-equivalent’ (the OECD DAC methodology; current practice in development

finance).

• We have also made an analysis of the impact, and implications, of considering export credit

insurance (provided, in Belgium, by Delcrede-Ducroire) as an instrument mobilising private

climate finance.

Relevant actors in the Belgian climate finance landscape

Belgium has a fragmented landscape of climate finance providers to developing countries. A Steering

Committee was established for this study to identify all of these actors and to discuss the technical

details of our methodology. Figure 2 presents the actors that were identified. This list is not

exhaustive. There could be more relevant actors which have not been examined in this study. Despite

our best efforts, not all of them could be included in the quantification of this study due to lack of data

or time constraints6.

It should be noted that data collection was relatively complicated for this study, due to the diverse

landscape of climate development finance providers in Belgium.

6 We have used data from: DGD, Flemish Foreign Affairs, Walloon Agency for Air and Climate, FPS Environment, BIO, and Finexpo. Delcredere-Ducroire data was used in the sensitivity analysis.


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Figure 2 - Landscape of relevant climate finance providers in Belgium

Results of the data assessment

We have conducted interviews, studied reports and sent a questionnaire to the Steering Committee

members and the participating organisations listed in Figure 2, to gain insight into their general climate

finance and their mobilisation of private climate finance in particular. The data available on the public

support delivered to climate projects was generally of good quality. However, the data available for

mobilised private finance was not documented in the existing data information systems. Therefore, we

had to go back to the original project documentation of the participating organisations several times in

order to get the required data and even then, not all data required for a correct calculation could

always be found.

In 2013 and 2014, Belgium provided EUR 106.61 million of climate finance through bilateral

channels and EUR 91.51 million through multilateral channels7. We were able to identify EUR 36.99

million of public finance that directly mobilised private climate finance. This finance was provided by

concessional and non-concessional loans from Finexpo and BIO. After applying the methodology to the

available data we concluded that the (main) Belgian climate finance providers mobilised a total of EUR

18.21 million of private climate finance in 2013 and 2014. There was no data available on climate

finance mobilised by Belgium through multilateral channels. However, we were able to make a first

7 These figures are based on the MMR report 2013-2014 for bilateral finance and climate-specific finance through multilateral channels, and additional data provided by BIO and Finexpo. (Government of Belgium, ‘MMR Report 2013-2014, Report on financial and technology support provided to developing countries under the Monitoring Mechanism Regulation (MMR)’, Communication with European Commission.)


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estimate of an additional sum of mobilised private climate finance by Belgium’s contributions to the

Global Environment Facility (GEF), which is discussed in section 4.6. of this report.

Table 1 - Overview of Belgian public climate finance and direct mobilisation of private climate finance

2013 2014 2013-2014

1. Bilateral channels

Total public finance provided by Belgium 56.78 49.83 106.61

… public finance that mobilised private climate finance 21.92 15.08 36.99

Mobilised private climate finance 7.67 10.54 18.21

Leverage factor 0.35 0.70 0.49

2. Multilateral channels


… public finance that mobilised private climate finance N/A N/A N/A

Mobilised private climate finance N/A N/A N/A

Leverage factor N/A N/A N/A N/A = not available

When considering these results, it is important to keep in mind that the majority (around 65-70%) of

Belgian public climate finance consists of grants with a strong focus on policy support and capacity

building. These grants are provided with the objective of development cooperation and are not directly

aimed at mobilising private finance. The Belgian development cooperation has specific partner

countries, which are often Least-Developed Countries (LDCs)8. These countries have a great need for

policy support and capacity building programmes to address climate change and other challenges, but

their potential to attract private finance is usually lower. The grants are generally provided before

private investments are made. They can be of major importance to attracting private climate finance

at a later stage, for example by supporting new legislation for renewable energy sources in recipient

countries. This can build the enabling environment that will allow scaling up of climate finance.

However, it is difficult to quantify the impact they have, for various reasons:

• It is very challenging to link private investments directly back to the initial Belgian grants;

• There is usually a large time gap between the policy support and the private investment;

• The private investment decision may be triggered by several factors, such as a more stable

interest rate, or the availability of new data on local wind speed or solar radiation, and not just

the policy support given by Belgium;

• The grant programmes do not include quantified private finance objectives, which means there

are no Monitoring, Reporting, and Verification (MRV) systems in place to track mobilised private

finance by these grants.

The impact of grants on mobilisation of private finance is therefore under-evaluated at the moment,

despite its importance for climate action, especially in the LDCs. However, even though it is difficult to

precisely assess the mobilisation impact of such instruments, the importance of providing climate

finance to the most vulnerable countries should not be under estimated.

We also analysed the results per financial instrument, per region and whether or not it was aimed at

mitigation or adaptation to get a better insight into the overall mobilisation, as demonstrated in Table

2.

8 In 2013 and 2014, for example, Belgium allocated more than half of its climate-relevant bilateral grants to LDCs.


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Table 2 - Overview of Belgian bilateral public and private climate finance in 2013-2014 (EUR millions)

2013 2014 Mitigation Adaptation Mitigation Adaptation

No. of projects

Public Mobilised private




Grants* 586 15.15 19.71 11.99 22.76 Africa 292 11.03 n.a. 12.02 n.a. 7.89 n.a. 11.31 n.a.

Asia 48 0.67 n.a. 2.38 n.a. 1.03 n.a. 3.88 n.a.

Latin America 126 0.85 n.a. 3.17 n.a. 0.34 n.a. 4.84 n.a.

Mediterranean region 19 1.10 n.a. 0.96 n.a. 1.37 n.a. 0.95 n.a.

Multiregional 101 1.51 n.a. 1.17 n.a. 1.37 n.a. 1.78 n.a.

Non-concessional loans

2 17.50 2.96 7.25 0.96

Africa 1 7.25 0.96

Asia 1 17.50 2.96

Latin America 0

Mediterranean region 0

Concessional loans 13 1.53 2.84 2.88 1.87 1.37 2.54 6.45 7.03

Africa 5 1.22 2.27 2.33 0.85 1.12 2.09 5.23 4.76

Asia 4 0.22 0.41 0.37 0.68 0.17 0.32 1.08 2.00

Latin America 3 0.09 0.16 0.18 0.33 0.07 0.14 0.14 0.25

Mediterranean region 1 0.01 0.01 * Expenditures classified as “cross-cutting” have been equally divided between mitigation and adaptation.

These outcomes should be regarded more as an indication than as an exact figure. It is the first time

these figures have been reported together. The limitations in data gathering and the variety of methods

used are not perfect and shortcomings still remain. Suggestions for improved reporting in the future are

included in the recommendations sections.

Conclusions and Recommendations

In spite of the ‘climate finance’ commitment of USD 100 billion per year by 2020, there is no

international agreement on the types of funds and instruments that can be defined as mobilised under

this commitment. In particular, it remains unclear what private finance flows could be considered

under the UNFCCC agreements as having been mobilised for climate-related mitigation and adaptation

action in developing countries. Consensus amongst stakeholders about international standards for

definitions and measurement methodologies for private climate finance mobilised by developed country

public interventions is important and the starting point for a successful joint effort.

Therefore, this study is (only) a preliminary exercise in terms of tracking and reporting Belgium’s

private climate finance mobilisation potential and future work will need to be aligned with the

international climate negotiations. However, this study did provide insight in all the (practical)

complexities, reporting difficulties and efforts needed to come to an accurate, accountable and

transparent methodology to track private climate finance by public sector interventions. The study

delivered several interesting insights in terms of where to improve the climate finance MRV framework

in Belgium, from which lessons should be learnt. The following concrete recommendations were made

by the consultants to the Steering Committee members in order to support them to improve future

efforts to track and report on both public and private climate finance flows.


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Recommendations in relation to the methodology

Continue to support the development of an internationally agreed methodology on Monitoring, Reporting, and Verification (MRV) for mobilised private finance

The most relevant points for attention are:

• Harmonising with current UNFCCC and OECD DAC reporting;

• Clarity on at what point in time the financial flow is measured;

• Clarity on export credits and guarantees;

• Opening the dialogue with developing countries.

Agree on a common international reporting framework

Harmonise the different methodologies for climate finance accounting used by Belgian actors

There are some striking differences in methodology between the different Belgian public actors,

especially in the way climate finance is tracked in the administrative systems (e.g. the use of the

‘Rio markers’). In order to increase the comparability between all Belgian actors we suggest to

agree on one shared standard for the use of the Rio markers in all Belgian public organisations.

We suggest organising a workshop gathering the main actors involved to discuss at the operational

level the best way forward, which should then be agreed at the national level.

Recommendations in relation to the data collection process

Develop clear instructions and a template for data gathering on (mobilised private) climate finance for all the Belgian actors involved

We suggest agreeing a common set of instructions for all relevant actors as well as a shared

template that would facilitate their efforts in gathering such data. We suggest the following

actions:

• Register public climate finance according to one agreed (Rio marker) methodology;

• Indicate if it is: a) policy support/project preparation, or b) direct project finance;

• If the support is about direct project finance (b), indicate if mobilisation of private finance is a

specific objective of the action;

• Register how much and in what form co-finance from private and/or public sources are (or will

be) achieved as part of the project;

• Register the source (type, origin) of both private and public co-finance;

• Register the climate finance amounts on the date of board approval, the date of contract signing

and the dates of disbursements (as they are likely to differ);

• Register any repayments (in case of loans) and claims (in case of guarantees);

• Register all instruments both at face value and as grant equivalent, according to the existing

OECD DAC formulation.

We suggest a joint workshop between the main actors9 (see above) to decide on a common

reporting template and on clear instructions for using it. Key elements in such a reporting format

are:

• To make all relevant information available for well-informed policy decision making;

• Harmonisation, so as to make results comparable (both nationally and internationally);

• Use existing reporting systems as much as possible in order to minimise labour intensity;

9 In our opinion the main actors should include at least: FPS Environment, DGD, LNE, BIO, Finexpo, AWAC and Bruxelles-Environment.


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• Try to anticipate as much as possible the development of a future, internationally agreed MRV

system.

Recommendations in relation to the results

Make clear choices on how to measure, and what to include in the Belgian climate finance reporting

The main and most impactful decisions that need to be taken are:

• Whether to calculate all instruments at face value or introduce a grant-equivalent for loans and

guarantees;

• Whether or not to include export promotion related finance instruments such as export credit

insurance for a Belgian company.

Improve cooperation and coordination on public climate finance and mobilised private climate

finance between all Belgian actors

A large number of public and private actors in Belgium are involved in climate finance. We

recommend improving the sensibility for and the coordination in climate finance by setting up a

‘Climate Finance Coordination Unit’.

Public climate finance should keep part of its focus on policy support and project preparation

even when the mobilisation of private finance is more indirect and more limited

Even though we cannot always calculate the impact on mobilising private climate finance, the

traditional forms of policy support and project preparation remain very relevant. They prepare the

ground for more profitable climate projects where private climate finance can play a role.

Better integrate the indirect instruments to support policy and project preparation with

direct project finance support

Improving the alignment between the different policy instruments and financial instruments would

improve the results from climate projects. A smart combination of grants, concessional loans and

guarantees can trigger more private climate finance and better climate projects.

Increase focus on mobilising private climate finance

An overall higher sensitivity for, and focus on, mobilising private climate finance could increase the

volume and quality of climate projects.

Take a deliberate stand on the balance between mitigation and adaptation projects

Although mitigation projects generally attract private finance more easily, we recommend paying

attention to the needs of investing in adaptation.

Least Developed Countries deserve special attention when developing climate finance policies

Public finance becomes more essential in LDCs where (perceived) risks are higher and the private

sector is less present. We suggest that the Belgian government continues to focus on LDCs and uses

the appropriate instruments.

Integrate climate finance and mobilised private climate finance in all relevant policy areas

Climate policy in general and climate finance in particular are no isolated areas but are strongly

linked with other policy areas, especially development policy and economic (export) policy. We

suggest paying close attention to the integration of climate finance policy in other relevant policy

areas.


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Samenvatting In overeenstemming met de besluiten onder het Raamverdrag van de Verenigde Naties inzake

klimaatverandering (UNFCCC) tijdens de ‘Conference of Parties’ (COP) in Kopenhagen en Cancún,

hebben de ontwikkelde landen zich ertoe verbonden om gezamenlijk USD 100 miljard per jaar vanaf

2020 te mobiliseren om klimaatmitigatie en -adaptatie in ontwikkelingslanden te ondersteunen10. Deze

toezegging omvat opgeschaalde, nieuwe en aanvullende, voorspelbare en toereikende financiering,

vanuit verschillende bronnen: publiek en privé, bilateraal en multilateraal, inclusief innovatieve

bronnen. In de context van de tijdens COP21 in Parijs overeengekomen besluiten hebben ontwikkelde

landen zich ertoe verbonden hun in Kopenhagen gemaakte financieringsbelofte te respecteren en

financiering te blijven voorzien voor mitigatie- en adaptatie-inspanningen in ontwikkelingslanden door

tussen 2020 en 2025 USD 100 miljard per jaar te blijven mobiliseren. Tegen 2025 zal er dan een nieuwe,

hogere, collectieve gekwantificeerde jaarlijkse klimaatfinancieringsdoelstelling vastgelegd worden.

In 2015 heeft de OESO, in samenwerking met het Climate Policy Initiative (CPI), de studie 'Climate

Finance in 2013-14 and the USD 100 billion goal' gepubliceerd. Deze studie maakt een inschatting van

de door de ontwikkelde landen gemobiliseerde publieke en private klimaatfinanciering voor

klimaatactiviteiten in ontwikkelingslanden in 2013 en 2014, als onderdeel van hun toezegging tijdens de

UNFCCC klimaatonderhandelingen in Cancún (2010). Het rapport schat dat USD 62 miljard aan publieke

en private financiering gemobiliseerd is in 2014, een stijging ten opzichte van de USD 52 miljard die

geschat werd voor 2013. Dit levert een gemiddelde op van USD 57 miljard per jaar in de periode 2013-

2014.

Dit onderzoek is uitgevoerd om een beter inzicht te krijgen in de Belgische bijdrage aan de

internationale toezegging voor klimaatfinanciering. Het betreft een gefundeerd onderzoek en

verstrekt resultaten, uitkomsten, analyse van en inzicht in de door België gemobiliseerde private

financieringsbronnen voor klimaatgerelateerde investeringen (zowel klimaatmitigatie als

klimaatadaptatie) in ontwikkelingslanden11. Het onderzoek heeft tot doel de (tamelijk complexe)

methodologische kwesties rond deze berekeningen beter te begrijpen en bespreekt de implicaties

van elk van de verschillende methodologische keuzes. Bovendien identificeert en beschrijft dit

rapport het landschap van relevante (hoofd-)actoren in België die klimaatfinanciering ter beschikking

stellen en beoordeelt het de private klimaatfinancieringsstromen die gemobiliseerd werden door

Belgische publieke interventies in 2013 en 2014. Het onderzoek bouwt voort op het methodologische

raamwerk dat ontwikkeld is door het door de OESO voorgezeten ‘Research Collaborative on Tracking

Private Climate Finance’.

Methodologie om de hoeveelheid gemobiliseerde private klimaatfinanciering te berekenen

De methodologische keuzes die ten grondslag liggen aan de inschattingen van gemobiliseerde private

klimaatfinanciering zijn belangrijk, omdat ze een aanzienlijke impact kunnen hebben op de

uiteindelijke uitkomsten. De belangrijkste keuzes die gemaakt moeten worden zijn:

10 Dit betekent dat alle substantiële investeringen in klimaatmitigatie (zoals hernieuwbare energie, energiebesparende maatregelen, enz.) en klimaatadaptatie (zoals kustbescherming, invloed van klimaatverandering op de landbouw, enz.), alsmede de daarmee verband houdende 'zachtere' beleidsinterventies, zoals technische bijstand, tezamen 'klimaatfinanciering' worden genoemd. 11 De mobilisatie van particuliere klimaatfinanciering betekent dat een Belgische publieke interventie (bijvoorbeeld het stellen van een beleidskader, concessionele leningen, subsidies, enz.) de particuliere sector 'getriggerd' heeft om investeringen te doen in klimaatrelevante activiteiten en/of projecten in ontwikkelingslanden.


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• Welke projecten en welk deel van deze projecten worden beschouwd als 'klimaatfinanciering';

• Hoe worden de verschillende financiële instrumenten (zoals subsidies, leningen, garanties, enz.)

gewaardeerd;

• Hoe worden de financiële stromen toegeschreven aan de verschillende actoren betrokken bij

klimaatrelevante projecten, gezien actoren (zowel publieke als private) van allerlei herkomst

(Annex-1- en non-Annex-1-landen volgens het VN-klimaatverdrag) betrokken zijn in

financieringsprojecten.

Er is momenteel geen internationaal aanvaarde methode voor het meten en rapporteren van

gemobiliseerde private klimaatfinanciering. Het door de OESO voorgezeten ‘Research Collaborative on

Tracking Private Climate Finance’ heeft een viertraps beslissingskader voor het uitwerken van een

methodologie ontwikkeld12. Zeer recentelijk hebben de meeste OESO-landen, door middel van dit

beslissingskader, een gemeenschappelijke methodologische visie aangenomen als grondslag voor de

toekomst13. Figuur 1 geeft een overzicht van de vier fasen binnen dit beslissingskader. In dezelfde

figuur wordt voor iedere fase ook aangegeven welke beslissingen zijn genomen door de voor deze

pilootstudie aangestelde stuurgroep, die was samengesteld uit vertegenwoordigers van de belangrijkste

Belgische publieke instellingen die klimaatfinanciering leveren aan ontwikkelingslanden. Deze methode

sluit nauw aan bij de aangenomen gemeenschappelijke visie van de OESO-landen over het in kaart

brengen van gemobiliseerde private klimaatfinanciering. In fase 1 van het beslissingskader worden de

kernbegrippen vastgesteld. Hieronder valt onder andere het definiëren van klimaatfinanciering alsmede

wat beschouwd kan worden als gemobiliseerde private klimaatfinanciering. In fase 2 van het kader

worden beslissingen genomen over wat voor type en welke soort publieke interventies in aanmerking

komen bij het berekenen van de mobilisatie van private klimaatfinanciering. Fases 3 en 4 van het

kader, die meer van technische aard zijn, vormen het raamwerk voor de kwantificering van private

klimaatfinanciering. Fase 3 bepaalt hoe overheidsinterventies kunnen worden gemeten, terwijl fase 4

de toekenning van private klimaatfinanciering beschrijft richting de verschillende betrokken donoren in

multilaterale fondsen, alsmede hoe de causaliteit tussen publieke interventies en private

klimaatfinanciering gekwantificeerd moet worden.

12 OESO 2015, "Estimating mobilised private climate finance: methodological approaches, options and trade-offs", beschikbaar via: http://dx.doi.org/10.1787/5js4x001rqf8-en 13 Joint Statement on Tracking Progress Towards the $100 billion Goal Paris, Frankrijk, 6 september 2015.


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Figuur 1 - Viertraps beslissingskader en overzicht van genomen beslissingen voor deze pilootstudie14

Niet alle klimaatfinanciering gaat rechtstreeks naar projecten of 'investeringen'. Beleidsondersteuning

en ondersteuning in de voorbereiding van projecten dragen bij tot het aantrekken van latere

investeringen en zijn evenzeer relevante klimaatfinanciering, maar hun impact is lastig te

kwantificeren. We hebben daarom een onderscheid gemaakt tussen twee verschillende soorten van

overheidssteun voor klimaatdoelstellingen in ontwikkelingslanden:

1. Beleidsondersteuning en ondersteuning voor projectvoorbereiding: overheidssteun voor

beleid en beleidsinstrumenten (zoals het ontwikkelen van wettelijke kaders, het ontwikkelen

van 'feed-in-tarieven', institutionele kennisopbouw, enz.) en voor de voorbereiding van projecten

(zoals haalbaarheidsstudies). Deze vorm van financiering geeft indirecte steun aan de mobilisatie

van private klimaatfinanciering.

2. Projectfinanciering: financiële overheidssteun op projectniveau, waarbij geld wordt

geïnvesteerd in de uitvoering van projecten. Dit kan vaak direct gerelateerd worden aan de

inbreng van private klimaatfinanciering.

Beide vormen van overheidssteun zijn relevant en belangrijk, en kunnen worden beschouwd als

publieke klimaatfinanciering. Ze hebben beiden een impact op de mobilisatie van private

klimaatfinanciering, maar er is enkel een directe link te kwantificeren tussen publieke en private

14 Gebaseerd op:Jachnik, R., R. Caruso and A. Srivastava (2015), "Estimating mobilised private climate finance: methodological approaches, options and trade-offs", OECD Environment Working Papers, No. 83, OECD Publishing, Paris.


14

financiering voor de tweede vorm, waarbij rechtstreeks projectfinanciering geleverd wordt. Op dit

moment is het nog niet mogelijk om de indirecte mobilisatie van private klimaatfinanciering via

publieke financiering in te schatten of te berekenen, hoewel deze indirecte invloed zeer relevant is.

Daarom hebben we deze vorm van mobilisatie niet mee kunnen nemen in de kwantificering binnen deze

studie. We hebben wel enkele case studies opgenomen die het belang van deze indirecte mobilisatie

weergeven.

Om de impact van de verschillende opties in de berekeningsmethode op de finale cijfers beter te

begrijpen, hebben we tevens drie gevoeligheidsanalyses uitgevoerd.

• Zo hebben we in kaart gebracht hoe het resultaat in gemobiliseerde private financiering

verschilt tussen het uitvoeren van de berekening op het moment dat de opdracht voor een

project wordt gegeven en het moment van de daadwerkelijke uitbetaling van een project

(algemeen gesproken is dit aanzienlijk minder).

• We hebben ook berekend wat de impact is van het maken van de berekening van alle financiële

stromen tegen 'face value'(dat is de huidige internationale praktijk in klimaatfinanciering) t.o.v.

‘grant-equivalent’ (de huidige OESO DAC methodiek voor financiering in

ontwikkelingssamenwerking).

• Ten slotte hebben we een analyse gemaakt van de impact op de gemobiliseerde private

klimaatfinanciering van het meerekenen van exportkredietverzekeringen (in België voorzien door

Ducroire-Delcredere) als instrument om private klimaatfinanciering te mobiliseren.

Relevante actoren in het Belgische landschap van klimaatfinanciering

België heeft een versnipperd landschap van actoren die klimaatfinanciering verstrekken aan

ontwikkelingslanden. Voor deze pilootstudie is een stuurgroep aangesteld om de relevante actoren te

identificeren en met hen de technische en complexe materie te bespreken met betrekking tot het

methodologische kader. Figuur 2 geeft de actoren weer die geïdentificeerd werden tijdens deze studie.

Deze lijst is echter niet exhaustief aangezien er nog meer relevante actoren kunnen zijn die niet

werden geïdentificeerd tijdens deze studie. Ondanks alle inspanningen van de consultants zijn niet alle

actoren opgenomen in de kwantificering van deze studie, wat te wijten is aan een gebrek aan gegevens

of tijdsdruk15.

Opgemerkt moet worden dat het verzamelen van gegevens relatief ingewikkeld en gecompliceerd

was voor deze studie gegeven het diverse landschap van relevante actoren in België die klimaat-

relevante financiering leveren voor ontwikkelingssamenwerking in ontwikkelingslanden.

15 De gebruikte data en gegevens in de kwantificering binnen deze studie zijn afkomstige van: DGD, Vlaanderen Internationaal, het Waals agentschap voor lucht en klimaat, Federale overheidsdienst voor leefmilieu, BIO-Invest en Finexpo. Gegevens van Ducroire-Delcredere werden enkel gebruikt in de gevoeligheidsanalyse.


15

Figuur 2 - Landschap van publieke actoren in België die klimaatfinanciering verlenen

Resultaten van het kwantificeren van de data

Om de kwantificering voor te bereiden hebben we interviews afgenomen, rapporten bestudeerd en een

vragenlijst naar alle leden van de stuurgroep gestuurd (zie figuur 2). Zo probeerden we inzicht te

krijgen in de publieke klimaatfinanciering en het daarbij horende mobilisatiepotentieel voor private

klimaatfinanciering. De ontvangen informatie en data met betrekking tot de publieke steun geleverd

aan klimaatprojecten was over het algemeen van goede kwaliteit. Echter, informatie en data omtrent

gemobiliseerde private klimaatfinanciering is niet, of nauwelijks, gedocumenteerd in de bestaande

data-informatiesystemen. Daarom hebben we, in onze zoektocht naar de vereiste data, vaak de

oorspronkelijke project-specifieke documentatie moeten raadplegen. Toch stelde zelfs deze methode

ons niet altijd in staat om alle gegevens bij elkaar te krijgen voor een juiste berekening van het

mogelijke mobilisatiepotentieel.

In 2013 en 2014 heeft België EUR 106,61 miljoen euro aan publieke klimaatfinanciering bij elkaar

gebracht via bilaterale kanalen en EUR 91,51 miljoen euro via multilaterale kanalen16. Van het

totaal aan bilaterale publieke klimaatfinanciering hebben we EUR 36,99 miljoen euro kunnen aanduiden

als publieke interventies die private klimaatfinanciering gemobiliseerd hebben. Deze publieke

financiering werd vooral verstrekt door Finexpo en BIO, via concessionele en niet-concessionele

leningen. Na toepassing van de methodologie op de beschikbare data kunnen we concluderen dat

de (belangrijkste) Belgische klimaatfinanciers een totaal van EUR 18,21 miljoen aan private

klimaatfinanciering gemobiliseerd hebben in 2013 en 2014. Aangezien er geen data of informatie

beschikbaar was over private klimaatfinanciering die gemobiliseerd zou zijn door België via de

16 Deze cijfers zijn gebaseerd op de Belgische MMR rapportage voor 2013-2014 voor de bilaterale klimaatfinanciering en de klimaat-specifieke financiering via multilaterale kanalen, alsmede op aanvullende gegevens die door BIO en Finexpo zijn verstrekt.


16

multilaterale kanalen, hebben wij dit niet kunnen kwantificeren. We zijn echter wel in staat geweest

om een eerste schatting te maken van een additioneel bedrag aan gemobiliseerde private

klimaatfinanciering via de bijdragen van België aan de ‘Global Environment Facility’ (GEF), wat meer in

detail besproken zal worden in paragraaf 4.6. van dit rapport.

Tabel 1 – Overzicht van Belgische publieke klimaatfinanciering en directe mobilisatie van private klimaatfinanciering

2013 2014 2013-2014

1. Bilaterale kanalen

Totale publieke klimaatfinanciering door België 56.78 49.83 106.61

… publieke klimaatfinanciering die private klimaatfinanciering

gemobiliseerd heeft 21.92 15.08 36.99

Gemobiliseerde private klimaatfinanciering 7.67 10.54 18.21


2. Multilaterale kanalen

Totale publieke klimaatfinanciering door België 34.94 56.58 91.52

… publieke klimaatfinanciering die private klimaatfinanciering

gemobiliseerd heeft

N/A N/A N/A

Gemobiliseerde private klimaatfinanciering N/A N/A N/A

Leverage factor N/A N/A N/A N/A = niet beschikbaar

Bij het analyseren van deze resultaten is het belangrijk om in het achterhoofd te houden dat het

merendeel (ongeveer 65-70%) van de Belgische publieke klimaatfinanciering bestaat uit subsidies met

een sterke focus op beleidsondersteuning en capaciteits- en kennisopbouw in ontwikkelingslanden. Deze

subsidies worden verstrekt met het doel ontwikkelingssamenwerking te bevorderen en zijn niet

rechtstreeks bedoeld om private financiering te mobiliseren. Bovendien is de Belgische

ontwikkelingssamenwerking toegespitst op specifieke partnerlanden, welke vaak behoren tot de minst-

ontwikkelde landen (‘Least Developed Countries, LDC’s)17. Deze landen hebben een grote behoefte aan

beleidsondersteuning en programma's voor capaciteitsopbouw om klimaatverandering aan te pakken,

maar hun mogelijkheden om private financiers aan te trekken zijn meestal lager. De door België

gegeven subsidies worden over het algemeen verstrekt lang voordat private financiers interesse tonen

om te investeren. Daarom kunnen dit soort subsidies alsnog van groot belang zijn voor het aantrekken

van private klimaatfinanciering in een later stadium, bijvoorbeeld via de ondersteuning van de

ontwikkeling van nieuwe wetgeving rondom hernieuwbare energie in ontwikkelingslanden. Dit kan de

nodige ondersteuning bieden om het opschalen van klimaatfinanciering mogelijk te maken. Het is

echter moeilijk om de bijdrage van beleidsondersteuning en capaciteits- en kennisopbouw in het

mobiliseren van private klimaatfinanciering te kwantificeren omwille van de volgende redenen:

• Het is vrijwel onmogelijk om de private investeringen rechtstreeks te koppelen aan de initiële

subsidies die gedaan zijn door België;

• Het tijdverschil tussen de geleverde beleidsondersteuning en de daadwerkelijke private

investeringen is vaak vrij groot;

• De beslissing van private financiers wordt vaak beïnvloed door verschillende factoren, zoals een

meer stabiele rente, of de beschikbaarheid van nieuwe gegevens over de lokale windsnelheid of

zonnestraling, en niet alleen door de beleidsondersteuning die geleverd wordt door België;

17 In 2013 en 2014 heeft België meer dan de helft van de bilaterale klimaat-relevante subsidies aan de minst ontwikkelde landen uitgekeerd.


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• In deze subsidieprogramma's ontbreken (vrijwel altijd) gekwantificeerde doelstellingen ten

aanzien van private financiering, wat betekent dat er geen monitoring, rapportering en

verificatie (MRV) systemen ontwikkeld zijn om gemobiliseerde private financiering op te volgen

en in kaart te brengen.

Hoewel deze indirecte subsidies een feitelijke bijdrage leveren aan het bereiken van klimaatmitigatie

en –adaptatiedoelstellingen, in het bijzonder in de minst ontwikkelde landen, is de in de finale cijfers

weergegeven impact en bijdrage ervan op de mobilisatie van private klimaatfinanciering daarom per

definitie een onderschatting. Echter, hoewel het moeilijk is om de impact van deze instrumenten op de

private financiering te kwantificeren en juist te beoordelen, mag het belang van het leveren van

klimaatfinanciering aan de meest kwetsbare landen niet worden onderschat.

We hebben de resultaten geanalyseerd per financieel instrument, per regio en opgesplitst naar

mitigatie of adaptatiefinanciering, om zodoende een beter inzicht in de totale mobilisatie van Belgische

klimaatfinanciering te krijgen, zoals weergegeven in tabel 2.

Tabel 2 – Overzicht van Belgische bilaterale publieke en private klimaatfinanciering in 2013-2014 (EUR miljoenen)

2013 2014 Mitigatie Adaptatie Mitigatie Adaptatie

Aantal projecten

Publiek Private financiering




Subsidies* 586 15.15 n.a. 19.71 n.a. 11.99 n.a. 22.76 n.a.

Afrika 292 11.03 n.a. 12.02 n.a. 7.89 n.a. 11.31 n.a.

Azië 48 0.67 n.a. 2.38 n.a. 1.03 n.a. 3.88 n.a.

Latijns-Amerika

126 0.85 n.a. 3.17 n.a. 0.34 n.a. 4.84 n.a.

Middellandse-Zeegebied

19 1.10 n.a. 0.96 n.a. 1.37 n.a. 0.95 n.a.

Multi-regionaal

101 1.51 n.a. 1.17 n.a. 1.37 n.a. 1.78 n.a.

Niet-concessionele leningen

2 17.50 2.96 7.25 0.96

Afrika 1 7.25 0.96

Azië 1 17.50 2.96

Latijns-Amerika

0

Middellandse-

Zeegebied 0

Concessionele leningen

13 1.53 2.84 2.88 1.87 1.37 2.54 6.45 7.03

Afrika 5 1.22 2.27 2.33 0.85 1.12 2.09 5.23 4.76

Azië 4 0.22 0.41 0.37 0.68 0.17 0.32 1.08 2.00

Latijns-

Amerika 3 0.09 0.16 0.18 0.33 0.07 0.14 0.14 0.25

Middellandse-Zeegebied

1 0.01 0.01

* Uitgaven geclassificeerd als "cross-cutting" zijn gelijk verdeeld tussen mitigatie en adaptatie.

We willen benadrukken dat deze uitkomsten vooral als een indicatie moeten worden beschouwd en niet

als een exact cijfer. Het is de eerste keer dat deze cijfers samen gerapporteerd worden. De eerder


18

vermelde ervaren moeilijkheden bij het verzamelen van data en gegevens alsmede de verscheidenheid

in de door de verschillende actoren gebruikte meetmethoden zorgen ervoor dat deze cijfers niet

robuust zijn. Bij de aanbevelingen zullen wij suggesties aanreiken voor het verbeteren van de

toekomstige rapportering.

Conclusies en aanbevelingen

Hoewel reeds in 2010 de klimaatfinancieringsdoelstelling van USD 100 miljard per jaar vanaf 2020 werd

overeengekomen, is er tot op heden geen internationale overeenstemming over de definitie van

gemobiliseerde private klimaatfinanciering. Het blijft onduidelijk welke private financieringsstromen

als ‘gemobiliseerd voor klimaat-gerelateerde mitigatie- en adaptatieprojecten in ontwikkelingslanden’

kunnen worden beschouwd onder het UNFCCC. Er is nood aan een consensus onder de relevante

stakeholders over internationale normen voor definities en meetmethoden voor de door ontwikkelde

landen gemobiliseerde private klimaatfinanciering als de basis voor een succesvolle gezamenlijke

inspanning.

Deze studie is daarom (slechts) een eerste oefening in het meten en rapporteren van het potentieel van

de door België gemobiliseerde private klimaatfinanciering. Verdere werkzaamheden zullen moeten

afgestemd worden op de ontwikkelingen in de internationale klimaatonderhandelingen. Deze studie

heeft desalniettemin meer duidelijkheid gebracht wat betreft de (praktische) complexiteit,

moeilijkheden en inspanningen die nodig zijn om een nauwkeurige, verantwoorde en transparante

methodologie te ontwikkelen waarmee door overheidsinterventies gemobiliseerde private

klimaatfinanciering in kaart kan gebracht worden. De studie heeft meerdere interessante inzichten voor

het versterken van het MRV-kader voor klimaatfinanciering in België opgeleverd. Hieruit kunnen lessen

getrokken worden. De consultants hebben volgende concrete aanbevelingen gedaan aan de leden van

de stuurgroep om hun toekomstige inspanningen voor het meten en rapporteren van zowel de publieke

als de private klimaatfinancieringsstromen te faciliteren.

Aanbevelingen met betrekking tot de methodologie

Blijf de ontwikkeling van een internationaal aanvaarde methode voor de monitoring, rapportage en verificatie (MRV) voor gemobiliseerde private financiering ondersteunen

De meest relevante aandachtspunten hierbij kunnen zijn:

• Het harmoniseren met de huidige rapportagestructuur onder het UNFCCC en de OESO-DAC;

• Duidelijkheid over op welk moment de financiering exact gemeten wordt;

• Duidelijkheid over exportkredieten en garanties;

• Het openen van een dialoog over dit thema met de ontwikkelingslanden.

Tracht te komen tot gemeenschappelijke internationale regels voor rapportage

Harmoniseer de verschillende methoden die momenteel worden gebruikt door de verschillende Belgische actoren voor het meten en rapporteren van klimaatfinanciering

Er is een aantal opvallende verschillen in de door de verschillende Belgische publieke actoren

gebruikte methodologieën, zoals in de manier waarop klimaatfinanciering wordt bijgehouden in de

administratieve systemen (bijvoorbeeld het gebruik van de 'Rio markers'). Om de vergelijkbaarheid

te vergroten raden we aan het met alle Belgische publieke organisaties eens te worden over een

gemeenschappelijke standaard voor het gebruik van de ‘Rio markers’.


19

Wij stellen voor een workshop te organiseren die de belangrijkste actoren die betrokken zijn bij

het verzamelen van data rond klimaatfinanciering bijeenbrengt, om op operationeel niveau de best

mogelijke oplossing te vinden en die vervolgens op nationaal niveau vast te leggen.

Aanbevelingen met betrekking tot het verzamelen van gegevens

Ontwikkel duidelijke instructies en een uniform modeldocument voor alle betrokken Belgische actoren voor het verzamelen van gegevens rond (gemobiliseerde private) klimaatfinanciering

Wij stellen voor om tot een akkoord te komen over een gemeenschappelijke reeks instructies die

gelden voor alle betrokken actoren, evenals een modeldocument te ontwikkelen om het verzamelen

van gegevens rond klimaatfinanciering te vergemakkelijken. Wij stellen de volgende acties voor:

• Registreer publieke klimaatfinanciering volgens een uniform afgesproken (Rio marker)

methodologie;

• Geef aan of het gaat om: a) beleidsondersteuning en/of de voorbereiding van projecten, of b)

directe projectfinanciering;

• Als de ondersteuning is gericht op rechtstreekse projectfinanciering (b), geef dan aan of de

mobilisatie van private financiering een specifiek doel van de betreffende interventie is;

• Registreer hoeveel, en in welke vorm, co-financiering van private en/of publieke bronnen wordt

aangewend bij de realisatie van een project;

• Registreer de bron (type en herkomst) van zowel de private als de publieke co-financiering;

• Registreer de relevante klimaatfinanciering op de datum van goedkeuring, de datum van

ondertekening van het contract en de data van de betalingen aan het project

(hoogstwaarschijnlijk verschillen de bedragen per fase);

• Registreer de eventuele terugbetalingen (in geval van leningen) en vorderingen (in het geval van

garanties);

• Registreer alle instrumenten, zowel in nominale waarde (‘face value’) als in ‘grant-equivalent’,

in overeenstemming met de bestaande OESO-DAC methode.

Wij stellen voor een workshop te organiseren, die de belangrijkste actoren18, bijeenbrengt (zie

boven) om gezamenlijk te beslissen over een gemeenschappelijk modeldocument voor rapportage

en duidelijke instructies op te stellen voor het gebruik hiervan. Belangrijke elementen voor een

dergelijk modeldocument zijn:

• Het inzichtelijk maken van alle relevante informatie ten behoeve van goed geïnformeerde

beleidsbesluitvorming;

• Harmonisatie zorgt ervoor dat resultaten vergelijkbaar zijn (zowel nationaal als

internationaal);

• Maak gebruik van bestaande rapportagesystemen binnen de verschillende departementen om de

administratieve last zoveel mogelijk te minimaliseren;

• Probeer zoveel mogelijk te anticiperen op de ontwikkeling van een toekomstig, internationaal

overeengekomen MRV-systeem voor klimaatfinanciering.

Aanbevelingen met betrekking tot de resultaten

Maak duidelijke keuzes over hoe te meten en wat op te nemen in de Belgische rapportage over klimaatfinanciering

De belangrijkste en meest invloedrijke beslissingen die moeten worden genomen zijn:

18 Naar onze mening moeten ten minste de volgende belangrijke actoren aanwezig zijn: FPS Leefmilieu, DGD, LNE, BIO, Finexpo, AWAC en Bruxelles-Environment.


20

• Of in de berekeningen steeds gebruik wordt gemaakt van de nominale waarde, dan wel of een

‘grant-equivalent’ benadering wordt toegepast voor leningen en garanties;

• Of financiële instrumenten die gerelateerd zijn aan exportbevordering, zoals de

exportkredietverzekering voor een Belgisch bedrijf, meegenomen moeten worden in de

berekeningen of juist niet.

Verbeter de samenwerking en coördinatie tussen de verschillende Belgische actoren inzake

zowel publieke als gemobiliseerde private klimaatfinanciering

Een groot aantal publieke en private partijen in België is betrokken bij klimaatfinanciering. We

raden aan de betrokkenheid bij en de coördinatie van klimaatfinanciering te verbeteren door het

opzetten van een 'Climate Finance Coordination Unit'.

Publieke klimaatfinanciering moet de focus blijven houden op beleidsondersteuning en

projectvoorbereiding, zelfs als de mobilisatie van private klimaatfinanciering hierbij indirect

en beperkt blijft

Hoewel we niet altijd de impact van het mobiliseren van private klimaatfinanciering kunnen

berekenen, blijven de ‘traditionele’ vormen van beleidsondersteuning en projectvoorbereiding zeer

relevant. Zij vormen de basis voor meer winstgevende klimaatprojecten waar private

klimaatfinanciering een rol kan spelen.

Integreer de instrumenten die indirect mobiliseren, beleid en projectvoorbereiding, beter met

de instrumenten voor directe projectfinanciering

Het verbeteren van de afstemming tussen de verschillende beleidsinstrumenten en financiële

instrumenten zou de resultaten van klimaatrelevante projecten kunnen verbeteren. Een slimme

combinatie van subsidies, concessionele leningen en garanties kan leiden tot meer private

klimaatfinanciering en kwaliteitsvollere klimaatrelevante projecten.

Verhoog de focus op het mobiliseren van private klimaatfinanciering

Een algemene hogere gevoeligheid en meer aandacht voor het mobiliseren van private

klimaatfinanciering kan de totale omvang en de kwaliteit van klimaatrelevante projecten verhogen.

Neem een weloverwogen standpunt in over de balans tussen klimaatmitigatie- en

klimaatadaptatieprojecten

Hoewel klimaatmitigatieprojecten over het algemeen gemakkelijker private financiering

aantrekken, raden wij aan aandacht te blijven houden voor de noodzaak om in klimaatadaptatie te

blijven investeren.

De minst-ontwikkelde landen verdienen speciale aandacht bij de ontwikkeling van beleid

omtrent klimaatfinanciering

Publieke klimaatfinanciering blijft van essentieel belang, in het bijzonder in de minst-ontwikkelde

landen (LDC’s) waar de (vermeende) risico’s van klimaatfinanciering hoger zijn en de private sector

in (veel) mindere mate aanwezig is. Wij stellen voor dat België zich blijft richten op de minst

ontwikkelde landen en daarbij de meest gepaste instrumenten gebruikt.

Integreer klimaatfinanciering en private klimaatfinanciering in alle relevante beleidsterreinen

Klimaatbeleid alsmede klimaatfinanciering zijn geen geïsoleerde activiteiten, maar zijn sterk

verbonden met andere beleidsterreinen, in het bijzonder met het ontwikkelings- en economische


21

(export)beleid. We raden aan veel aandacht te schenken aan de integratie van

klimaatfinancieringsbeleid in andere relevante beleidsdomeinen.


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Résumé exécutif Conformément aux décisions prises pendant les COPs (Conference of Parties) de Copenhague et

Cancún, de la Convention-Cadre des Nations Unies sur les Changements Climatiques (CCNUCC), les

nations développés se sont engagées à mobiliser conjointement 100 milliards de dollars par an à partir

de 2020 pour soutenir des actions d’atténuation et adaptation climatiques dans les pays en

développement19. Cet engagement est composé de flux de financement accrus, prévisibles, adéquats,

nouveaux et additionnels et issus d’une grande variété de sources. Récemment, dans le contexte du

paquet de Paris adopté lors de la COP21, les pays développés ont rappelé leur attachement à respecter

leur engagement pris à Copenhague, et se sont engagés à continuer à fournir du support d’adaptation

et d’atténuation des pays en voie de développement en continuant à mobiliser 100 milliards de dollars

par an de 2020 à 2025. Pour 2025, les pays se fixeront ensuite un nouvel objectif collectif quantifié en

matière de financement climatique international, d’au moins 100 milliards de dollars par an.

En 2015, le l'OCDE, en collaboration avec le Climate Policy Initiative (CPI), a publié le rapport ‘Climate

Finance in 2013-14 and the USD 100 billion goal’, qui fournit une estimation du financement climatique

public et privé mobilisé par les pays développés pour l'action climatique dans les pays en

développement en 2013 et 2014, par rapport à leur engagement pris lors de la conférence de la

CCNUCC de 2010 à Cancún. Le rapport estime que 62 milliards de dollars de financement publics et

privés ont été mobilisés en 2014, contre 52 milliards de dollars en 2013, soit une moyenne de 57

milliards de dollars par an sur la période 2013-2014.

Cette étude a été commanditée pour réaliser une analyse approfondie de la contribution belge à

l'engagement international, en fournissant des résultats fondés sur des faits, et en analysant en

profondeur les sources privées d’investissements climatiques (atténuation et adaptation) réalisés dans

les pays en développement et mobilisés par la Belgique20. L'étude vise à mieux comprendre les

questions méthodologiques (plutôt complexes) que soulèvent ces calculs et à examiner les

implications de chaque choix méthodologique. En outre, ce rapport identifie et décrit le paysage des

(principaux) fournisseurs internationaux de financement climat en Belgique et évalue les flux de

financement climat privé qui ont été mobilisés par des interventions publiques belges en 2013 et 2014.

L'étude se fonde sur le travail méthodologique élaboré par l’initiative de recherche ‘Research

Collaborative on Tracking Private Climate Finance’, menée sous l’égide de l'OCDE.

Méthodologie de calcul des niveaux de financement climat privés Les choix méthodologiques sous-jacents aux estimations des flux de financement climat privé sont

importants car ils peuvent avoir un impact substantiel sur le résultat global. Les choix les plus

importants qui doivent être faits concernent :

• la détermination des projets et composantes de ces projets qui peuvent être considérés comme

du ‘financement climatique’ ;

• la valorisation des différents instruments financiers (subventions, prêts, garanties, etc.) ;

19 Cela signifie que tous les investissements substantiels dans l’atténuation (production des énergies renouvelables, mesures d’efficacité énergétique, etc.) et l’adaptation (protection du littoral, évolution des effets de la météo sur l’agriculture, etc.), ainsi que les interventions dites ‘soft’ telles que l’assistance technique, sont labellisés ‘financement climatique’. 20 « Mobilisation du financement climatique privé » signifie ici qu’une intervention publique (par exemple à travers d’une politique de gouvernement, des prêts concessionnels, des subventions, etc.) par la Belgique a « déclenché » des investissements du secteur privé dans les activités et/ou projets liées au changement dans des pays en développement.


23

• l’attribution des montants aux différents acteurs, puisque des acteurs différents (publics et

privés) et de nombreuses origines (Annexe 1 et non-Annexe 1) sont impliqués dans le

financement des projets.

Il n’existe actuellement aucune méthodologie internationalement reconnue pour mesurer et

comptabiliser le financement climat privé. Le ‘Research Collaborative on Tracking Private Climate

Finance’ a développé un modèle de prise de décision en quatre étapes pour l’élaboration de cette

méthodologie21 et très récemment la plupart des pays de l'OCDE ont adopté des principes

méthodologiques communs22. La Figure 1 présente un aperçu de ce modèle en quatre étapes et de tous

les choix méthodologiques, tels qu’ils ont été opérés par le Comité de Pilotage des fournisseurs publics

de financement climat en Belgique, qui a utilisé dans le cadre de cette étude pilote. Cette

méthodologie suit de près les principes méthodologiques communs adoptés par les pays de l'OCDE en

matière de suivi du financement climat privé. Dans la phase 1 du modèle, les concepts de base doivent

être définis. Cela implique déterminer ce qu’est le financement climat, et de décider ce qui peut être

considéré comme du financement climatique privé. Dans la phase 2, il s’agit de choisir le type

d'intervention publique qui sera retenu lors du calcul de la mobilisation des financements climatiques

privés. Les phases 3 et 4 du modèle, plutôt techniques, fixent le cadre de l'exercice de quantification.

La phase 3 définit comment les interventions publiques peuvent être mesurées, tandis que la phase 4

décrit l'attribution du financement climatique privé à des donateurs différents et la détermination de la

causalité entre les interventions publiques et le financement privé.

Figure 1 - Modèle en quatre phases et vue d’ensemble des points de décision de cette étude23

21 OECD 2015, "Estimating mobilised private climate finance: methodological approaches, options and trade-offs", available at: http://dx.doi.org/10.1787/5js4x001rqf8-en 22 Joint Statement on Tracking Progress Towards the $100 billion Goal Paris, France, 6 September 2015. 23 Basé sur: Jachnik, R., Caruso, R., Srivastava, A. (2015), "Estimating mobilised private climate finance: methodological approaches, options and trade-offs", OECD Environment Working Papers, No. 83.


24

Tous les flux de financement climatique ne vont pas directement vers des projets ou des

‘investissements’. Certains projets importants ont pour objet l’appui aux politiques publiques et l’appui

à la préparation des projets, afin de préparer le terrain pour des investissements ultérieurs. Nous avons

fait la distinction entre deux types de soutien public aux objectifs climatiques :

1. L’appui aux politiques publiques et l’appui à la préparation des projets : à savoir le soutien

gouvernemental à l’élaboration ou à la réforme des politiques publiques (par exemple,

l'élaboration de cadres juridiques, la mise en place de ‘feed-in tariffs’ ou ‘tarifs de rachat’, le

renforcement institutionnel, etc.) et à l’élaboration des projets, soutenant indirectement la

mobilisation de la finance climatique privée.

2. Le financement des projets : à savoir le soutien financier public au niveau du projet, là où des

ressources financières sont investies pour l'exécution du projet. Ce type de financement est

souvent directement lié à la mobilisation de la finance climatique privée.

Ces deux formes de support sont pertinentes et peuvent être considérées comme du financement

climatique public. Elles ont toutes deux un impact sur la mobilisation du financement climatique privé,

mais il n’est possible de quantifier cet impact que pour la seconde forme de support, i.e. le

financement direct de projet. Il n’est pas encore possible de calculer, ou même d’estimer, l’impact

indirect que peut parfois avoir le financement climat public sur le secteur privé. Nous n’avons par

conséquent pas été capables d’inclure cette forme de mobilisation dans la section quantification de

cette étude. Nous y avons toutefois inclus plusieurs études de cas, afin d’illustrer l’importance de cette

mobilisation indirecte.

Pour comprendre l'impact des différentes méthodes de calcul, nous avons effectué trois analyses de

sensibilité. Dans un premier temps, nous avons calculé l'impact du flux financier au moment de la

signature du contrat de financement ainsi qu’au moment du décaissement (en général, le dernier est

inférieur au premier). Dans un second temps, nous avons également estimé la différence entre le calcul

de tous les flux financiers à la ‘valeur nominale’ (ce qui est la pratique internationale actuelle dans la

finance climatique) et un calcul basé sur la valeur ‘équivalent-subvention’ (‘grant equivalent’, selon la

méthodologie DAC de l'OCDE, utilisée dans la pratique courante des financements au développement).

Enfin, nous avons analysé l'impact et les conséquences sur le résultat final de considérer l'assurance-

crédit à l'exportation (en Belgique, cela est fourni par Delcredere-Ducroire) comme instrument

mobilisant du financement climatique privé.

Acteurs importants dans le paysage belge de la finance climat

La Belgique a un paysage fragmenté d'acteurs qui fournissent de la finance climatique aux pays en

développement. Un comité de pilotage a été créé dans le cadre de cette étude pour identifier

l'ensemble de ces acteurs et discuter des détails techniques de notre méthodologie. La Figure 2

présente les acteurs qui ont été identifiés. Cette liste n'est pas exhaustive en raison de contraintes

d’information et de temps. Il peut donc y avoir davantage d'acteurs importants qui n'ont pas encore été

inclus dans le champ de cette étude24.

24 Nous avons collecté des données issues de la DGD, de l’AWAC, du Département flamand des affaires étrangères, du SPF Environnement, de BIO et de Finexpo. Les données de Delcredere-Ducroire ont été utilisées dans le cadre d’une analyse de sensitivité.


25

Il faut signaler que la collecte de données pour cette étude a été relativement difficile à cause de

la diversité en Belgique des acteurs qui fournissent de la finance climatique aux pays en

développement.

Figure 2 - Fournisseurs importants de financement climatique en Belgique

Résultats de l’analyse des données

Nous avons mené des entretiens, étudié des rapports et envoyé un questionnaire aux membres du

Comité de pilotage et aux organismes participants énumérés dans la figure 2, afin de mieux comprendre

leur approche générale en matière de financement climatique et de mobilisation du financement climat

privé en particulier. Les données disponibles à propos du soutien gouvernemental apporté à des projets

climatiques sont en général de bonne qualité. Cependant, les données disponibles liées au financement

privé n'étaient pas précisées dans les bases de données existantes. Après avoir vérifié à plusieurs

reprises la documentation du projet original des organisations participantes afin d'obtenir les données

nécessaires, il est apparu que toutes les données nécessaires pour un calcul adéquat ne pouvaient pas

toujours être obtenues.

En 2013 et 2014, la Belgique a fourni EUR 106,61 millions en financements climatiques publics à

travers les canaux bilatéraux et EUR 91,51 millions par des voies multilatérales25. Nous avons réussi

à identifier EUR 36,99 millions de financements public qui ont mobilisé directement des financements

climatiques privés. Ce financement a été assuré par des prêts concessionnels et non concessionnels

25 Ces chiffres sont basés sur le rapportage MMR Belgique de 2013-2014, concernant le financement climatique bilatérale et le financement climatique multilatérale, et aussi sur des données supplémentaires de BIO et de Finexpo.


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fournis par Finexpo et BIO. Après avoir appliqué la méthodologie aux données disponibles, nous avons

conclu que les (principaux) fournisseurs de finance climatique belge ont mobilisé un total de EUR 18,21

millions de finance climatique privée en 2013 et 2014. Il n'existe pas de données disponibles sur la

finance climatique privée mobilisée par la Belgique par des voies multilatérales. Nous avons cependant

pu être en mesure de faire une estimation préliminaire d'une somme additionnelle de finance

climatique privée mobilisée par la Belgique par le biais de ses contributions au Global Environment

Facility (GEF). Celle-ci est détaillé dans la section 4.6 de ce rapport.

Tableau 1 – Vue d’ensemble des financements climatiques publics et de la mobilisation directe du financement climatique privé

2013 2014 2013-2014

1. Canaux bilatéraux

Financement public total fourni par la Belgique 56.78 49.83 106.61

… financement public ayant mobilisé du financement climat

privé 21.92 15.08 36.99

Financement climat privé mobilisé 7.67 10.54 18.21

Levier 0.35 0.70 0.49

2. Canaux multilatéraux

Financement public total fourni par la Belgique 34.94 56.58 91.52

… financement public ayant mobilisé du financement climat

privé

N/A N/A N/A

Financement climat privé mobilisé N/A N/A N/A

Levier N/A N/A N/A N/A = non available (pas disponible)

Lors de l'examen de ces résultats, il est important de garder en tête que la majorité (environ 65-70%)

du financement climat belge se compose de subventions, avec un fort accent sur le soutien des

politiques gouvernementales et sur le renforcement des capacités. Ces subventions sont accordées en

ayant pour but la coopération dans le développement et ne visent pas directement à mobiliser du

financement privé. Par ailleurs, la coopération belge au développement cible des pays-partenaires

spécifiques, qui figurent souvent parmi pays les moins avancés (Least Developed Countries). Ces pays

nécessitent énormément de soutien pour leurs politiques et leurs programmes de renforcement des

capacités pour lutter contre le changement climatique et d'autres défis, mais leur capacité d’attirer les

fonds privés est généralement plus faible. Ces subventions sont généralement octroyées avant que les

investissements privés soient réalisés et peuvent être très importantes pour attirer du financement

climat privé à un stade ultérieur, par exemple en soutenant une nouvelle législation en matière

d'énergie renouvelable dans les pays bénéficiaires. Un tel support peut créer un environnement

propice, qui permettra à terme d’augmenter la quantité totale de financement climatique mobilisé. Il

est cependant difficile de quantifier cet impact pour diverses raisons :

• Il est très difficile de rattacher les investissements privés directement aux subventions initiales

belges ;

• Il y a normalement un grand décalage temporel entre ce soutien et l'investissement privé ;

• La décision d'investir peut-être déclenchée par plusieurs facteurs qui n’ont pas de rapport avec

le soutien donnée par la Belgique, comme un taux d'intérêt plus stable ou la disponibilité de

nouvelles informations sur la vitesse locale du vent ou du rayonnement solaire ;

• Les programmes de subventions ne comprennent pas des objectifs quantifiés de financements

privés. Sans systèmes de Monitoring, Reporting and Verification (MRV) en place, il est donc

impossible de suivre les financements privés mobilisés par ces subventions.


27

L'impact des subventions sur la mobilisation du financement privé est donc actuellement sous-évalué,

malgré son importance pour l'action climatique, en particulier dans les pays moins développés26.

Cependant, même s’il est difficile d'évaluer précisément leur impact sur la mobilisation de ces

instruments, l'importance du financement climatique pour les pays les plus vulnérables ne doit pas être

sous-estimée.

Nous avons également analysé les résultats par instrument financier et région, et séparé les instruments

selon qu’ils visent à l'atténuation ou l'adaptation. Cela nous a permis d'obtenir un meilleur aperçu de la

mobilisation générale du financement climat belge, comme illustré dans le Tableau 2.

Tableau 2 – Vue d’ensemble du financement climat public et privé belge en 2013-2014 (EUR millions)

2013 2014

Atténuation Adaptation Atténuation Adaptation

No. de

projets Public

Financement

privé

mobilisé

Public

Financement

privé

mobilisé

Public

Financement

privé

mobilisé

Public

Financement

privé

mobilisé

Subventions* 586 15.15 n.a. 19.71 n.a. 11.99 n.a. 22.76 n.a.

Afrique 292 11.03 n.a. 12.02 n.a. 7.89 n.a. 11.31 n.a.

Asie 48 0.67 n.a. 2.38 n.a. 1.03 n.a. 3.88 n.a.

Amérique latine 126 0.85 n.a. 3.17 n.a. 0.34 n.a. 4.84 n.a.

Région

méditérranée 19 1.10 n.a. 0.96 n.a. 1.37 n.a. 0.95 n.a.

Plusieurs régions 101 1.51 n.a. 1.17 n.a. 1.37 n.a. 1.78 n.a.

Prêts non-

concessionnels 2 17.50 2.96 7.25 0.96

Afrique 1 7.25 0.96

Asie 1 17.50 2.96

Amérique latine 0

Région

méditérranée 0

Prêts

concessionnels 13 1.53 2.84 2.88 1.87 1.37 2.54 6.45 7.03

Afrique 5 1.22 2.27 2.33 0.85 1.12 2.09 5.23 4.76

Asie 4 0.22 0.41 0.37 0.68 0.17 0.32 1.08 2.00

Amérique latine 3 0.09 0.16 0.18 0.33 0.07 0.14 0.14 0.25

Région

méditerranéenne 1 0.01 0.01

* Les dépenses classées comme “cross‐cutting” ont été réparties équitablement entre l’atténuation et l’adaptation.

Etant donné qu’il s’agit de la première fois que ces chiffres sont présentés ensemble, soulignons que

ces résultats doivent être considérés plutôt comme des indications que comme des chiffres exacts. Les

limitations rencontrées lors de la collecte de données et la variété des méthodes utilisées expliquent

que des lacunes demeurent. Des suggestions pour une amélioration du rapportage dans les années à

venir sont inclues dans la sections ci-après.

26 En 2013 et 2014 la Belgique a payé plus que la moitié des subventions bilatérales climatiques aux pays les moins développés.


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Conclusions et recommandations

En dépit de l'engagement de mobiliser 100 milliards de dollars par an d'ici 2020, il n'existe a pas

d'accord international sur les types des fonds et des instruments qui peuvent être définis comme

mobilisés à ce titre. Il n’existe pas de compréhension commune des flux de financement privé qui

pourraient être considérés dans le cadre des accords de la CCNUCC comme ayant été mobilisés pour

l'atténuation et l'adaptation dans les pays en développement. Un consensus entre les différentes parties

prenantes sur des normes internationales devant permettre de définir et de rapporter le financement

climat privé mobilisé par des interventions publiques de pays développés est important et le point de

départ pour la réussite d'un effort conjoint.

Par conséquence, cette étude est un exercice préliminaire en termes de suivi et de rapportage du

potentiel de mobilisation de financement climatique privé de la Belgique et des travaux futurs

entrepris, en alignement avec les négociations internationales. Cependant, cette étude permet de

donner un aperçu de toutes les complexités (pratiques), obstacles et efforts nécessaires pour arriver à

une méthodologie précise, justifiable et transparente pour mesurer et rapporter le financement

climatique privé mobilisé par des interventions du secteur public. L'étude a livré plusieurs pistes

d’amélioration du cadre de rapportage du financement climat en Belgique, à partir desquelles des

leçons pourraient être tirées. Les recommandations concrètes suivantes ont été faites par les

consultants aux membres du comité du pilotage, afin de faciliter leurs efforts futurs pour suivre et

rapporter les flux de financement climat publics et privés.

Recommandations par rapport à la méthodologie

Continuer à soutenir le développement d’une méthodologie internationale commune pour les procédures de Monitoring, Reporting and Verification (MRV) en matière de suivi du financement privé mobilisé

Les points les plus pertinents sont :

• Harmonisations avec les règles régissant les rapports de la CCNUCC et des rapports DAC de

l'OCDE ;

• Clarté sur le moment exact du mesurage du financement ;

• Clarté sur les crédits à l’exportation et les garanties ;

• Ouverture d’un dialogue avec les pays en développement.

Se mettre d’accord sur un cadre international de règles pour rapporter les informations

Harmoniser les différentes méthodologies utilisées par les acteurs belges pour comptabiliser le

financement climatique

Il existes plusieurs différences méthodologiques frappantes entre les différents acteurs publics

belges, en particulier dans la façon dont le financement climat est suivi dans les systèmes

administratifs (par exemple, l'utilisation des ‘Rio markers’). Afin d'améliorer la comparabilité entre

tous les acteurs belges nous suggérons un accord sur une norme commune pour l'utilisation des «Rio

markers» dans toutes les organisations publiques belges.

Nous suggérons d'organiser un workshop pour rassembler les principaux acteurs27 concernés et

discuter la meilleure voie à suivre sur le plan opérationnel, qui devra ensuite être adoptée au

niveau national.

27 Selon nous, au moins les acteurs importants suivants doivent être présents: FPS Environnement, DGD, LNE, BIO, Finexpo, AWAC et Bruxelles-Environnement.


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Recommandations par rapport aux processus de collecte de données

Développer des instructions et un modèle clairs pour la collecte de données sur le financement climatique (privé) pour tous les acteurs belges impliqués

Nous suggérons un accord sur un ensemble commun d'instructions pour tous les acteurs concernés

ainsi qu’un modèle partagé qui faciliterait les efforts dans la collecte des données. Nous suggérons

les mesures suivantes :

• Enregistrer la finance climatique publique selon une méthodologie agréée («Rio marker») ;

• Indiquer toujours si l’action a trait à : a) la préparation d’un projet/politique de soutien ou b) le

financement direct de projets ;

• Si le soutien au projet se fait directement par un financement (b), indiquer si la mobilisation du

financement privé est un objectif spécifique de l'action ;

• Enregistrer combien et sous quelle forme le projet comprend des co-financements issus de

sources privées et / ou publiques ;

• Enregistrer la source (type, origine) du co-financement privé et public ;

• Enregistrer les montants de financement climat à la date d'approbation par le Conseil

d’administration (ou toute autre entité décisionnaire), à la date de la signature du contrat et

aux date des décaissements (car celles-ci peuvent être différentes) ;

• Enregistrer les remboursements (en cas de prêts) et les revendications (en cas de garanties) ;

• Enregistrer tous les instruments à la fois à leur valeur nominale et en équivalent-subvention

(‘grant-equivalent’), selon les méthodes du DAC de l'OCDE.

Nous proposons un workshop conjoint avec les principaux acteurs (voir ci-dessus) pour prendre une

décision commune sur un modèle de rapport et sur des instructions claires pour l’utiliser. Les

éléments-clés qui doivent être présent dans ce rapport sont :

• Rendre toutes les informations pertinentes disponibles pour faciliter la prise de décision

politique ;

• Harmoniser, afin de rendre les résultats comparables (à la fois au niveau national et

international) ;

• Utiliser autant que possible des systèmes de rapportage existant afin de minimiser la charge de

travail ;

• Essayer d'anticiper autant que possible le développement d'un système internationalement

agréé de Monitoring, Reporting and Verification.

Recommandations par rapport aux résultats

Bien choisir les critères de mesure ainsi que ce qui doit être inclus dans le rapportage du financement climat belge

Les décisions les importantes qui doivent être prises portent sur les points suivants :

• réalisation des calculs pour les instruments à leur valeur nominale ou selon la méthode de

l’équivalent-subvention (‘grant-equivalent’) pour les prêts et garanties ;

• inclusion ou non des instruments financiers liés à la promotion des exportations, tels que

l'assurance-crédit à l'exportation pour une entreprise belge.

Améliorer la coopération et la coordination sur le financement climatique public et privé entre

tous les acteurs belges

Un grand nombre d'acteurs publics et privés en Belgique sont impliqués dans le financement

climatique. Nous recommandons d'améliorer leur coordination en la matière en mettant en place

une ‘Unité de coordination du financement climatique’.


30

Le financement climatique public doit conserver en partie son accent sur le soutien des politiques gouvernementales et la préparation des projets, même si la mobilisation du financement privé est plutôt indirecte et limitée

Même s’il n’est pas toujours possible de calculer leur impact sur la mobilisation de financements

climatiques privés, les formes traditionnelles de soutien aux politiques gouvernementales et de

support à la préparation de projets restent très pertinentes. Elles préparent en effet le terrain pour

des projets climatiques où la finance climatique privé peut jouer un rôle.

Mieux intégrer les instruments indirects, avec l’objective de soutenir les politiques publiques et

la préparation de projets, avec le soutien financier direct de projet

Améliorer l'alignement entre les différents instruments de la politique et des instruments financiers

permettrait d'améliorer les résultats des projets climatiques. Une combinaison intelligente de

subventions, prêts et garanties peut déclencher le financement du climat privé et rendre possible

des projets climatiques de plus haute qualité.

Mettre plus d'accent sur la mobilisation des financements climatiques privés

Une plus grande attention et concentration sur la mobilisation de la finance climatique privée

pourrait accroître le volume et la qualité des projets climatiques.

Prendre parti sur l'équilibre entre les projets d'atténuation et d'adaptation

Bien que les projets d'atténuation attirent plus facilement les financements privés, nous

recommandons d’accorder une attention spécifique aux besoins d'investir dans l'adaptation.

Les pays moins développés méritent une attention particulière lors de l'élaboration des

politiques de finance climatique

Les financements publics sont encore plus essentiels dans les pays moins développés, où les risques

(perçus) sont plus élevés et le secteur privé est moins présent. Nous suggérons que le gouvernement

belge continue à se concentrer sur les pays moins développés et utilise les instruments appropriés.

Intégrer la finance climatique et la finance climatique privée dans tous les domaines politiques

pertinents

La politique climatique en général et la finance climatique en particulier n’est pas un sujet isolé,

mais fortement lié à d'autres domaines d'action de la politique de développement, en particulier la

politique économique (par exemple, les exportations). Nous suggérons de veiller à l'intégration plus

étroite entre politique de financement climatique et autres domaines d'action pertinents.


31

CONTENTS

Abstract ................................................................................................... 1

Executive Summary .................................................................................... 3

Samenvatting .......................................................................................... 11

Résumé exécutif ...................................................................................... 22

List of Tables ........................................................................................... 35

List of Figures ......................................................................................... 36

List of Abbreviations ................................................................................. 37

1 Introduction ....................................................................................... 39

2 Methodological Framework for Belgium ..................................................... 43

2.1 Methodological framework for this Belgian pilot study ................................. 44

2.2 Stage 1: Defining core concepts ............................................................ 46 2.2.1 Definition of climate-relevant (D1, D2) ............................................................... 46 2.2.2 Definition of public and private finance (D3, D4, D5) .............................................. 48 2.2.3 Classification of developed and developing countries (D6) ........................................ 49 2.2.4 Geographical origin of private finance (D7, D8, D9) ................................................ 50

2.3 Stage 2: Identify public interventions and instruments ................................ 51

2.4 Stage 3: Valuing public interventions and total private finance involved .......... 55 2.4.1 Conversion of currency (A1, A2, A3) ................................................................... 55 2.4.2 Point of measurement (A4) ............................................................................. 55 2.4.3 Valuing public interventions (A5, A6) ................................................................. 57 2.4.4 Boundaries and value of mobilised private finance (A7, A8, A9) ................................. 62 2.4.5 Data or proxies (A10, A11) .............................................................................. 63

2.5 Stage 4: Estimating private finance mobilisation ........................................ 63 2.5.1 Causality ................................................................................................... 63 2.5.2 Attribution of mobilised private finance to public interventions ................................. 64

2.6 Exploring synergies with the OECD DAC WP-STAT ....................................... 66 2.6.1 Attribution methodology for syndicated loans ....................................................... 67 2.6.2 Attribution methodology for publicly backed guarantees .......................................... 68 2.6.3 Attribution methodology for multilateral donor funds managed by MDBs and MDB finance .. 69 2.6.4 Attribution methodology for collective investment vehicles (CIVs) .............................. 69

3 Actors in Belgian Climate Finance Landscape .............................................. 71

3.1 Actors in Development Cooperation ....................................................... 72 3.1.1 Federal Public Service Foreign Affairs, Foreign Trade and Development Cooperation: The

Directorate-General for Development Cooperation and Humanitarian Aid (DGD) ............. 72 3.1.2 Belgian Technical Cooperation (BTC) ................................................................. 73 3.1.3 Belgian Investment Company for Developing countries (BIO) ..................................... 74


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3.1.4 Flanders Foreign Affairs ................................................................................. 75 3.1.5 Wallonia-Brussels International (WBI) ................................................................. 76

3.2 Actors in Environment and Climate Change .............................................. 76 3.2.1 Federal Public Service of Health, Food Chain Safety and Environment (FPS Environment) .. 76 3.2.2 Environment, Nature and Energy (LNE) ............................................................... 77 3.2.3 Walloon Agency for Air and Climate (AWAC) ......................................................... 78 3.2.4 Brussels Environment .................................................................................... 78

3.3 Actors in Finance, Export and Investment ................................................ 79 3.3.1 FINEXPO .................................................................................................... 79 3.3.2 Delcredere-Ducroire ..................................................................................... 81 3.3.3 Flanders Investment & Trade (FIT) .................................................................... 82 3.3.4 Wallonia Foreign Trade and Investment Agency (AWEX) ........................................... 83 3.3.5 Brussels Invest & Export ................................................................................. 84

3.4 Other Actors .................................................................................... 84 3.4.1 Belgian Corporation for International Investment (BMI/SBI) ...................................... 84 3.4.2 Participatie Maatschappij Vlaanderen (PMV) ........................................................ 85

3.5 Data Availability from the Actors ........................................................... 86 3.5.1 Assessment of data availability ........................................................................ 86

3.6 Conclusion ....................................................................................... 87

4 Results of the Data Assessment ............................................................... 89

4.1 Overview of the results ....................................................................... 89

4.2 Bilateral climate finance ..................................................................... 90 4.2.1 Overview of Belgian bilateral public and mobilised private climate finance ................... 90 4.2.2 Overview and analysis of bilateral instruments directly mobilizing private finance........... 92

4.3 Analysis of the results on bilateral climate finance ..................................... 94 4.3.1 Instrument analysis ....................................................................................... 94 4.3.2 Geographical analysis .................................................................................... 94 4.3.3 Mitigation and adaptation ............................................................................... 96 4.3.4 Mobilisation by non-concessional loans ............................................................... 96 4.3.5 Mobilisation by concessional loans ..................................................................... 97

4.4 Multilateral climate finance ................................................................. 98 4.4.1 Multilateral development banks ...................................................................... 100 4.4.2 Global Environment Facility: first estimate of mobilised private finance by Belgium ....... 100

4.5 Results of the Sensitivity Analyses ....................................................... 102 4.5.1 Value public instruments based on their level of concession ..................................... 102 4.5.2 Disbursements vs commitments ....................................................................... 103 4.5.3 Including export credit insurance instruments ..................................................... 104

5 Recommendations and Lessons Learned ................................................... 107

5.1 Recommendations in relation to the methodology .................................... 107

5.2 Recommendations in relation to the data collection process ....................... 107


33

5.3 Recommendations in relation to the results ............................................ 108

References ............................................................................................ 113

Annex A – The DAC Rio marker methodology .................................................. 117

Annex B – Rio marker methodology DGD ........................................................ 119

Annex C – Rio marker methodology Flanders .................................................. 121

Annex D - Case Study 1: Support to the Vietnam National Green Growth Strategy.... 123

Annex E - Case Study 2: Rajasthan Sun Technique Energy .................................. 127

Annex F - Case Study 3: Support to the Sustainable Caribbean Basin Private Equity Fund .................................................................................................... 131

Annex G - Case Study 4: Ngong Hills Wind Farm Kenya ...................................... 135


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List of Tables Table 1 - Overview of Belgian public climate finance and direct mobilisation of private climate finance 7 Table 2 - Overview of Belgian bilateral public and private climate finance in 2013-2014 (EUR millions) . 8 Table 3 - Proposed attribution methods by OECD DAC WP-STAT ............................................... 67 Table 4 - Required data for quantification ......................................................................... 86 Table 5 - Overview of Belgian public climate finance and mobilisation of private climate finance ...... 89 Table 6 - Overview of Belgian bilateral public and mobilised private climate finance (EUR millions) ... 91 Table 7 - BIO’s non-concessional loans (EUR millions) ........................................................... 93 Table 8 - Finexpo’s interest rate subsidies (EUR millions) ....................................................... 93 Table 9 - Overview of bilateral public and mobilised private climate finance by Belgium to Non-Annex I

countries, ODA recipient countries, LDCs and SIDS (EUR millions) ............................................. 95 Table 10 – Public financial support: contributions through multilateral channels in 2013 and 2014 ...... 99 Table 11 – Climate-relevancy of MDB portfolios in 2014 (USD million) ....................................... 100 Table 12 – Extrapolated climate-relevancy of Belgium’s core contributions to the MDBs (EUR) ......... 100 Table 13 – Climate-relevant contributions by Belgium to GEF in 2013-2014 (EUR million) ................ 101 Table 14 – Climate-relevant finance mobilised by GEF in 2013-2014 (EUR million) ........................ 102 Table 15 – Public climate finance at face value and grant equivalent (EUR million) ....................... 103 Table 16 – Public climate finance per instrument at commitment and disbursement level (EUR millions)

........................................................................................................................... 104 Table 17 – Total public climate finance reported and at disbursement level only (EUR millions) ........ 104 Table 18 - Climate-relevant export credit insurance by Delcredere-Ducroire, 2013-2014 ................ 105 Table 19 - Total mobilised private finance, excluding and including export credit insurance (EUR

millions) ................................................................................................................. 105


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List of Figures Figure 1 - Four-stage framework and overview of decision points for this pilot study. ...................... 4 Figure 2 - Landscape of relevant climate finance providers in Belgium ........................................ 6 Figure 3 - Four-stage framework and overview of decision points ............................................. 44 Figure 4 - Overview of the methodological choices for this pilot study ....................................... 45 Figure 5 - Comparative overview of recipients on the Non-Annex I countries list and the OECD DAC list 50 Figure 6 - Typology of public interventions mobilising private finance ........................................ 54 Figure 7 - Moments of measurement and decreasing amounts of finance ..................................... 56 Figure 8 - Example of an export credit (state-to-state loan) .................................................... 60 Figure 9 - Example of an export credit insurance ................................................................. 61 Figure 10 - Example of a syndicated loan. ......................................................................... 68 Figure 11 - Landscape of relevant climate finance providers in Belgium ..................................... 71 Figure 12 – Public bilateral grants per region and to LDCs....................................................... 90 Figure 13 - Bilateral public climate finance provided by Belgium per instrument and region (EUR

millions) .................................................................................................................. 92 Figure 14 - Mobilisation of private finance per bilateral instrument (EUR millions, 2013-2014) .......... 94 Figure 15 - Mobilisation of private finance by bilateral instruments per region (EUR millions, 2013-2014)

............................................................................................................................ 94 Figure 16 - Mobilisation of private finance by bilateral instruments to LDCs and others (EUR millions,

2013-2014) ............................................................................................................... 95 Figure 17 - Mobilisation of private finance by bilateral non-concessional loans, per region and

mitigation/adaptation (EUR millions, 2013-2014) ................................................................. 96 Figure 18 - Mobilisation of private finance by bilateral concessional loans, per region and

mitigation/adaptation (EUR millions, 2013-2014) ................................................................. 97 Figure 19 – Illustration of calculations for mobilised private finance by Belgium via multilateral channels

........................................................................................................................... 101 Figure 20 –Rio marker methodology as applied by DGD ......................................................... 119 Figure 21 –Rio marker methodology as applied by Flanders .................................................... 121


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List of Abbreviations ADB Asian Development Bank

AfDB African Development Bank

AGF High-level Advisory Group on Climate Change Financing

AWAC Walloon Agency for Air and Climate

AWEX Wallonia Foreign Trade and Investment Agency

BE Belgium

BIO Belgian Investment Company for Developing countries

BMI/SBI Belgian Corporation for International Investment

BTC Belgian Technical Cooperation

CCXG Climate Change Expert Group

CDM Clean Development Mechanism

CIF Climate Investment Fund

CIVs Collective Investment Vehicles

CLFR Compact Linear Fresnel Reflector technology

COP Conference of Parties

CPI Climate Policy Initiative

CSP Concentrated Solar Power

DAC Development Assistance Committee

DE Germany

DFI Development Finance Institution

DGD Directorate-General for Development Cooperation and Humanitarian Aid

EBRD European Bank for Reconstruction and Development

ECOFIN Economic and Financial Affairs Council

EDF European Development Fund

EDFI European Development Finance Institutions

EE Energy Efficiency

EIB European Investment Bank

EU European Union

EU ETS European Union Emissions Trading System

EUR Euro

FAO Food and Agricultural Organisation

FIT Flanders Investment & Trade

FMO Nederlandse Financierings-Maatschappij voor Ontwikkelingslanden (Entrepreneurial

Development Bank Netherlands)

FPS Federal Public Service

FR France

FSF Fast Start Finance

GCF Green Climate Fund

GEF Global Environment Facility

GNP Gross National Product

GW Gigawatt

ICF International Climate Fund

ICRAF International Centre for Research in Agroforestry

IDFC International Development Finance Club


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IEA International Energy Agency

IEEP Institute for European Environmental Policy

IFAD International Fund for Agricultural Development

IFC International Finance Corporation

IFI International Financial Institution

IMF International Monetary Fund

ILO International Labour Organisation

IRENA International Renewable Energy Agency

IUCN International Union for Conservation of Nature

KfW Kreditanstalt für Wiederaufbau (Reconstruction Credit Institute)

LCCR Low-Carbon Climate-Resilient

LDCs Least Developed Countries

LDCF Least Developed Countries Fund

LICs Low Income Countries

LMICs Lower Middle Income Countries and Territories

LNE Environment, Nature and Energy

M Million

MDB Multilateral Development Bank

MRV Monitoring, Reporting, and Verification

NGO Non-Governmental Organization

NPIF Nagoya Protocol Implementation Fund

OCR Ordinary Capital Resources

ODA Official Development Assistance

OECD Organisation for Economic Co-operation and Development

OOF Other Official flows

PMV ParticipatieMaatschappij Vlaanderen NV

RE Renewable Energy

SCCF Special Climate Change Fund

SCF Standing Committee on Finance

SFM/REDD+ Sustainable Forest Management/Reducing emissions from deforestation and forest

degradation

SIDS Small Island Developing States

SME Small and Medium-sized Enterprises

SPV Special Purpose Vehicle

UMICs Upper Middle Income Countries and Territories

UK United Kingdom

UNDP United Nations Development Programme

UNEP United Nations Environment Programme

UNESCO United Nations Educational, Scientific and Cultural Organization

UNFCCC United Nations Framework Convention on Climate Change

USD United States Dollar

TWG Technical Working Group

WBI Wallonia-Brussels International

WP-STAT Working Party on Development Finance Statistics

WTO World Trade Organisation


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1 Introduction In accordance with decisions under the United Nations Framework Convention on Climate Change

(UNFCCC) Conference of Parties (COP) in Durban and Copenhagen, industrialised countries have

committed to jointly mobilise USD 100 billion per year by 2020 to support mitigation and adaptation

actions in developing countries28. This pledge comprises scaled-up, new and additional, predictable and

adequate funding from a wide variety of sources: public and private, bilateral and multilateral,

including innovative sources. In November 2010, the UN Secretary-General’s High-level Advisory Group

on Climate Change Financing (AGF) published its assessment of the potential for climate finance by

202029. The overall conclusion of the AGF’s report is that the goal of mobilising USD 100 billion per year

for climate finance to developing countries by 2020 would be feasible, but challenging. The underlying

assumption of AGF’s conclusion is that the EU’s share in the mobilised capital could be about one third

of the overall amount.

In spite of this ‘climate finance’ commitment, there is no international agreement on the types of funds

and instruments that can be defined as mobilised under this commitment. In particular, it remains

unclear which private finance flows could be considered under the UNFCCC agreements as having been

mobilised for climate-related mitigation and adaptation action in developing countries. Consensus

amongst stakeholders about international standards for definitions and measurement methodologies for

private climate finance mobilised by developed country public interventions is important and the

starting point for a successful joint effort. This has been the subject of discussions in Economic and

Financial Affairs Council (ECOFIN) and the Organisation for Economic Co-operation and Development

(OECD) meetings and is part of the UNFCCC negotiations. Institutions such as the OECD and the

Multilateral Development Banks have developed methodological approaches which can be further

refined. At this moment, Parties make use of different definitions of, as well as applying different

methodologies for tracking (public and private), climate finance. The recent ministerial declaration

(ahead of COP-21 in Paris) is a strong step towards harmonising the methodology for calculating the

mobilised private sector climate finance30.

Current developments in tracking and understanding climate finance

There are several initiatives by donors, civil society and academic actors to improve the understanding

of climate finance. These can be divided into four topics31:

1. Tracking international climate finance flows – this has been a major field of research since the

Copenhagen Accord.

2. The aid effectiveness of climate finance – the Busan Partnership (OECD) linked climate finance to

development cooperation, indicating that principles and targets similar to those for aid

effectiveness can be used to assess climate finance.

28 Of the industrialised or Annex I countries, there are 24 countries that have committed to the pledge. They are listed in Annex II of the UNFCCC. The Parties include OECD-members and the European Economic Community. available at: https://unfccc.int/essential_background/convention/background/items/1348.php 29 United Nations (2010), ‘Report of the Secretary-General’s High-Level Advisory Group on climate change financing’ http://www.un.org/wcm/webdav/site/climatechange/shared/Documents/AGF_reports/AGF%20Report.pdf 30 U.S. Department of State, ‘Joint Statement on Tracking Progress Towards the $100 billion Goal Paris, France, 6 September 2015’ available at: http://www.state.gov/documents/organization/246878.pdf 31 Bird et al. (2013), ‘Understanding climate change finance flows and effectiveness - mapping of recent initiatives’ http://www.oecd.org/dac/environment-development/2013%20ODI_Understanding%20climate%20finance%20-%20FINAL.pdf


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3. National delivery of climate finance – in mid-2011, analysis started to focus on the government

budgetary system as the principal mechanism whereby climate change policies are resourced and

finance is channelled.

4. Knowledge sharing platforms – these have emerged more recently, bringing practitioners together

at national, regional and global levels to improve coordination and allocation of climate finance.

Information on private sector and carbon market finance flows is mostly gathered by a few commercial

data providers, namely Bloomberg New Energy Finance (BNEF), Deutsche Bank Research and

PointCarbon. Besides these, there are a growing number of initiatives and online platforms on climate

finance reporting and tracking. The most significant international initiatives are:

• UNFCCC launched a Finance Portal in 2011, which includes information from UNFCCC Parties (e.g.

National Communications, Fast Start Finance) and flows from the Global Environment Facility (GEF)

funds (LDCF, Special Climate Change Fund (SCCF), Trust Fund), and a list of adaptation initiatives.

At the COP-16 in Cancun, the Parties decided on the establishment of a Standing Committee on

Finance (SCF) for assisting the COP on the Financial Mechanism of the Convention. This involves

improving coherence and coordination in the delivery of climate finance, rationalisation of the

Financial Mechanism, mobilisation of financial resources and measurement, reporting and

verification of support provided to developing country Parties;

• OECD-DAC has information on all Official Development Assistance (ODA) and Other Official Flows

(OOF) from the DAC member countries and screens the climate-relevance of these flows with the

Rio markers. The DAC is also increasingly tracking multilateral development flows. In 2013, a Joint

Task Team was established to improve statistics on the Rio markers, environment and development

finance;

• The Climate Change Expert Group (CCXG, supported by OECD and IEA) has published papers such as

‘Tracking Climate Change: What and How?’ (2012), focusing on how to measure and track the

climate finance flows that can be counted towards the USD 100 billion pledge, and ‘Comparing

Definitions and Methods to Estimate Mobilised Climate Finance’ (2013), examining the range of

definitions and methodologies that are in use within the international community;

• Global Landscape of Climate Finance is an initiative developed by the Climate Policy Initiative

(CPI), and is the most comprehensive inventory of (public) climate finance to-date, produced with

annual reporting updates since 2011;

• Climate Finance Options is a joint initiative by the UNDP and World Bank to provide information on

the financial options for climate action in developing countries;

• Research Collaborative on Tracking Private Climate Finance was launched in 2011 by the OECD to

facilitate knowledge sharing on methodologies to track private climate finance (including the flows

mobilised by public interventions), with operational work streams since 2013. The (on-going) work

of the Research Collaborative, includes the establishment of the four-stage methodological

framework, which forms the backbone of this study (more details are provided in Chapter 3);

• Global Trends in Renewable Energy Investment is an annual report on finance for renewable

energy by the Frankfurt School – UNEP Centre for Climate & Sustainable Energy Finance.

The OECD Environment Secretariat, in collaboration with the Climate Policy Initiative (CPI), published

the report ‘Climate Finance in 2013-14 and the USD 100 billion goal’ (2015) which provides an estimate

of public and private climate finance mobilised by developed countries towards their UNFCCC 2010

Cancun commitment, for climate action in developing countries in 2013 and 2014. Public and private


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finance mobilised were estimated at USD 62 billion in 2014, up from USD 52 billion in 2013 and making

an average of USD 57 billion annually over the 2013-2014 period.

Belgium’s commitments in the international context

During the Fast Start Finance (FSF) period (2010-2012), Belgium spent EUR 92.56 million on

international climate finance (with a EUR 150 million target), of which 84% was provided by the Federal

government. Most of the funds from the Federal government went to multilateral funds and

international organisations, such as the SCCF, LDCF and SFM/REDD+ managed by the Global

Environment Facility (GEF), the UNDP, Oxfam and FAO. EUR 20 million was invested through BIO-Invest.

The Government of Flanders primarily channelled its funds through international organisations, and the

Flemish Partnership Water for Development. The Walloon government has mainly funded bilateral

programmes in French-speaking Africa, while the Brussels region provided € 1.2 million to the

Adaptation Fund.

After the FSF period, Belgium agreed with other developed countries to commit at least the same level

of international climate finance in the period 2013-2015 as in 2010-2012, meaning at least EUR 50

million a year32. This will need to be scaled up in the future to reach a similar contribution to the

international commitment of providing USD 100 billion annually by 2020. According to a study by the

Institute for European Environmental Policy (IEEP) “Exploring Belgium’s Contribution to International

Climate Finance after 2012” (2012), the Belgian contribution to international (public) climate finance

could be in the range of USD 127 million to USD 539 million per annum by 202033. In a second phase,

this report also identified several new sources of public climate finance that could be implemented (but

are currently not implemented), such as a tax on airline tickets and EU ETS revenues.

The purpose of this report

The potential private finance sources for climate-friendly investments were not part of the IEEP-led

study. In order to realise the ambitious targets in terms of GHG emissions reduction at a Belgian level,

as well as to contribute to the international commitments on climate finance, it is of the utmost

importance to explore the potential contributions of non-public investment sources as well. Having a

better understanding of the mobilisation of private climate finance will be important for better

informed policy decision-making and necessary follow-up after the adopted Paris Agreement (COP-21).

This project provides a response to this gap and builds an overview of private climate finance mobilised

by Belgium in the context of the USD 100 billion commitment. This study includes evidence-based

results, outputs and insights into private sources for low-carbon investments made in developing

countries, building upon the OECD’s Research Collaborative framework for estimating mobilised private

finance for climate action in developing countries.

32 Schiellerup, P. and K. Geeraerts (2012) ‘Exploring Belgium’s Contribution to International Climate Finance after 2012’, Institute for European Policy (IEEP), London, available at: http://www.klimaat.be/files/1213/8253/2210/IEEP_Exploring_Belgium_s_Contribution_to_International_Climate_Finance_After_2012.pdf 33 Schiellerup, P. and K. Geeraerts (2012) ‘Exploring Belgium’s Contribution to International Climate Finance after 2012’.


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Structure of the report

This report has the following structure:

• Chapter 2 describes the methodological options that need to be chosen to arrive at a methodology

to calculate mobilised private climate finance, and evaluates them on validity, transparency,

accuracy, practicality and potential for international standardisation. The methodological options

form the basis for the Belgian framework that is elaborated in Chapter 2. The methodological

framework is based on the methodological choices that have been agreed upon by an international

group of 19 countries that provide (public) climate finance to developing countries in the context of

the OECD-CPI report. In addition to this framework, several sensitivity analyses have also been

conducted, these are also explained here;

• Chapter 3 maps the actors in Belgium that have the potential to mobilise private climate finance for

developing countries and gives an overview per actor of the financial instruments, mobilisation

potential and bottlenecks for collecting the data;

• Chapter 4 gives an overview of the quantification of mobilised private climate finance due to public

sector interventions, based on the available data, as well as providing detailed analysis and insights

into the mobilisation potential of certain instruments and actors, the origin of climate mitigation

and adaptation finance in 2013 and 2014, and how specific options and choices under the

methodological framework (see Chapter 2) impact the data assessment via sensitivity analyses;

• Finally, Chapter 5 provides an overview of the main conclusions and observations of this study. This

chapter highlights some of the key lessons learnt and provides concrete recommendations for future

improvements of Belgium’s MRV framework for climate finance. For example, recommendations are

made on possible improvements on the data collection process and on the methodological

framework for tracking and reporting on mobilised private climate finance.


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2 Methodological Framework for Belgium There is no internationally agreed methodology for measuring and reporting mobilised private climate

finance. The OECD Research Collaborative on Tracking Private Climate Finance has developed a

decision framework for developing such a methodology34 and very recently most OECD countries have

adopted a common understanding as a basis for going forward35. The Research Collaborative is an

informal network, coordinated and hosted by the OECD Secretariat, of governments, research

institutions and international finance institutions, and aims to partner and share best available

expertise, data and information to advance policy-relevant research on tracking private climate finance

in a timely manner.

Up to the end of 2014, the Research Collaborative on Tracking Private Climate Finance had focussed on

exploring the availability of climate-specific private finance data beyond renewable energy, as well as

identifying and assessing methods to estimate mobilised private climate finance. In terms of methods to

estimate private climate finance mobilisation, different approaches have been tested based on initial

research and work carried out by the Climate Change Expert Group (CCXG)36 which ran in parallel to

research done by the OECD DAC on data collection for public finance instruments (guarantees,

syndicated loans and equity shares in funds) with the aim of building synergies with work on

development finance statistics.

The OECD four-stage methodological framework

The OECD-WRI synthesis report on learning to date37, as well as the OECD-WRI Policy Perspectives

summary brochure, are the final documents for the 2013-2014 cycle of work of the Research

Collaborative. Both documents describe a four-stage framework as well as the key decision points that

are involved in estimating mobilised private climate finance. These documents were used as the basis

of this study. The decision point numbers (A1-A11, D1-D9) are mentioned throughout this chapter for

easy reference to the original OECD paper.

Figure 3 gives an overview of the main decision points that have been researched as part of the OECD-

led Research Collaborative, and presented as part of the OECD four-stage framework. In Stage 1 of the

framework, the core concepts have to be defined. This entails definitions of climate finance, and what

can be considered as mobilised private climate finance. In Stage 2 of the framework, decisions need to

be made on what kind of public interventions are taken into account when calculating private climate

finance mobilisation. Stages 3 and 4 of the framework, which are the more technical stages, set the

framework for the quantification exercise. Stage 3 defines how public interventions can be measured,

while Stage 4 describes the attribution of private climate finance to different donors in multilateral

funds, and how to quantify the causality between public interventions and private finance.

34 OECD (2015), "Estimating mobilised private climate finance: methodological approaches, options and trade-offs’, available at: http://dx.doi.org/10.1787/5js4x001rqf8-en 35 U.S. Department of State, ‘Joint Statement on Tracking Progress Towards the $100 billion Goal Paris, France, 6 September 2015’. 36 Caruso, R. and J. Ellis (2013), ‘Comparing Definitions and Methods to Estimate Mobilised Climate Finance’, OECD/IEA Climate Change Expert Group Papers, No. 2013/02, OECD Publishing, Paris. 37 Jachnik, R., R. Caruso and A. Srivastava (2015), ‘Estimating Mobilised Private Climate Finance: Methodological Approaches, Options and Trade-offs’, OECD Environment Working Papers, No. 83, OECD Publishing, Paris.


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Figure 3 - Four-stage framework and overview of decision points38

2.1 Methodological framework for this Belgian pilot study

The OECD’s four-stage framework has been the core of the methodological framework for this Belgian

pilot study. The OECD’s four-stage framework describes methodological considerations and options for

attributing public finance and mobilised private finance flows and instruments to climate-relevant

project level data. The aim of this methodological framework is to conceptualise the Belgian specific

context and practicalities, in the perspective of the harmonised approach for tracking mobilised private

climate finance among the wider group of international donors. While analysing the various options that

are available for each of the decision points, it was agreed to take into consideration the discussions

within the Technical Working Group (TWG) that have taken place among a group of 19 OECD members

and climate finance providers. The TWG aimed to develop a harmonised perspective on the different

decision points within the OECD’s four-stage framework and provided input to the Inter-Ministerial

meetings on climate finance towards the COP-21 in Paris. For some of the framework’s decision points,

the preferred options by the TWG still leave room for different interpretations and approaches by the

OECD Members.

For this study, a Steering Committee has been formed which consisted of (at least) one representative

from each of the main climate finance providers in the Belgian climate finance landscape (see Chapter

3). The objective of the Steering Committee meetings was to arrive at a workable approach to

measuring and reporting on private climate finance mobilised by Belgium. Three Steering Committee

meetings have been organised throughout this project, in which all the options for the different

38 Based on: Jachnik, R., Caruso, R., Srivastava, A. (2015), "Estimating mobilised private climate finance: methodological approaches, options and trade-offs", OECD Environment Working Papers, No. 83.


45

decision points under the OECD’s four-stage framework were discussed and assessed on validity,

accuracy, practicality, potential for standardisation and how they affect incentives. Since the TWG

discussions were held in advance of the Steering Committee discussions, the TWG decisions were

reflected and discussed during the Steering Committee meetings, although on various decision points a

similar view and preferred option was selected. If the TWG did not express a clear preference for one

of the decision point options, the interpretation or approach of the current practice in Belgium was

selected. In order to assess the implications of the preferred options on some of the decision points

several sensitivity analyses have been carried out.

The following sections describe the preferred choice for each of the methodological options, including

the reasons for the choices made and their implications, and assesses the implications in terms of

validity, transparency, double-counting, replicability and practicability. Specifically, the next sections

describe each of the stages in more detail, including the different options and considerations, and

frame the decisions that have been made by Belgium for the sake of this specific project as an input for

the methodological framework. Figure 4 below gives an overview of all the methodological choices

related to the four-stage framework as chosen for this study.

Figure 4 - Overview of the methodological choices for this pilot study


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2.2 Stage 1: Defining core concepts

This stage highlights definition options for climate-relevant activities, the classification of public and

private finance, and assigning the geographical origin of finance.

2.2.1 Definition of climate-relevant (D1, D2)

There is no universal definition for climate finance (also referred to as LCCR; low-carbon climate-

resilient finance). There are however a few definitions that are broadly accepted:

1) the OECD-DAC definitions of climate change mitigation and adaptation which are applied by the

Rio markers to measure and report on climate-relevant Official Development Aid (and also

increasingly Other Official Flows);

2) the definitions used by Multilateral Development Banks (MDBs) for their Joint Report on MDB

Climate Finance39 and the International Development Finance Club (IDFC) Green Finance Mapping.

The Rio markers consider that interventions are climate relevant if they meet OECD DAC’s definitions40

and are based on the objective of the project. The project should have climate mitigation or

adaptation as the principal or a significant objective. If a “principal” marker is given, 100% of the

finance is reported as climate finance. With a “significant” marker, a smaller percentage is usually

taken41.

In the Joint Report of the MDBs, a list of activities is considered climate mitigation finance. The climate

adaptation approach is too context-specific for a general list, and is therefore based on an assessment

of the purpose, context and activities in light of climate vulnerability42. Then the climate relevant part

is considered to be 100% climate relevant. The OECD-DAC and international finance institutions are

involved in a dialogue to find possible convergence and harmonisation between these approaches.

Both methods have the same basic principles. They both look at commitments (contractual, financial

obligation of an approved project) and strictly separate own resources from external resources to avoid

double-counting. The two main differences between the two systems are related to 1) granularity:

MDBs’ screening operates at the level of project components while Rio markers are applied at the

overall project level; and 2) objectivity: MDBs’ methodology is based on a “positive” list of activities

for mitigation, and on more restrictive criteria for adaptation than Rio markers43.

39 The MDBs have created a list of sectors that are considered climate mitigation, which broadly include: energy efficiency; renewable energy; transport; agriculture, forestry and land use; waste and wastewater; non-energy GHG reductions; cross-sector activities and others (e.g. policy, energy audits, R&D). They have a similar but more indicative list of climate adaptation activities. 40 Definitions from Handbook on the OECD-DAC Climate Markers (OECD 2011): Climate mitigation: “The activity contributes to a) the mitigation of climate change by limiting anthropogenic emissions of GHGs, including gases regulated by the Montreal Protocol; or b) the protection and/or enhancement of GHG sinks and reservoirs; or c) the integration of climate change concerns with the recipient countries’ development objectives through institution building, capacity development, strengthening the regulatory and policy framework, or research; or d) developing countries’ efforts to meet their obligations under the Convention. The activity will score “principal objective” if it directly and explicitly aims to achieve one or more of the above four criteria. Climate adaptation: “It intends to reduce the vulnerability of human or natural systems to the impacts of climate change and climate-related risks, by maintaining or increasing adaptive capacity and resilience. This encompasses a range of activities from information and knowledge generation, to capacity development, planning and the implementation of climate change adaptation actions.” a) The climate change adaptation objective is explicitly indicated in the activity documentation; and b) The activity contains specific measures targeting the definition above. 41 This depends on the OECD member. In Germany 50% is assigned, while The Netherlands and the European Commission count 40%. 42 Joint Report on MDB Climate Finance 2014. 43 See for more information: OECD 2013 Workshop with International Financial Institutions (IFIs) on Tracking Climate Finance - Main Points of Discussion.


47

Example: The World Bank invests EUR 100 million in an agricultural project in Kenya. One of the

objectives is to reduce methane emissions from the livestock sector. For this specific part of the

project, €10 M is invested.

Options Rio Markers Joint Report Development of a new definition

Method

The project receives a Rio marker “mitigation significant”. A certain percentage of the project finance is thus reported as climate finance, i.e. if

40% is chosen, EUR 40 million.

Only EUR 10 million is reported as climate finance.

This method would have to be developed further before an example can be given.

Considerations

+ Very practical; already in use + Easily standardised, used for public reporting by most OECD members - Open for interpretation, which limits

comparability - Only allows for rough estimations, relatively low validity

- Somewhat less practical, currently not implemented by OECD members - The exact amount chosen for ‘climate relevant’ is also an

estimation + Allows standardisation (for mitigation) + Allows for more accuracy

- Very impractical, as the two other methods are

already in use

Considerations in the Belgian context

All Belgian political entities currently define climate-relevant activities according to the Rio markers,

developed by the OECD DAC. However, the way these markers are used is currently not harmonised.

The federal government (i.e. DGD) currently works with the Rio Markers, but fine-tuned with its own

system (weighing factors) to prevent double counting between the markers and by using variable

percentages for the ‘significant’ category:

1. If “principal” markers are given for both climate mitigation and climate adaptation, the money is

divided equally between the two markers (both get 50%).

2. If “significant” markers are given, specific percentages are allocated to climate mitigation,

climate adaptation, biodiversity and desertification. These percentages are established for all

activities that are earmarked as climate-relevant.

The methodology applied by DGD also divides the public spending over the three Rio goals in order to

avoid ‘double counting’. In this methodology the rough indication of ‘significant’ is fine-tuned by

applying varying weighting factors per subsector (usually between 0-40%) based on its sector code.

There are a few exceptions in energy-related sectors which have weighting factors for mitigation of 50,

80 or 100. The Rio markers are applied per project, with the weighting factors applied per sector44.

The application of the Rio marker-methodology applied by the region of Flanders is aligned to the

interpretation and application used by the European Commission. Therefore, they apply the Rio marker

system in the following way45:

1. Principal marker: 100%; significant marker: 40%

2. Correction if both climate markers are applied:

a. Both principal: both 50%;

b. One principal and one significant: principal 100%; significant 0%;

c. Both significant: both 20%.

44 A full description of the application of the Rio marker-methodology by DGD is included in Annex B of this report. 45 A full description of the application of the Rio marker-methodology by the Region of Flanders is included in Annex C of this report.


48

The Walloon region and the region of Brussels-capital do not use such a methodology at the moment.

Their only criterion is that what is counted as climate finance should not be counted as ODA, and vice-

versa. The Walloon region currently reports on their core contributions to climate-relevant multilateral

funds (i.e. the Adaptation Fund and the Green Climate Fund) as part of their ODA funding.

Selected option:

In order to achieve comparability with other estimates of international climate finance, it was agreed

within the Steering Committee that the Rio marker methodology is the most suitable and available

option for assessing the climate-relevance of both public and private finance. It should be mentioned

that the Rio marker’s approach was initially not meant to assess climate finance flows, but rather to

mainstream climate-relevant objectives, and therefore applying the Rio marker-methodology only

provides a ‘rough’ estimate of the climate-relevancy of a specific project. Within the TWG the decision

reached was to let countries use their national interpretation and approach to assess the climate-

relevancy of projects. As such, the Steering Committee decided to use the application of the Rio

marker application that each of the (individual) climate finance providers already use in their

development finance reporting to the OECD DAC and public climate finance reporting to the UNFCCC. In

other words, for each of the actors their ‘own’ application of the Rio marker-methodology has been

taken into account when working through the quantification under the data assessment (Chapter 4).

2.2.2 Definition of public and private finance (D3, D4, D5)

Most reporting on climate finance considers government entities and their associated development

finance institutions and funds as public sector entities. The OECD DAC has the following definition for

public finance (“official flows”): “Official transactions are those undertaken by central, state or local

government agencies at their own risk and responsibility, regardless of whether these agencies have

raised the funds through taxation or through borrowing from the private sector. This includes

transactions by public corporations (i.e. corporations over which the government secures control by

owning more than half of the voting equity securities or otherwise controlling more than half of the

equity holders’ voting power) or through special legislation empowering the government to determine

corporate policy or to appoint directors”46.

For most entities, it is clear whether they are public or private. There are however certain types of

entities that form a mix between public and private characteristics (e.g. Public Private Partnerships

(PPPs)) and special purpose vehicles or companies which are publicly owned but operate as a

commercial entity with a profit motive. In addition, development finance institutions often attract both

public and private money from the capital markets, which means their investments in climate projects

consist of both public and private money.

There are several options for defining public and private finance:

1. Based on shareholders (if more than 50% of the shareholders are public actors, the entity is

considered public);

2. Based on level of control (when the board of the entity consists of public stakeholders that

influence the operations);

3. Based on the amount of risk carried;

4. Pre-agreed set of actors.

46 OECD (2013), ‘Converged Statistical Reporting Directives for the Creditor Reporting System (CRS) and the Annual DAC Questionnaire’, 11 June 2013, p. 7.


49

Constructions exist that require more thought than this simple division, such as the following:

• Financial flows from Multilateral Development Banks (MDBs) and Development Finance

Institutions (DFIs) usually only have public shareholders, but they do attract private finance from

the capital market to invest in climate projects. Technically, their project finance consists of both

public and private money. Instead of considering 100% of their financial flows as public money,

one could also apportion the finance provided by the actors based on the proportion of its funding

originating from public and private resources. Practically, this is impossible as there is no data

available.

• Some state-owned enterprises (SOEs) operate according to purely commercial principles (profit

driven) within a competitive market and they are therefore more similar to private companies

than public entities.

• Non-Governmental Organisations (NGOs) and philanthropic institutions for development

assistance and relief can be private entities, but they do not operate under purely commercial

principles within a competitive market (no profit earmark). They are more similar to public

entities than private companies.

Selected option:

For most entities in the Belgian climate finance landscape, it is clear whether they are public or

private. It has been decided within the Steering Committee to be guided by the shareholder structure

as a basic rule: if more than 50% of the shareholders are public, the entity is considered public (in

accordance with the OECD DAC standard definitions). During the Steering Committee meetings, several

considerations were discussed with regard to the position and status of NGOs, charitable private funds

and the Belgian National Lottery. Suggestions were made regarding the development of separate

categories of actors that are not solely public nor private entities. As part of the data collection

exercise, an effort was made to differentiate between finance with a profit motive and a

philanthropic/not-for-profit motive. Since the financial data reporting in the current Belgian reporting

system does not allow this differentiation to be made, the Steering Committee decided that if more

than 50% of the shares of an organisation are public, it should be regarded as public unless the

operations are 100% commercial, with a profit objective.

2.2.3 Classification of developed and developing countries (D6)

Industrialised countries have committed to mobilise finance for climate action in developing countries.

The public interventions should therefore come from industrialised countries. The UNFCCC uses a

classification based on the commitments under the UNFCCC. Annex I (including Annex II47) are

developed (“industrialised”) countries only. The rest of the world, i.e. developing countries are Non-

Annex I countries. This classification can be used to define “developed” and “developing” countries.

However, the list dates from 1992 and is arguably outdated. Several Non-Annex I countries have made

significant economic development since 1992. An alternative approach is to use the regularly updated

list for ODA recipients. Figure 5 provides a comparative overview of recipient countries that are on the

Non-Annex 1 list, but not on the OECD DAC list of ODA recipients, and vice versa. A revision of the

UNFCCC classification has been discussed during the latest international climate negotiations (e.g. the

State of Palestine became a Party to the UNFCCC and the Kyoto Protocol during the COP-21 in Paris).

47 There are 24 Parties to the UNFCCC listed in Annex II of the Convention. They have an obligation to provide financial resources and technology transfer to developing countries. The Parties are also part of Annex I and include OECD-members and the European Economic Community. The list is available at: https://unfccc.int/essential_background/convention/background/items/1348.php


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Figure 5 - Comparative overview of recipients on the Non-Annex I countries list and the OECD DAC list

An important point to take into consideration is the acceptability of developing countries with regard to

their role and positioning on the list of ODA recipients. The least developed countries (LDCs) are often

considered as a priority group for the delivery of climate finance. At the same time, it may not be

acceptable to exclude some of the Non-Annex I countries, because that would diverge from the UNFCCC

classification. Another important element is that the Annex I and Non-Annex I classification is politically

sensitive and might no longer apply under the international climate negotiations in the (near) future.

Selected option:

Within the Steering Committee it was decided that countries that are listed on the Non-Annex I and

OECD DAC lists should be classified as ODA recipient countries, as per Figure 5 above. Following an

assessment of the data received from the different Belgian climate finance providers, it turns out that

most recipient countries of Belgian ODA are on both listings. Moreover, it was agreed within the

Steering Committee to differentiate to specific groups of Non-Annex I countries to the extent possible

with the current data available for this study. Specific emphasis for this differentiation will be on the

LDCs and SIDS as they are an important group of countries among the ODA recipients.

2.2.4 Geographical origin of private finance (D7, D8, D9)

The decision on what can be considered as mobilised private finance is very politically sensitive, when

we talk about the geographic origin of private finance, especially in the light of the international

commitment to mobilise USD 100 billion per year by 2020. Private climate finance can be mobilised

from a source within a developed country, from a source within the recipient country, or from a source

in other developing countries. Developing countries are interested not only in the transfer of

international private finance to projects within their country, but also in the mobilisation of domestic

private finance to these climate projects, as witnessed in the present emphasis of the Private Sector


51

Facility of the Green Climate Fund (GCF) that focusses on support to Small and Medium-sized

Enterprises (SMEs) and Financial institutions (FIs) in developing countries. To illustrate this issue, we

have come across projects where South African or Chinese investors invest in Kenya as easily as they

invest in OECD countries.

The following three options can be identified as available for this specific decision-point:

• Option 1: Include all private climate finance – the reasoning behind this option is that private

finance is not limited by country borders and as such the origin of private finance is irrelevant.

The down side of this approach is that all (domestic) private finance from within developing

countries is taken into account in the private finance mobilisation as well and as such would be

included in the USD 100 billion pledge;

• Option 2: Include private climate finance from developed countries only – the reasoning behind

this option is that the international commitment to mobilise the USD 100 billion per year by 2020

has been pledged by the developed countries and hence ‘only’ private finance from actors within

developed countries should count towards this target;

• Option 3: Include all private climate finance except for private finance from within the

developing country (local companies) - this option is a mixture between options 1 and 2 by

differentiating between domestic (local) private finance and international private finance,

wherever the origin is a developed or developing country. Under this option, for example, the

private finance mobilised in South Africa for a climate project in Malawi would be considered to

be part of the international private finance pledge.

Selected option:

Since there is very little data available on private climate finance, let alone data on the geographical

origin of it, the only practical solution and realistic option at this point in time it to include all private

finance as based on the available Belgian data, no disaggregation was possible (this is the case for most

OECD Member countries). Therefore, it was decided within the Steering Committee that all private

finance will be taken into account when calculating the mobilised private climate finance, including

‘in-country private finance’ and disaggregate, where possible, mobilised international finance into

North-South and South-South flows. During the Steering Committee meetings, several issues were

discussed with regard to the status of the mobilisation factor. From the point of view of mobilising

finance for climate change, it is the total mobilised finance – international and domestic, which is

relevant. When local branch offices are used for investing it is not always clear what origin of private

finance should be chosen. Following several technical discussions in the Steering Committee meetings it

was decided that the origin of finance will be based on the headquarter location of the ultimate parent

of the entity. This is the preferred option of the TWG.

2.3 Stage 2: Identify public interventions and instruments

In order to be included in this study, private climate finance should be mobilised by the public

intervention in accordance with the EU’s common understanding of ‘mobilised private climate finance’,

as outlined in the European Commission’s latest report on delivering on their commitment to scale-up

climate finance48, which specifies that these financial flows are:

48 European Union (2015), “European Union Climate Funding for Developing Countries – 2015”, available at: http://ec.europa.eu/clima/publications/docs/funding_developing_countries_2015_en.pdf


52

1) mobilised by public finance, or by a public intervention, including in the sphere of policy and

regulatory reform;

2) climate relevant in accordance with criteria used by relevant international organisations such as

the OECD and Multilateral Development Banks (cf. ECOFIN Council Conclusions, October 201449);

and

3) mobilised private climate finance are funds from private parties invested in climate-relevant

activities that are facilitated or would not have happened without public sector (financial) support

from developed countries to developing countries.

Types of public interventions and instruments

There are broadly two types of interventions that can mobilise private climate finance50:

• Policy support: public support to policy and policy instruments (e.g. develop legal framework,

setting up a ‘feed in tariff’, institutional strengthening, project preparation, etc.) and

• Project support: public financial support at project level, where money is directly given for

project execution.

In the first category, it is often very difficult to directly ascribe a certain amount of private finance to

the public intervention due to the time lag between the public intervention and the actual spending of

financial flows. For example, a feasibility study for a geothermal power plant in Indonesia now might

only result into the actual development of this power plant in 10 years’ time. In the latter, the link

between the public support and the mobilised private co-investment is much easier. However, if only

public project support interventions are included, there might be fewer incentives for the public sector

to invest in policy support interventions, even though these can be more effective in the long term51.

For both types of interventions different instruments can be relevant. Policy and regulatory support is

mainly provided through technical assistance financed by grants. Grant finance also dominates in

project preparation support, whereas non-grant instruments are more common in project

implementation. All public interventions are important in mobilising private climate finance and are

therefore, ideally, taken into account. However, from a practical point of view it is very difficult (if not

impossible) to define the causality between the first category of public interventions (e.g. policy

support, technical assistance, capacity building, etc.) and the mobilisation of (direct) private finance

for a project due to the time lag between the public intervention and the actual climate project. The

risk of double-counting is also relatively high, as the time lag makes it very difficult to determine which

public intervention can be classified as contributing to the private finance mobilisation, as well as what

role policy support played in getting a climate project co-funded by the private sector. I.E the causal

link between the public project support (second category of public interventions) and the private co-

funding for specific climate projects is not easy to establish. However, the funding of policy support

actions and project preparation are an important element when developing climate interventions, and

as such they should not be under-valued.

49 European Council (2014), “Press Release – Conclusions of the ECOFIN Council meeting of 14 October 2014”, available at: http://www.consilium.europa.eu/ueDocs/cms_Data/docs/pressData/en/ecofin/145105.pdf 50 Trinomics (2014), “Pilot Tracking Mobilised Private Climate Finance by the Netherlands”, available at: http://trinomics.eu/wp-content/uploads/2015/06/Pilot-Tracking-Mobilised-Private-Climate-Finance.pdf 51 Jachnik, R., R. Caruso and A. Srivastava (2015), "Estimating Mobilised Private Climate Finance: Methodological Approaches, Options and Trade-offs", OECD Environment Working Papers, No. 83, OECD Publishing, Paris, available at: http://www.oecd-ilibrary.org/environment/estimating-mobilised-private-climate-finance_5js4x001rqf8-en


53

If mobilisation is measured only for public finance for project implementation, this leads to an

overestimation of the mobilisation effect of the analysed instrument, as the costs of preparing the

ground for the project are not included. The public sector also has to continue investing in policy and

regulatory support in order to create the right conditions for bankable projects and investments in the

project execution phase.

Once it is determined which type(s) of public interventions will be included, it should be decided which

specific instruments are considered. Figure 6 below provides an overview of instruments that can play a

role in mobilising private climate finance.

Selected option:

The Steering Committee acknowledged that all public interventions, both policy and project support,

are important in mobilising private climate finance and should therefore be considered. However, the

Steering Committee also acknowledged that the causal link between policy support interventions and

the actual mobilised private climate funding is difficult to make (also with a high risk of double-

counting). Therefore, it was agreed that all instruments (for which data is available), except the export

credit insurance of Delcredere-Ducroire, will be included in the data assessment and that a

differentiation will be made between public climate finance that does not mobilise private finance, and

public climate finance that does and/or has the potential to mobilise private finance. Since it is very

difficult to quantify mobilised private finance for policy support actions, it was agreed that a case study

(see Annex D of this report) would be developed for a qualitative discussion on the importance of policy

and preparatory interventions in scaling-up climate projects.

The export credit insurance of Delcredere-Ducroire in an instrument that should be considered with

care before including this instrument in the data assessment on mobilised private climate finance. The

exports and investments that Delcredere-Ducroire insures are usually paid by public entities and often

by developing country governments. For example, the companies that produce the surfaces for land

creation in the Maldives are commissioned and get paid by public entities in the Maldives. Thus the

climate finance actually flows from a developing country to a developed country (so South-North flow).

Although the export credit insurance instrument can be an important and interesting mobilisation

vehicle, it was agreed in the Steering Committee that a sensitivity analysis would be developed

on the export credit insurance data provided by Delcredere-Ducroire for 2013 and 2014, in order

to assess the impact this instrument has on the mobilised private climate finance figures that are

now presented in the data assessment (see Chapter 4).


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Figure 6 - Typology of public interventions mobilising private finance52

52 Source: copied from Jachnik, R., Caruso, R., Srivastava, A. (2015), "Estimating mobilised private climate finance: methodological approaches, options and trade-offs".


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2.4 Stage 3: Valuing public interventions and total private finance involved

Stage 3 concerns the monetary value of the public interventions.

2.4.1 Conversion of currency (A1, A2, A3)

There is an international consensus that USD are used as the general currency for measuring and

reporting (see Option 1 below), as most international financial data are reported in USD it is the most

practical and straightforward method. Another option is to use the national currency of the donor

country, however, the implication is that financial flows figures between international donors cannot

be easily compared without agreeing on a specific currency exchange rate. A third option is to use the

currencies of recipient countries, but this would require all international donors to report in many

different developing country currencies.

There are also different options regarding the use of exchange rates. Although there are no principal

preferences for one or the other option, a pragmatic (and workable) choice has to be made to help

international comparability. The options are:

• Option 1: Convert based on rate at project commitment

• Option 2: Convert based on rate at project disbursement

• Option 3: Convert at year end based on annual average

• Option 4: Use practices and standards from providers of international statistics (e.g. IMF, OECD)

Finally, a third issue is if the value of local currencies should be differentiated from international

currencies by using proxies to determine countries risk exposure, e.g. based on credit ratings.

Selected option:

During the Steering Committee meetings, it was agreed to apply the standardised methods used by

Belgium for the purpose of this study. All finance flows are measured in EUR and/or USD and existing

methods for conversion of currency in accordance with OECD DAC practice are applied53. Since most, if

not all, financial reporting among Belgian landscape stakeholders are available in EUR, it was agreed to

use the euro as reporting currency for conceptualising the Belgian methodological framework.

2.4.2 Point of measurement (A4)

A financial transaction has various stages. It is important to choose one point of measurement for all

public interventions. The point of measurement that is chosen can have a big impact on the final

results. Most public entities report their climate finance on a contract basis. This is more accurate and

often lower than the commitments or board approvals that preceded the contracts. But even more

accurate (and lower) are the actual disbursements. Development banks have indicated that the

amounts can decrease by 10% to 60% after Board approval in the contracting phase, and again 10% to

35% after contracting in actual disbursements54.

53 Annual exchange rates are available here: http://www.oecd.org/dac/stats/documentupload/Exchange%20rates.xls 54 Based on our expert opinion and experience, as well as on insight gathered when interviewing representatives from BIO-Invest and the Dutch Development Bank (FMO).


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Figure 7 - Moments of measurement and decreasing amounts of finance

The public interventions need to be measured at one point in the financial chain to avoid double

counting and provide accuracy and transparency. Measuring disbursements would be the most accurate

approach, as the actual disbursements to a climate activity can easily decrease down to 50% of what

was initially committed55. However, this is also a more difficult point to measure and data availability is

often limited. Likewise, what counts as mobilised private climate finance (and what not) will need to

be sharply defined. For instance, where does the causality between the public intervention and private

finance end? How long after the public intervention can private finance still be attributed to it? And do

we only measure direct co-finance for climate projects, or do we also include private finance at the

intermediate sub-fund or portfolio company levels? A robust methodology is only possible if clear

boundaries are established.

The preference which emerged is to measure disbursements, because they are more accurate than

commitments. DGD already tracks disbursements for their public interventions, so it should be no

problem to use these figures. However, not all actors in the Belgian climate finance landscape report

on disbursement level, based on the data collection and data verification, and therefore exceptions

have to be made for actors that only have data available at either contracting and/or Board approval

level. The amounts of private co-finance are always measured at contract date but there is often no

data available to link the public disbursements to the private disbursements in development or climate

projects. Companies can also be wary of reporting on disbursements due to confidentiality issues.

Therefore, since the total decline in public finance between contract date and disbursement is

relatively well known, the most realistic and practical option is to use the decline ratio (Q) of public

climate finance flows (between approval and disbursement) and apply this ratio to private climate

finance flows.

Options Commitment Contract Disbursement

Examples

BE commits EUR 10 million to an adaptation project that will be implemented next year. Private sector commits to EUR 20 million. BE mobilises EUR 20 million.

BE contracts EUR 9 million, on the assumption of EUR 15 million private

BE disburses EUR 9 million to the final recipient for the implementation of the adaptation project. Private sector disburses EUR 11 million. BE mobilises EUR 11 million.

Considerations

Easier to measure mobilised private finance, but less accurate. Usually higher than disbursements.

This is most easy to find in admin systems, but still an overestimation

Most accurate, very difficult to measure mobilised private finance (due to confidentiality issues). Usually lower than commitments.

55 Based on our expert opinion and experience, as well as on insight gathered when interviewing representatives from BIO-Invest and the Dutch Development Bank (FMO).


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Selected option:

Among the actors in the Belgian climate finance landscape there are differences in on what moment

climate-relevant expenditures are reported in the internal systems. For example, DGD tracks public

climate finance on both commitment and disbursement level, where BIO reports on commitment (which

is equal to Board approval) and contracting level. In the ideal situation, all developed countries would

report using a method that is used internationally, allowing for international comparison. At the same

time, the difference between commitments and disbursements should be noted, because reporting on

commitment levels may lead to an overestimation. Another complexity is the time dimension: for how

long after the public intervention are new private investments still considered as mobilised? During the

Steering Committee meetings, it was agreed that the most important point is that what we report is

clear, to allow full transparency, and therefore for the purpose of this study we should work with the

data on financial flows that are available per relevant Belgian climate finance provider.

In order to test the impact of the moment of measurement it was agreed that a sensitivity

analysis would be carried out.

2.4.3 Valuing public interventions (A5, A6)

Valuation of public interventions is a challenge. Thus far, countries usually report on their climate

finance at face value for grants, loans and equity finance. This is a simple and transparent method, but

it does not take different risk profiles or levels of concession into account. At the same time, the face-

value valuation method can also create perverse incentives when tracking and calculating the

mobilisation potential of public climate finance, as the face-value method doesn’t provide an ideal

reflection of the grant elements of specific instruments (e.g. concessional loans are included for the

full nominal value, but the majority of the loan’s value will be paid back later on)56. Valuing these

interventions can require differentiated methods. For example, should a grant be valued in the same

way as a concessional loan? A grant is one directional, whilst a concessional loan has to be repaid by the

recipient. Should concessional loans be treated differently from non-concessional loans at market rates?

Different risk levels are very common in commercial debt finance (first loss arrangements, subordinate

loans, senior loans, etc.), while this is not that obvious for concessional debt finance.

Valuing based on face-value?

A grant involves a net transfer of resources to the recipient country, while a loan leads to a future flow

back to the donor (although if the project is successful, the recipient can retain a yield). At face value,

the reflow is not taken into account. A subordinated debt instrument with a grant element of 35% is

riskier and costly for the provider than a non-concessional senior debt instrument, but this is not

apparent from the face value. Instruments with a higher risk level and higher grant element are not

rewarded. It can thus become attractive for the provider to use the instrument with the lowest cost

and highest face value.

A face-value attribution has an impact on the total public finance but not on the mobilised private

finance. It can however have an impact on how the mobilised private finance is attributed amongst the

56 Jachnik, R., R. Caruso and A. Srivastava (2015), "Estimating Mobilised Private Climate Finance: Methodological Approaches, Options and Trade-offs", OECD Environment Working Papers, No. 83, OECD Publishing, Paris, available at: http://www.oecd-ilibrary.org/environment/estimating-mobilised-private-climate-finance_5js4x001rqf8-en


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public donors. So far, all interventions are usually valued based on their face value. However, there are

arguments against this:

A grant involves a net transfer of resources to the recipient country, while a loan leads to a future

outflow of financial resources by the recipient; albeit, hopefully, having accelerated growth in the

meantime so that the gains are more than just the required amount to cover the future outflow;

Ceteris paribus, a concessional loan (providing liquidity + viability gap cover) has a stronger

private finance leverage effect than a credit facility offering loans at commercial terms;

Ceteris paribus, a subordinate loan (providing liquidity + risk protection) has a stronger private

finance leverage effect than a senior loan.

The timing of public interventions also has different leverage effects:

Pre-investment finance has a stronger leveraging effect than construction finance: project

origination, developing bankable project proposals, is the most critical issue in climate finance;

Construction finance has a stronger leveraging effect than an after-construction refinance facility:

due to high risk it is more difficult to finance construction than an operating entity.

The OECD-DAC’s Working Party on Development Finance Statistics (WP-STAT) has explored the

possibilities of collecting data on mobilised private finance through risk-mitigation and other

instruments with a potential leveraging impact. In the short-term, the WP-STAT deems it feasible to

measure the mobilisation effect of57:

Syndicated loans: Provided by a group of lenders (called a syndicate) who work together to

provide funds for a single borrower. The main objective is to spread the risk of a borrower default

across multiple lenders, which encourages private investment.

Guarantees: Guarantees transfer or mitigates risks that private investors would not be able or

willing to take.

Shares in collective investment vehicles (CIVs): Highly rated investors (e.g. DFIs and MDBs)

increase the creditworthiness of the CIV, which gives a positive signal to private investors.

Grants

Grants are the clearest and easiest to calculate. The money is provided to a project and does not need

to be paid back. It makes sense to value grants at net value.

Equity

Equity involves capital flowing from an industrialised country to a project, which makes the

industrialised country co-owner of the project. If the project is functioning well it will create financial

returns. This can result in dividend payments, rising share value and the possibility of selling shares

(possibly to private parties). However, if the project’s returns are lower than expected there is no

opportunity to provide dividends and the share value diminishes and can ultimately become zero (e.g.

bankruptcy). If a public donor is participating in equity this is a strong and positive signal for private

investors as this money is subordinated to debt finance. However, the estimation of a grant equivalent

for equity investment is impossible because the future proceeds are unknown and the risk assessment is

highly subjective.

57 OECD (2015), “DAC work on mobilisation: lessons learnt from the 2015 data survey on mobilisation and next steps”, available at: http://www.oecd.org/officialdocuments/publicdisplaydocumentpdf/?cote=DCD/DAC/STAT(2015)26&docLanguage=En


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Loans

A loan or debt finance always has the intention to flow back from developing countries to industrialised

countries, even with interest, regardless of the project’s success. For ODA it has been internationally

agreed that all loans that are considered ‘concessional’ or ‘soft’ loans (below market conditions) can be

calculated as ODA58. In the climate finance discussions, these methodological choices have not yet been

made. The loans from Ordinary Capital Resources (OCR) operations (of MDBs and DFIs) are mostly non-

concessional.

Guarantees and export credits

Loan guarantees and other export credit mechanisms can be issued by the public sector to transfer the

risk of non-repayment. It usually does not lead to a public financial flow. The public guarantee will only

be paid out in the case of default (most often to the western company). Guarantees are in principal

non-concessional because this would violate WTO rules on state aid. One could argue that these

guarantees not only support the exporting industry but also make (private) climate investments in

developing countries possible.

When guarantees are included to a loan or export credit mechanism provided, it should be noted that

there is a high potential for double-counting as guarantees do not appear in the total pro-rata project

overviews since guarantees are not ‘real’ financial flows (guarantees are only issued when the default

situation happens). For example, the Belgian government guarantees a concessional loan by the

European Investment Bank (EIB), with the concessional loan mobilising EUR 10 million of private

finance. The EIB will report that their concessional loan has mobilised EUR 10 million of private finance,

while the Belgian government would like to report that their guarantee made the EIB’s concessional

loan possible and therefore Belgium might want to attribute some of the mobilised private finance as

well. Since there is no international agreement or standard on how to report on such situations, there

would be a 100% double-counting if both Belgium and the EIB report the EUR 10 million private finance

as mobilised by their intervention

FINEXPO: export credits

The objective of Finexpo is to support Belgian companies exporting their products and services to

developing countries. These Belgian companies get paid by the local (developing country) government.

Thus the financial flow actually flows from South to North. Finexpo, together with a commercial bank,

provides credit to the local government to support this payment. This is a North-South flow, but it flows

directly back to the Belgian company. An example is provided in Figure 8.

58 OECD (2013), “Loan concessionality in DAC statistics”, available at: http://www.oecd.org/officialdocuments/publicdisplaydocumentpdf/?cote=DCD/DAC(2013)2&docLanguage=En


60

Figure 8 - Example of an export credit (state-to-state loan)

Finexpo provides the loan with a 35% grant element, which complies with OECD DAC rules for ODA. This

means that 35% does not flow back to Finexpo. It is a net North-South flow, because it benefits the

Kenyan government directly. There are basically three methodological options:

1. Account the full credit from Finexpo as climate finance, and the part from the commercial bank

as mobilised private climate finance;

2. Account the grant equivalent of the credit from Finexpo as climate finance, and the part from the

commercial bank as mobilised private climate finance;

3. Only account the net flow from Belgium to the developing country as climate finance (i.e. the

grant equivalent of the credit from Finexpo), the rest is seen as a South-North flow.

Delcredere-Durcoire: Export credit insurance

In Finexpo’s state-to-state loans, Delcredere-Ducroire often guarantees (part of) the payment from the

local government to the Belgian company. This mitigates the risk for the exporting (or investing)

company. It guarantees the financial flow that flows from South to North, and therewith mobilises

climate finance from a developing country to a developed country.


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Figure 9 - Example of an export credit insurance

Public policy support interventions

Accounting the value of public policy support interventions is quite feasible as it mainly involves grants

and traditional technical assistance. However, accounting for mobilised private finance remains highly

problematic due to the nature of these instruments (they have no specific objective to mobilise any

private finance). If any attribution is made, there is a high risk of double counting under project

finance as explained before.

Selected option:

During the Steering Committee meetings, it was indicated that coherence on this decision point should

be sought with the ongoing work within the development finance community (OECD DAC). In 2014, the

OECD DAC High Level Meeting members agreed to change ODA measurement of loans from face value to

grant equivalents59. The same method could be used for climate finance reporting. However, more

research on this option is needed for a) assessing the implications of the applicability of grant-

equivalency as attribution method, and b) to develop a harmonised view on when/where to apply a

grant-equivalent attribution by the international donor community. The ongoing work of the OECD DAC

and the OECD-CPI report are contributing to insights on this matter. Given the complexity of the

matter, and for international comparability with other donor countries and development finance

institutions, the different instruments will be valued for the calculations at face-value.

In order to test the impact of the face-value attribution as a valuation method it was agreed that

a sensitivity analysis would be carried out.

59 OECD DAC (2015), ‘Inclusion of the Effort in Using Private-Sector Instruments in ODA: Incentives Embedded in the Institutional and Instrument-Specific Approaches’, DAC Meeting 18 June 2015, available at: http://www.oecd.org/officialdocuments/publicdisplaydocumentpdf/?cote=DCD/DAC(2015)15&docLanguage=En


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2.4.4 Boundaries and value of mobilised private finance (A7, A8, A9)

Just like public interventions, mobilised private finance can consist of different financial instruments.

In one climate project, a loan syndicate can attract private loans, an equity fund can attract private

equity, and a public grant and export guarantee can attract additional private finance. Following the

OECD’s four-stage framework, it is important to define the boundaries of the mobilisation impact from

the public intervention. How much of the total private finance can be seen as mobilised? And how far in

time? The OECD four-stage framework provides options for three financial instruments60:

Syndicated loans: does the arranger of the syndicate only account for private finance within the

loan syndicate, or all private finance associated with the investment or project?

Equity funds: does the public entity account for private finance at the direct fund level, or at the

sub-fund level, or at the project level?

Public guarantees: does the public entity account for the value of the private finance that is

directly guaranteed, or the total face value of the private finance instrument to which it applies?

A third option would be to account for all private finance associated with the investment or

project.

The boundaries and value of private finance relate to the questions revolving around causality and

attribution. Did the (Belgian) public intervention mobilise the entire private finance for a project? Or

only part of it? For instance, in the case of a syndicated loan, did the arranger only mobilise the private

finance within the loan syndicate? Or can the arranger account for all the finance associated with the

project? Another issue is the time dimension: for how long after the public intervention are new private

investments still considered as mobilised? Options here are:

Only private co-finance at the moment of the public intervention

All private finance during the project lifetime (e.g. over 10 or 20 years)

The second option is not currently possible in Belgium because of data limitations. In the future, a

system tracking mobilised private finance throughout the project lifetime could be implemented (such

as that used by the UK’s Climate Investment Fund, which tracks private co-finance every six months

during the project lifetime) and could provide a more accurate picture of the mobilisation impact, but

it would also be accompanied by an increased risk of double counting if other public interventions are

used during the project lifetime as well. Due to the lack of data, it is thus only possible to use the first

option and account for private co-finance at the time of the public intervention.

Selected option:

During the Steering Committee meetings, it was agreed that coherence on this decision point should be

sought with the preferred options under the other decision points regarding the valuation of public

interventions (Stage 3). For the methodological framework for this Belgian pilot study this means that

the entire amount of private project finance at the moment of the public intervention is taken into

account against their nominal face value (also for guarantees, which is in line with the OECD DAC). For

any equity participation this means that the percentage of private finance at the fund level or private

co-finance at the project level is taken into account for calculating the mobilisation potential.

60 OECD (2015), ‘Estimating mobilised private climate finance: methodological approaches, options and trade-offs’, available at: http://dx.doi.org/10.1787/5js4x001rqf8-en


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2.4.5 Data or proxies (A10, A11)

In the ideal situation, detailed data on public and private finance on a project level and over a certain

time horizon is administered in the relevant databases and among the different climate finance

providers. However, this level of detail and time series is often not available, also because the

administrative costs for maintaining such an in-depth database is quite high. Proxies could therefore be

developed and applied as an average figure (e.g. an average leverage factor), as long as the proxies are

tested and are reliable within a certain margin of error, to simplify the process in the future. For

example, as described under Section 2.4.2 ‘moment of measurement’, a proxy (Q) could be used to

estimate the decline between date of contract and date of disbursement.

As this pilot study is a preliminary exercise to assess Belgium’s performance in mobilising private

climate finance, data has been gathered at a project level to the extent possible and available. The

development of proxies could in theory be done by using the observed average mobilised private

finance from historic time series for every euro public finance (a “leverage ratio”), possibly in

combination with a verification exercise to update the leverage ratios on a regular basis.

Selected option:

Given the current discussions in both the Steering Committee meetings and in the international domain,

there is no clear view nor harmonised approach yet with regard to the applicability of proxies. In order

to come to a workable methodology, as a follow-on process after this pilot study, the use of proxies is

probably a necessity to avoid large administrative burdens for tracking and reporting public and private

climate finance mobilisation. As this pilot study has assessed the mobilisation of private finance by

Belgium on a project-by-project basis, data on project level has been gathered and processed in the

data assessment, hence no proxies were needed or developed for this assignment.

2.5 Stage 4: Estimating private finance mobilisation

2.5.1 Causality

Ideally, all public interventions should be examined to establish the causal link between the public

intervention and the triggering of private finance. This way, only private finance that is truly mobilised

by the public sector would be included. In practice, this is only possible if we know how much would

have been financed by the private sector if the public intervention had not taken place. This is labour

intensive and difficult to verify ex-post. However, methods exist that attempt to make this estimate.

The UK’s International Climate Fund uses a method that estimates a Business as Usual scenario and

subtracts this from what is accounted as mobilised private finance61. If the private sector already had

plans to invest, prior to the public intervention, it is not accounted. This should in theory give a more

accurate estimate of mobilised private finance. On the other hand, one could argue that public finance

is probably only called for when the private actors are not satisfied with the risk/return ratio.

Therefore, one could easily assume that most public climate finance triggers 100% of the private

finance.

Estimates of causality are preferably tracked from the beginning of the public intervention. This

involves an elaborate process. The alternative is for an external evaluator to construct a counter-

61 International Climate Fund, ‘ICF KPI 12: Volume of private finance mobilised for climate change purposes as a result of ICF funding’, internal document.


64

factual scenario during or at the end of the project intervention. Even if such methods are used, they

remain based on counterfactual assumptions: it is impossible to know what would have actually

happened without the public intervention.

Example: Belgium provides a renewable energy producer with a EUR 1.5 million grant. Germany also

provides this producer with a EUR 500,000 grant. The producer has been operational for 1 year with an

initial equity investment of EUR 100,000. Prior to receiving the grants from Belgium and Germany, the

producer already planned to invest another EUR 500,000 over the next 2 years. After the grants, the

producer gets a seed capital company to invest another EUR 1 million.

Option Assumed 100 % causality Estimating causality with a Business-as-Usual scenario

Method BE and DE attribute all private finance after the disbursement of the grants as mobilised (EUR 1.5 million).

If the grants were not given, it is expected that the producer would still invest the extra EUR 500,000. BE and DE can only attribute the last EUR 1 million seed capital as mobilised.

Considerations

+ Most practical method + Reports can be standardised - May overestimate the mobilisation effect of public interventions

- Very difficult, labour-intensive method + More accurate, but still based on assumptions + Provides better insight into the interventions that would be relevant for the given country and market conditions

Selected option:

Given the current data availability from the different actors in the Belgian climate finance landscape, it

is currently impossible to examine the causal relation between public interventions and the

mobilization of private climate finance flows. Since there is no internationally agreed methodology to

establish the causal link, a 100% causal relationship between the public intervention and private

finance is assumed for this pilot study. This probably leads to a small overestimation of the total

mobilisation. This overestimation can be addressed by using stricter definitions and boundaries in other

parts of the methodology, for example, by only measuring private co-finance at the moment of the

public intervention.

2.5.2 Attribution of mobilised private finance to public interventions

The final step of the methodology is to determine whether, and if so how, to attribute private finance

amongst public actors (in multilateral projects). Private finance can be mobilised by local public

support, multilateral funds, donors from developed or developing countries and most often a

combination of these. It is important to prevent double counting and thus apply a universal attribution

method. In large-scale projects especially there are many different actors and instruments involved and

clear attribution is paramount. The OECD’s four-stage framework62 mentions a number of attribution

methods, the first three of which are related to the discussions on the valuation of public interventions:

volume-based attribution, risk-based attribution, and concessionality-based attribution. Other options

are: time-based attribution (based on the point of entry), role-based attribution (based on the actors’

roles, e.g. lead arranger), or full attribution (everyone accounts all associated private finance, which

would lead to significant double-counting).

62 OECD (2015), ‘Estimating mobilised private climate finance: methodological approaches, options and trade-offs’.


65

The Belgian share of funds can be calculated by looking at the share of Belgian disbursements as part of

the total disbursements to the fund. The question is whether the weighting will be done based on

volume of the interventions, or risk profiles, level of concession, repayments, etc. (see discussion

above on valuing public interventions). Hence the attribution of mobilised private finance will depend

on the valuation of public interventions.

Volume-based attribution (hypothetical example)

BIO provides equity for a wind park, which mobilises EUR 50 million of private equity. The African

Development Bank (AfDB) arranges a loan syndicate, which mobilises EUR 100 million of private debt

finance. Within the loan syndicate, the EIB provides EUR 10 million of debt finance which is guaranteed

by the Belgian export credit facility. The German Development Bank (Kreditanstalt für Wiederaufbau,

KfW) provides a subordinate loan (outside of the syndicate).

Option 1: All public partners divide all mobilised private finance on a pro-rata basis, based on the

value of their public intervention and attribution method (see below). (Note: it is still unclear how

the EIB and the Belgian export credit facility can share their attribution without double counting);

Option 2: AfDB attributes all mobilised private finance within the loan syndicate (EUR 100

million), because the AfDB is the lead arranger. BIO attributes the mobilised private equity (EUR

10 million). The EIB, the Belgian export credit facility, KfW and Belgium do not attribute anything.

Risk-based attribution (hypothetical example)

Belgium provides EUR 10 million in first-loss equity. France provides EUR 10 million subordinated debt

and Germany provides EUR 10 million of senior debt. This mobilises a total of EUR 120 million of private

finance.

Options Volume-based attribution Risk-based attribution (1) Risk-based attribution (2)

Method BE, DE, and FR each attribute 33% (EUR 40 million).

Due to the higher risk, BE’s equity is weighted the highest (e.g. 2x), and FR’s subordinated loan higher than the senior debt but lower than first-loss equity (e.g. 1.5x). DE has the lowest risk and is therefore weighted the lowest (e.g. 1x). BE attributes the most (44%), FR attributes the second most (33%), and DE the least (22%).

BE, DE, and FR each attribute 16.7% (EUR 20 million). BE participates in the highest risk class and therefore attributes another 50%.

Considerations

+ Very practical method - Donors are not rewarded for taking up more risk

- Not very practical, difficult/impossible to assess, because the risk levels are context specific + Donors are rewarded for taking up more risk

- Not very practical, but easier to assess than (1) + Donors are rewarded for taking up more risk

Option 1: All public interventions involved are weighted according to their risk level by applying

standardised weights.

Option 2: 50% of the amounts mobilised are attributed to each public participant pro rata, and

the remaining 50% are attributed in proportion to the participants’ financial share in the highest

risk class at the moment of the private investment.


66

Concessionality-based attribution (hypothetical example)

Belgium provides a grant of EUR 10 million. France and Germany provide concessional loans of EUR 10

million each. This all together mobilises EUR 120 million of private finance.

Options Volume-based attribution Concessionality-based attribution

Method BE, DE, and FR each attribute 33% (EUR 40 million).

The grant equivalent of the loans is EUR 2 million each. BE’s grant is still counted as EUR 10 million. DE and FR attribute 14.3% each, BE attributes 71.4%.

Considerations

+ Very practical method - Donors are not rewarded for taking up more risk or higher concessionality levels

- Not very practical, but methods already exist + Donors are rewarded for taking up higher concessionality levels (Counter-flows (e.g. repayments) from developing countries to developed countries are taken into account)

As discussed in section 2.4.3, valuing public interventions at face value can create the incentive to use

instruments with low risk exposure or levels of concession. However, instruments with higher risk

exposure and grant elements usually have a higher mobilisation impact:

Ceteris paribus, a concessional loan is more likely to mobilise private finance than a loan at

commercial terms63. Both address a local financial sector liquidity shortage and/or an asset-

liability maturity mismatch problem. The former, by containing a grant element, also solves a

commercial viability gap problem, which otherwise prevents investors from having an interest in

the investment as such.

Ceteris paribus, a subordinate loan (providing liquidity + risk protection) has a stronger private

finance leverage effect than a senior loan64.

Selected option:

In summary, the level of concession and risk profile of the public interventions have a significant impact

on the mobilisation of private climate finance and should therefore, ideally, also be taken into account

in the attribution. To avoid double counting, a pro rata attribution among all the public partners is

probably the most accurate and straightforward option, and as such has been selected as the preferred

option for this study by the Steering Committee participants.

2.6 Exploring synergies with the OECD DAC WP-STAT

The climate discussion is becoming increasingly intertwined with more ‘classical’ development

discussions. The same is true for climate finance and development finance issues. Due to their

comparative closeness it is interesting to see if we can learn from the -already longer established–

development finance discussions and the methodologies used under the OECD DAC for calculating the

financial flows.

This study aims to build upon existing standards and work within the development finance community in

general and the OECD DAC experiences especially. To create a transparent and accurate Monitoring,

Reporting, and Verification (MRV) system, it is important to avoid diverging systems for ODA and

63 Based on our expert opinion and experience, as well as on insight gathered when interviewing representatives from development banks. 64 Based on our expert opinion and experience, as well as on insight gathered when interviewing representatives from development banks.


67

climate finance as much as possible. We therefore seek synergies with the ongoing work of the OECD

DAC Working Party on Development Finance Statistics (WP-STAT). The WP-STAT has explored the

possibilities of collecting data on mobilised private finance through instruments with a potential

leveraging impact65. In the short term, it has proposed attribution methods for three instruments,

which are summarised in Table 3.

Table 3 - Proposed attribution methods by OECD DAC WP-STAT

Instrument Attribution method Calculation

Syndicated loan Role-based

Lead arranger (public institution):

Total sum mobilised private finance * 50%

Other participants:

Total sum mobilised private finance * 50% * pro rata share

within syndicated loan

Guarantee Volume-based

Attribute the full amount of the private finance (loan or

equity) instrument covered by the guarantee (irrespective of

the percentage covered by the guarantee)

Collective

investment vehicle

(CIV)

Risk-based

50% is attributed pro-rata:

Total sum mobilised private finance * 50% * pro rata share of

all public participants

50% is attributed to the highest risk class at the moment of

the private investment:

Total sum mobilised private finance * 50% * pro rata share of

public participants within highest risk class

The three instruments are discussed in detail below.

2.6.1 Attribution methodology for syndicated loans

For syndicated loans there are several options under discussion. The MDBs follow the reasoning that

the lead arranger can attribute all the mobilised private finance, neglecting the inputs of other public

sources. At the other end of the spectrum is the fully pro-rata approach, which does not reflect the

additional effort made by the lead arranger. Discussions in the OECD DAC WP-STAT have led to the

proposal below, which can be seen as a middle ground between these two different interpretations:

Lead arranger (public institution): Total sum mobilised private finance * 50%

Other participants: Total sum mobilised private finance * 50% * pro rata share within syndicated loan

65 OECD DAC (2015), ‘Working Party on Development Finance Statistics (WP-STAT) 2015, Methodologies to Measure Amounts Mobilised from the Private Sector by Official Development Finance Interventions’, OECD Conference Centre, Paris.


68

Figure 10 - Example of a syndicated loan66

In the example above (Figure 10), the lead arranger can attribute USD 3.5 million mobilised private

finance from the B-loan (50% of USD 7 million). The bilateral DFIs that provide parallel loans can

attribute the other USD 3.5 million among themselves pro-rata. For example: FMO provides USD 3

million and BIO provides USD 2 million in parallel loans to the lead arranger ADB. The lead arranger

attributes 50% (USD 3.5 million). The other 50% is divided pro rata to the parallel loan providers: FMO

attributes 60% (USD 2.1 million) and BIO 40% (USD 1.4 million).

A/B loan structure

A syndicated loan arranged by an official institution may include financing from the market through the

so-called “A/B loan” structure. The official institution often retains a portion of the loan for its own

account (A Loan), and sells participation in the remaining portion to other participants (B Loan). The

borrower signs a single loan agreement with the lender of record. Official arrangers may also seek to

syndicate “parallel loans” from other official institutions (e.g. DFIs) and other participants that are not

eligible participants for B-loans (in order to be eligible to participate in a syndication through a B-loan,

the financial institution needs to be private in nature. Governmental, quasi-governmental or other

official agencies including multilateral agencies are not B-loan eligible). In these cases, the official

arranger identifies investments, structures deals, and negotiates with the borrower in coordination with

all parallel lenders.

B-loans are typically leveraged private finance and are reported separately by some of the MDBs. ADB

has made an estimate that B-loans represent 7% of the total volume67.

2.6.2 Attribution methodology for publicly backed guarantees

The term publicly-backed-guarantee is used for guarantees issued by a publicly created and funded

guarantee agency. The guarantee instrument is essential to incentivise private financers and

development banks like the EIB to make climate related investments in developing countries where the

risk-return profile is beyond their acceptable levels. Therefore, it has been decided to explore the

mobilisation of private climate finance by for example Finexpo. For the calculation of private finance

mobilised by publicly-backed-guarantees, one must distinguish between the impact of a Finexpo

guarantee given to (i) a private loan or equity and (ii) to a loan given by a development bank to a

private investment project.

66 OECD DAC (2015), ‘Working Party on Development Finance Statistics (WP-STAT) 2015, Methodologies to Measure Amounts Mobilised from the Private Sector by Official Development Finance Interventions’. 67 Based on correspondence with the Asian Development Bank (ADB).


69

In the case of a guarantee to a private loan, the OECD DAC proposes to attribute the amount of private

finance (loan or equity) covered by a publicly-backed guarantee as being fully mobilised by the

guarantee, irrespective of the percentage covered (which is typically 50%, but can go as high as 70-

80%), and is therefore called a partial credit guarantee. In the case of co-guarantees, the amounts

mobilised are attributed pro-rata, according to the amounts guaranteed by each guarantor68.

OECD DAC has not discussed how to handle the case of a publicly-backed guarantee given to a loan

from a development bank; and did not develop a methodology for this yet. For example, when Finexpo

extends a guarantee to a loan from a development bank, Finexpo mobilises private finance indirectly,

by enabling (through the participation of for example the EIB in the project’s finance) the financial

closure of a private project, which is financed partly by public and partly by private sources of capital.

As such, there are two options available:

Option 1: record that Belgium has mobilised ‘x’ millions of development bank funding and zero

private finance.

Option 2. Look at what private finance has been mobilised by the development bank loan

according to OECD conventional methodology for mobilised private finance in a syndicated loan

arrangement and then split that amount 50%/50% between the development bank and Belgium.

Since EIB’s participation was contingent on the availability of Finexpo’s guarantee, the 50%/50%

split between EIB and Finexpo is reasonable and used by us.

Alternatively, one could pro-rata attribution of individual participants in a project finance structure,

including that of publicly-backed-guarantees, on a grant-equivalent basis. However, such a

methodology does not exist yet.

2.6.3 Attribution methodology for multilateral donor funds managed by MDBs and MDB finance

A significant amount of climate finance from donor countries flows to multilateral climate funds

managed by MDBs, such as the Climate Investment Funds (CIFs), which are funded by donor countries

(including Belgium) and are precursors to the Green Climate Fund (GCF). For these multilateral donor

funds, donor countries have two options regarding attribution:

To ignore the money invested in them in the calculations on private finance mobilised by the

donor country;

To include them in the national reporting by receiving information on the volume of mobilised

private finance during a calendar year and multiplying with the donor’s share of total funding.

MDBs also finance climate projects with their ordinary capital resources (OCR). The MDBs do not yet

report on how much private climate finance is mobilised by their OCR. They are currently working on a

methodology to jointly report on this in the future. Once data becomes available, donors have the same

two options as above. For the second option, the attribution could be based on the shareholder

structure within the Bank. More details on this will be provided in section 4.4.1.

2.6.4 Attribution methodology for collective investment vehicles (CIVs)

A collective investment vehicle (CIV) is any entity that allows investors to pool their funding and invest

the pooled funds. In the private capital market, they provide an alternative to buying securities directly

as individuals. The most common types are mutual funds, exchange-traded funds, collective investment

68 OECD DAC (2015), ‘Working Party on Development Finance Statistics (WP-STAT) 2015, Methodologies to Measure Amounts Mobilised from the Private Sector by Official Development Finance Interventions’.


70

schemes (all of these for portfolio investors in securities) and venture capital funds (for more risk-

friendly investors). Although a multi-donor fund is a CIV in principle, in international climate finance it

is proposed to use the term CIV only to public-private climate investment funds managed by private

investment managers and not to multilateral donor funds. Since we only consider money spent on

actual climate activities as “climate finance”, the private finance mobilisation of the two differs:

Infrastructure funds invest directly in projects. For these, the latest OECD attribution

methodology69 for mobilisation of private capital in project finance applies.

A fund-of-funds invests in other funds and/or lends money to finance institutions. The CIV lends

money to banks for on-lending to energy efficiency (EE) and renewable energy (RE) projects. The

private money which is mobilised by a participating bank loan to a specific renewable energy and

energy efficiency projects is counted as mobilised plus the bank loan multiplied by the private

finance share in the CIV’s fund capital.

The OECD DAC currently proposes70:

50% is attributed pro-rata:

Total sum mobilised private finance * 50% * pro-rata share of all public participants

50% is attributed to the highest risk class at the moment of the private investment:

Total sum mobilised private finance * 50% * pro-rata share of public participants within highest risk

class

For the point of measurement, the OECD DAC proposes to take into account commitments during the

fund-raising period (up to maximum 5 years). This means that the total private investment committed is

attributed to official bodies investing in the riskiest investment tranches, i.e. common equity in flat

CIVs or first-loss or otherwise riskiest tranches in structured CIVs. 50% of the amounts mobilised are

attributed to each official participant equally, and the remaining 50% are attributed in proportion to

the participants’ financial share of the official capital or highest risk class respectively in the CIV at the

moment of the private investment.

69 OECD DAC (2015). 70 OECD DAC (2015).


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3 Actors in Belgian Climate Finance Landscape This chapter presents an overview of the Belgian Climate Finance Landscape in terms of the (main)

climate finance providers at the federal and regional levels in Belgium, following the comprehensive

and systematic assessments of climate finance flows. For each of the actors, it is indicated what type

of instruments for climate change mitigation and adaptation purposes they have and/or implement.

Figure 11 presents a classification of actors operating along the lines of ‘Development Cooperation’,

‘Environment and Climate Change’ and ‘Finance, Export and Investment’. Finally, there is another

category of ‘Other actors’, which describes two more actors that could be of relevance. This list is not

exhaustive. There could be more actors of relevance, such as BELSPO, VITO, etc., which have not been

examined in this study. Each of the relevant actors will be described in the next sections. Several of

them were able to provide data on climate finance that was used in the quantification of this study,

namely: DGD, Flemish Foreign Affairs, Walloon Agency for Air and Climate, FPS Environment, BIO,

Finexpo, and Delcredere-Ducroire. For the other actors this was not possible either due to lack of data

or time constraints.

Figure 11 - Landscape of relevant climate finance providers in Belgium


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3.1 Actors in Development Cooperation

3.1.1 Federal Public Service Foreign Affairs, Foreign Trade and Development Cooperation: The

Directorate-General for Development Cooperation and Humanitarian Aid (DGD)71

The DGD drafts development policies at federal level, allocates Belgian Official Development Assistance

(ODA) to national and international stakeholders which make use of this assistance and monitors and

evaluates its policies. It delivers ODA directly at federal level, and indirectly, in which case the

projects are prepared and implemented by NGOs, Belgian universities and other scientific institutions,

as well as BIO. BTC is the main indirect player that implements climate projects for DGD in this

manner72. As such, DGD supports BIO and BTC financially (see their descriptions in sections 3.1.2 and

3.1.3 below).

Mission on climate change

Since 2008, the fight against climate change in the South has been explicitly included in the various

policy memorandums of the Minister for Development Cooperation73. The priority countries are the

Least Developed Countries (LDCs) and countries in Africa74. The partner countries are currently: Benin,

Burkina Faso, Burundi, DR Congo, Guinee, Mali, Morocco, Mozambique, Niger, Uganda, Palestine,

Rwanda, Senegal and Tanzania75. DGD focuses on better incorporating climate change throughout its

ODA portfolio. It has developed several initiatives aimed at integrating climate change in the various

channels for development cooperation (bilateral, multilateral and indirect) and for the different phases

of development agreements (policy level, identification, formulation, monitoring and assessment).

Recently, the new law on development cooperation of 19 March 2013 states that any Belgian

development cooperation initiative must integrate “protection of the environment and of natural

resources, including the fight against climate change, drought and global deforestation”76. An

increasing number of projects with partner countries include specific climate change components, such

as in Uganda, Vietnam, Mozambique and Burundi77. The main sectors that receive climate finance by

DGD are: agriculture, water supply and sanitation, energy, environment, and humanitarian aid78.

71 Ministry of Development Cooperation, ‘Vision, Mission, Values’, available at: http://diplomatie.belgium.be/en/policy/development_cooperation/who_we_are/our_organisation/dgd/vision_mission_values/ 72 Government of Belgium, ‘MMR Report 2013-2014, Report on financial and technology support provided to developing countries under the Monitoring Mechanism Regulation (MMR)’, Communication with European Commission. 73 FPS Foreign Affairs, Foreign Trade and Development Cooperation (2008), “Climate change and the Belgian development cooperation policy: challenges and opportunities”, available at: http://diplomatie.belgium.be/en/binaries/report_climat_change_tcm312-67482.pdf 74 Government of Belgium (2013) ‘Belgium’s Sixth National Communication on Climate Change under the United Nations Framework Convention on Climate Change’, available at: https://unfccc.int/files/national_reports/annex_i_natcom/submitted_natcom/application/pdf/bel_nc6_rev_eng.pdf. 75 Ministry of Development Cooperation, ‘Partner countries’, available at: http://diplomatie.belgium.be/en/policy/development_cooperation/where_we_work/partner_countries/ 76 FPS Foreign Affairs, Foreign Trade and Development Cooperation (2014), “Strategy note – Environment in the Belgian Development Cooperation”, available at: http://diplomatie.belgium.be/en/binaries/Strategy_note_Environment_tcm312-257333.pdf 77 See for instance the case study on Vietnam in Annex D. 78 Government of Belgium (2013) ‘Belgium’s Sixth National Communication on Climate Change under the United Nations Framework Convention on Climate Change’.


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Public/private 100% public

Federal/regional Federal

Which minister is responsible FPS Foreign Affairs, Foreign Trade and Development

Cooperation

Minister of Development Cooperation

Geographical focus Africa, Asia, Latin America

Instruments/projects/actions Grants, concessional loans. All reported as ODA

Mobilisation (potential) DGD’s instruments are focussed on capacity building and

policy support. It has the potential to mobilise private

finance indirectly over time. DGD also provides finance to

NGOs and multilateral organisations that work with the

private sector. Most often these NGOs have to match the

public support with their own private budgets.

Bottlenecks for this study It is very difficult to measure indirect mobilisation of private

climate finance.

3.1.2 Belgian Technical Cooperation (BTC)79

BTC is the Belgian development agency, a public company with social purposes, established in 1998. Its

only shareholder is the Belgian State, which is represented in the General Meeting by the Minister of

Development Cooperation. BTC is commissioned by the Belgian State and other public actors (e.g.

European Commission, World Bank and DFID) to support development cooperation programmes. The

relations between the Belgian State and BTC are governed by a management contract. DGD provides

most of the finance for BTC’s activities. DGD and BTC work closely together and a management

committee holds meetings on a regular basis. BTC’s staff members in Brussels and overseas embody the

commitment of the Belgian State and other development partners to international solidarity. BTC

supports more than 200 cooperation projects in 18 countries in Africa, Asia and Latin America, being:

Algeria, Benin, Bolivia, Burundi, DR Congo, Ecuador, Mali, Morocco, Mozambique, Niger, Palestine,

Peru, Rwanda, Senegal, South Africa, Tanzania, Uganda and Vietnam. From 2015 onwards, this has

changed to 14 countries: Algeria, Bolivia, Ecuador, Peru, Vietnam and South Africa are no more partner

countries and Guinea-Conakry and Burkina Faso are new partner countries.


BTC considers the environment a transversal theme, which is systematically integrated in all

development cooperation sectors and in all stages of projects. BTC coordinates projects in varying

fields, such as natural resources management, climate adaptation and mitigation, as well as integrated

water management.

In order to deal with environmental risks in its work, BTC integrates environmental impact studies in its

infrastructure projects and rural development projects. These studies are conducted at the beginning

of the project and assess potential risks and formulate risk management measures to be implemented.

Emphasis is also put on capacity development of environmental institutions, the development of

environmental management systems, and the integration of the environmental dimension in technology

transfers and in the development approaches and strategies recommended.

79 Belgian Development Agency, ‘BTCs Profile, Mission, Vision, Values’, available at: https://www.btcctb.org/en/btcs-profile-mission-vision-values


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Which minister is responsible FPS Foreign Affairs, Foreign Trade and Development Federal

Minister for Development Cooperation

Geographical focus Algeria, Benin, Bolivia, Burundi, DR Congo, Ecuador, Mali,

Morocco, Mozambique, Niger, Palestine, Peru, Rwanda,

Senegal, South Africa, Tanzania, Uganda and Vietnam.

Instruments/projects/actions BTC’s financial instruments are all grants and are all

classified as Official Development Aid (ODA). It focuses on

capacity building and technical assistance.

Mobilisation (potential) Although it may not be an objective, the policy support

provided by BTC or some specific policies implemented may

lead to future mobilisation of private finance.


climate finance.

Documents Belgian Development Agency, Annual Report 2014

3.1.3 Belgian Investment Company for Developing countries (BIO)80

The Belgian Investment Company for Developing Countries (BIO) was founded by the law of 3 November

200181. The law was modified by the law of 20 January 201482, and BIO is now held to a Management

contract83 signed every 5 years between BIO and the Belgian State. The management contract sets out

the framework for all of BIO’s activities. The Minister of Development Cooperation is in charge. BIO’s

capital is held by the Belgian State (Ministry for Development Cooperation). Its initial capital amounts

to EUR 5 million but this is extended by additional equity granted by the Ministry for Development

Cooperation (balance total 2014 = EUR 690 million). BIO operates according to a commercial logic as

well as a development finance mission. The financial contributions made by BIO are not conditioned by

the involvement of other Belgian players of any type (companies, banks, etc.), but do not exclude these

either. BIO’s role is to provide long-term financial products that are generally unavailable or

inaccessible on the local markets. The mission of BIO is to support a strong private sector in developing

and/or emerging countries, to enable them to gain access to growth and sustainable development with

the aim to achieving the Millennium Development Goals.


BIO takes the environmental and social implications into account throughout the lifecycle of the project

that they fund and incorporates the good practices principles at all levels, from the commercial

strategy model through to daily decision making. However, BIO has no specific climate change

objectives or mandate to address climate change in the projects they carry out.

80 Belgian Investment Company for Developing Countries, ‘Mission’, available at: http://www.bio-invest.be/en/about-us/mission.html 81 Belgisch Staatsblad (2001) Consolidated law on BIO 2014 dated 3 November 2001, ‘Act on the establishment of the Belgian Investment Company for Developing Countries and amending the Act of 21 December 1998 establishing the Belgian Development Agency in the form of a public law company’, available at: http://www.bio-invest.be/en/library/download-center/downloads/101.html 82 Belgisch Staatsblad (2014), New Law on BIO 2014 dated 20-1-2014, ‘Wet tot wijziging van de wet van 3 november 2001 tot oprichting van de Belgische Investeringsmaatschappij voor Onwikkelingslanden en tot wijziging van de wet van 21 december 1995 tot oprichting van de “Belgische Technische Coöpratie” in de vorm van een vennootschap van publiek recht’, available at: http://www.bio-invest.be/en/library/download-center/downloads/99.html 83Belgisch Staatsblad (2014), Management contract 2014-2018, ‘Koninklijk besluit houdende instemming met het eerste beheerscontract tussen de Belgische Staat en de naamloze vennootschap van publiek recht “Belgische Investeringsmaatschappij voor Ontwikkelingslanden” ’, available at: http://www.bio-invest.be/en/library/download-center/downloads/102.html


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Which minister is responsible Management contract with Belgian state


Instruments/projects/actions Non-concessional loans, equity, technical assistance and

feasibility studies. The loans are provided at market terms,

but in cases where commercial loans are not accessible or

available.

Mobilisation (potential) BIO often co-invests with other public and/or private

parties. When it co-invests with private parties, it mobilises

private finance directly.

Bottlenecks for this study No significant bottlenecks. Documents BIO, Annual Report 2014

3.1.4 Flanders Foreign Affairs84

The Flanders Department of Foreign Affairs manages the reporting, verification and measurement of

the Official Development Assistance (ODA) from the Region of Flanders. Flanders Department of Foreign

Affairs is responsible for matters of the Government of Flanders in the fields of foreign affairs, tourism,

development cooperation and international entrepreneurship.


The Government of Flanders is committed to the international target of contributing 0.7% of the Gross

National Product (GNP) to ODA, of which the majority is channelled via Flemish Foreign Affairs (around

60% for 2013 and 2014). The focus of their international development assistance is on Southern Africa,

specifically on South Africa, Mozambique and Malawi. Of the overall ODA funding by the Government of

Flanders, around 9% is earmarked as international public climate finance for 2014. In the policy paper

‘Foreign policy, international entrepreneurship and Development Cooperation 2014-2019’85, the

Government of Flanders committed to using a portion of the revenues from the auction of European

emissions allowances for international climate finance.


Federal/regional Regional - Flanders

Which minister is responsible Minister-President of Flanders

Geographical focus Southern Africa

Instruments/projects/actions Grants, all ODA

Mobilisation (potential) Flanders Foreign Affairs’ instruments are focussed on

capacity building and policy support. It has the potential to

mobilise private finance indirectly over time.


climate finance. Documents Government of Flanders, Flemish ODA report 2014

84 Vlaamse Overheid, Departement internationaal Vlaanderen, available at: http://www.vlaanderen.be/nl/contact/adressengids/diensten-van-de-vlaamse-overheid/administratieve-diensten-van-de-vlaamse-overheid/beleidsdomein-internationaal-vlaanderen/departement-internationaal-vlaanderen 85Vlaamse Regering (2014),‘Beleidsnota 2014-2019, Buitenlands Beleid, Internationaal Ondernemen en Ontwikkelingssamenwerking’, Brussels, available in Dutch at: http://www.vlaanderen.be/int/sites/iv.devlh.vlaanderen.be.int/files/documenten/Beleidsnota_2014_2019_Buitenlands_Beleid_Internationaal_Ondernemen_Ontwikkelingssamenwerking-1.pdf


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3.1.5 Wallonia-Brussels International (WBI)86

Wallonia-Brussels International (WBI) (or ‘Wallonie-Bruxelles International’) is responsible for the

international relations and international policy of Wallonia, the Federation Wallonia-Brussels and the

French Community Commission of the Brussels-Capital Region. Development cooperation by Wallonia-

Brussels International aims to meet the needs of people in developing and strengthening local capacity.

It promotes decentralisation and proximity to the field. The focus of WBI’s international development

assistance is around nine countries: Benin, Burkina Faso, Burundi, Bolivia, Haiti, Morocco, Palestine, DR

Congo and Senegal.


WBI has no specific climate change nor environmental objectives in their operations. WBI financially

supports the Wallonia delegation to the UNFCCC and missions to the COP-20 (Peru) and COP-21

(France).


Federal/regional Regional – Wallonia-Brussels

Which minister is responsible Prime Minister of Federation Wallonia-Brussels Rudy Demotte

Geographical focus Africa, Latin America

Instruments/projects/actions Grants, OOF.

Mobilisation (potential) WBI’s instruments are focussed on local capacity building

and development.


climate finance.

3.2 Actors in Environment and Climate Change

3.2.1 Federal Public Service of Health, Food Chain Safety and Environment (FPS Environment)87

The Climate Group service within FPS Environment plays a central role in the environment policy that

Belgium implements at international, European, national and federal levels so as to respect its climate

change and Kyoto commitments. It coordinates international climate policy through the secretariat of

the CCIEP Greenhouse Effect Coordination Group and through its role as National Focal Point for

climate policy. The service is also responsible for putting in place the structures required for the Kyoto

Protocol flexibility mechanisms. The Climate Change service also ensures that data required in the

context of international obligations is transmitted to the relevant authorities. At a national level, the

service plays a key role in providing follow-up of the National Climate Plan and in the development of

federal actions.


The FPS Environment develops and is responsible for an “integrated and preventive federal

environmental policy that is a pioneer of sustainable development in order to ensure a quality

environment for everyone”. The Climate Change service’s objective is to combat climate change and

reduce the greenhouse gas emissions which cause it88. The FPS Environment provides climate finance

86 Wallonie-Bruxelles International (2014), ‘Rapport d’activités 2014’, Brussels, available at: http://www.wbi.be/sites/default/files/attachments/publication/ra_2014_wbi.pdf 87 Federale Overheidsdienst Volksgezonderheid, Veiligheid van de Voedselketen en Leefmilieu, ‘Directoraat-generaal Leefmilieu: stuwende kracht’, available at: http://www.health.belgium.be/eportal/Environment/DGforEnvironment/index.htm#.VhKPMSvNxyo 88 Federale Overheidsdienst Volksgezonderheid, Veiligheid van de Voedselketen en Leefmilieu, ‘Klimaatveranderingen’, available at: http://www.health.belgium.be/eportal/Environment/DGforEnvironment/Climate/index.htm


77

through multilateral channels, most notably the Adaptation Fund and the UNFCCC Trust Fund for

Supplementary Activities. It also develops climate projects in Africa, in countries including Rwanda and

Mozambique.



Which minister is responsible The Federal Public Service of Health, Food Chain Safety and

Environment

Federal Minister for Environment

Geographical focus EU / World

Instruments/projects/actions Projects/consultancies/technical support

Mobilisation (potential) FPS Environment’s instruments are focussed on policy and

the public sector, but could indirectly mobilise private

climate finance through multilateral channels.


climate finance. Mobilisation through multilateral channels is

dependent upon the MRV system of the multilateral entity.

3.2.2 Environment, Nature and Energy (LNE)89

The Environment, Nature and Energy Department of the Government of Flanders (or ‘Departement

Leefmilieu, Natuur & Energie’) is charged with the task of creating a better and healthier environment

for present and future generations. It is responsible for planning and evaluating the environmental

policy in compliance with economic and social demands and for the coordination of all environmental

actors as well as the implementation and enforcement of the environmental legislation in Flanders.


LNE is funding various bilateral water and sanitation projects in Africa, Asia and Latin America. It also

provides finance to multilateral organisations, such as the Adaptation Fund and the Kyoto Protocol.



Which ministry is responsible Minister for Environment of Flanders


Instruments/projects/actions Grants, ODA

Mobilisation (potential) Focus lies on development cooperation and water and

sanitation. LNE does not have a private sector objective. It

could indirectly mobilise private finance through its

multilateral channels.




89 Departement Leefmilieu, Natuur & Energie, ‘English Information’, available at: http://www.lne.be/en/english-information/


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3.2.3 Walloon Agency for Air and Climate (AWAC)

The Agency was created in 2008 from the Air Unit of the former General Directorate of Natural

Resources and Environment. AWAC represents the Walloon Region at national level and in international

organisations related to air and climate and coordinates the monitoring of the negotiations, transposes

decisions in the Walloon legislation and ensures their implementation. It prepares for the Region, in

collaboration with the Walloon Government and the departments of SPW, the overall strategy for

improving air quality, the fight against climate change and protection of the ozone layer. To do this,

the Walloon Government adopted a ‘climate decree’ which enshrined in legislation general and sectoral

targets to reduce greenhouse gas emissions and enhance environmental protection.


The AWAC is currently in charge of providing climate finance for the Walloon Region. During the Fast-

Start finance period, it funded several bilateral projects in African partner countries. Thereafter, it

contributed to the GCF and the Adaptation Fund. In 2015, the Walloon government announced it would

significantly increase its contribution to climate finance.


Federal/regional Regional - Wallonia

Which minister is responsible Walloon Minister for Energy and Walloon Minister for

Environment

Geographical focus World

Instruments/projects/actions Grants, currently reported as OOF

Mobilisation (potential) The AWAC’s instruments are focussed on policy and the

public sector, but could indirectly mobilise private climate

finance through multilateral channels.




3.2.4 Brussels Environment

Brussels Environment’s objective is to study, monitor and manage the air, water, soil, waste, noise, and

nature. It also issues environmental permits, checks compliance, develops and supports environmental

education projects, and takes part in meetings and negotiations at Belgian and international level. In

addition, Brussels Environment has developed activities in the field of eco-construction and links

between health and the environment.

Mission on climate change90

Brussels Environment coordinates/manages the contribution of the Brussels Region to the Climate

finance support provided by Belgium. Since 2010, the Brussels Region contributed several times to the

Adaptation Fund, and supported the Green Climate Fund in 2014 and 2015.

In 2015, they will contribute to the GCF again, and support bilateral projects with African cities to

promote low carbon buildings and districts. As such, Brussels environment’s mobilisation potential is

limited for now, but it might increase in the future.

90 Brussels Environment, ‘Who are we?’, available at: http://www.environment.brussels/who-are-we


79


Federal/regional Regional - Brussels

Which minister is responsible Brussels’ minister for Environment

Geographical focus Worldwide, Africa (from 2015 onwards)

Instruments/projects/actions Grants, reported as OOF.

Mobilisation (potential) Potential of direct mobilisation is limited for now, but could

increase in the future by contributing to the GCF and the

Adaptation Fund as well as bilateral projects with African

cities.




3.3 Actors in Finance, Export and Investment

3.3.1 Finexpo

Finexpo is an Inter-Ministerial advisory committee managed by the Ministry of Foreign Affairs and the

Ministry of Finance. It is chaired by the Director-General of Bilateral Relations at the Ministry of Foreign

Affairs, while the vice-chairman is provided by the Ministry of Finance. It comprises representatives of

the Ministries of Foreign Affairs, Foreign Trade, Development Cooperation, Finance, Economy and the

Budget, and also includes representatives of the National Delcredere Office and the Regions.

Finexpo studies the dossiers submitted by companies which are assisted by banks seeking public aid for

export credits. It focuses on financing conditions for credits granted for the supply of equipment and

services: it makes it possible to either reduce or stabilise the cost of financing that is provided by the

banks. Finexpo also provides tied or untied state to state loans.

Mission on climate change91

Finexpo’s missions are two-fold: first, it allows Belgian companies to offer appealing and competitive

financing when they are negotiating a contract and competing with companies from other countries.

Secondly, it allows Belgian companies to conduct projects in developing countries, thereby contributing

to their development. Finexpo does not currently have any specific climate or environmental

objective.

Instruments

All Finexpo instruments are within and are therefore counted as ODA. Finexpo adheres to the

OECD’s Arrangement on Officially Supported Export Credits92. The Arrangement contains provisions on

down payments, maximum terms of credit, local expenditure, classification of political risks, etc. The

first important rule is that tied and untied loans can only be granted to developing countries. The

public aid granted must represent 35% or 50% of the total amount of the planned credit (the percentage

applied varies according to the GNP per capita). Secondly, projects must be commercially non-viable to

qualify for public aid. Finally, the least developed countries (LDCs) and heavily indebted poor countries

(HIPCs) will only be eligible for untied loans. Another requirement from the Belgian government related

91 Finexpo, ‘More information about Finexpo’, available at: http://diplomatie.belgium.be/en/policy/economic_diplomacy/finexpo/more_info/ 92 OECD (2015), ‘Arrangement on Officially Supported Export Credits’, available at: http://www.oecd.org/officialdocuments/publicdisplaydocumentpdf/?doclanguage=en&cote=tad/pg%282015%297


80

to tied aid is that at least 50% of the added value of the investment originates from Belgium (can be

goods or services).

All State-to-State loans are accompanied with commercial credit from a private bank. In 2015, the

share of Finexpo’s credit is 66% and 34% is from the private bank. The repayment period has recently

been extended from 30 years to 40 years.

The yearly budget of Finexpo’s loan instrument is EUR 50 million. The maximum amount for tied

loans is EUR 12 million and for untied loans EUR 8 million. There is no fix % for tied/untied loans –

projects are approved on a first come first served principle. On average, 5 projects are approved per

year. The yearly budget for Finexpo’s bonifications, grants and stabilizations is EUR 28 million.

Focal sectors are: infrastructure, potable water distribution and purification, waste water treatment,

health, and energy. Some of the projects have principal climate-relevancy (e.g. windfarm in Kenya),

some have significant climate-relevancy (e.g. adaptation considerations in water projects in

Vietnam). Because Finexpo’s instruments are ODA, the DGD registers them in their database as well.

Mobilisation

Commercial credit that comes from private banks could count as “mobilised private finance”, as well as

for state to state loans as for interest rate subsidies.



Which minister is responsible Minister of Foreign Affairs and Minister of Finance

Geographical focus Africa, Asia, Latin America, Mediterranean region

Instruments/projects/actions Finexpo uses four instruments:

1. State to state loans a) Tied loans which are combined with a commercial

credit, those loans are requested by Belgian companies.

b) Untied loans requested by developing countries involving an international tendering process.

2. Bonifications: de interests of commercial credits are paid by Finexpo, mostly in combination with a grant from Finexpo in order a grant element of 35%.

3. Grants granted by Finexpo amounting to 35% of the contract amount of a commercial credit with a maximum of EUR 2,2 million.

4. Stabilizations: the interests of commercial loans are “stabilized” by Finexpo so that companies can benefit from a fixed interest rate.

Mobilisation (potential) Significant direct mobilisation: State-to-State loans are

usually coupled with a private loan which in practice provide

41%-50% of the total finance, and interest rate subsidies

have an estimated leverage rate of 2.86 (see section 4.3.5).

Bottlenecks for this study No significant bottlenecks.


81

3.3.2 Delcredere-Ducroire

Delcredere-Ducroire is Belgium's public credit insurer. It is an autonomous government institution

enjoying a state guarantee. It insures companies and banks against political and commercial risks

relating to international commercial transactions, mainly regarding capital goods and industrial

projects, as well as contracted works and services. For these risks, Delcredere-Ducroire can also work

alongside banks through risk sharing schemes. It also insures against political risks relating to foreign

direct investments and directly finances commercial transactions of limited proportion. Delcredere-

Ducroire is active worldwide – both in developed and developing countries. Its objective is to promote

international economic relations. It has a commercial objective and stable financial returns, in

compliance with WTO regulations. It does not have a profit target, but it makes sure risk and premium

are in balance (it should not be loss-making)93. Delcredere-Ducroire does not have any specific

climate or environmental objective.

Instruments

Three instruments are used:

1. Insurance products

Delcredere-Ducroire insures export and investment. This is the most important instrument for this

study.

2. Financial guarantees for bank credits

Guarantees for working capital or other bank credits of Belgian companies. Not directly climate-

relevant as this is about working capital and not project finance.

3. Direct financing (“forfaiting”)

Finance the receivables/transactions. Relatively small instrument (EUR 5 million maximum) and not

climate-relevant.

Important sectors are: water (infrastructure), waste and energy efficiency. Examples are harbour

infrastructure projects with climate resilience aspects, and land creation for the Maldives to adapt to

climate change. Delcredere-Ducroire is also active in the renewable sector, such as solar energy and

wind energy (climate mitigation activities).

Mobilisation

Delcredere-Ducroire’s insurance products allow Belgian companies to invest or export to developing

countries with high risk. Delcredere-Ducroire experts think that the export or investment would not

have been feasible without the insurance. Therefore, it can be considered as mobilised. However,

including export credit insurance instruments can be controversial:

• The majority of export credit insurance instruments do not lead to a financial flow. Only in the case

of default does the insurance get paid out.

• The exports and investments that Delcredere-Ducroire insures are usually paid by public entities –

and for the projects within the scope of our study, these are often public entities in developing

countries. For example, the companies that produce the surfaces for land creation in the Maldives,

are commissioned and get paid by public entities in the Maldives. Thus the climate finance actually

flows from a developing country to a developed country.

• The export credit insurance is provided to support Belgian companies, not to support developing

countries nor to support climate activities.

93 Delcredere Ducroire, ‘Mission’, available at: http://www.delcredereducroire.be/en/about-us/mission/


82

• In the case of a guarantee to a private loan, the OECD DAC proposes to attribute the amount of

private finance (loan or equity) covered by a publicly-backed guarantee as being fully mobilised by

the guarantee, irrespective of the percentage covered. Applying this attribution methodology has a

huge impact on the mobilisation figures – it could easily double or triple the total amount of

mobilised private climate finance by Belgium.



Which ministry is responsible Autonomous body with a State guarantee. The Board of

directors includes representatives from the Ministry of

Finance, Ministry of Foreign Affairs, Ministry of Economy,

Ministry of Development Cooperation, Government of

Flanders, Government of Wallonia and, Government of

Brussels-Capital Region.

Geographical focus Worldwide

Instruments/projects/actions Guarantees (export credit insurance)

Mobilisation (potential) If Delcredere-Ducroire’s instruments are included in the

measurements, the amount of mobilised private climate

finance by Belgium in 2013-2014 will increase fourfold (see

section 4.5.3).

Bottlenecks for this study Delcredere-Ducroire does not have a climate objective,

therefore data needs to be collected manually.

3.3.3 Flanders Investment & Trade (FIT)

Flanders Investment & Trade (FIT) promotes international enterprise in Flanders, by supporting the

international activities of Flemish companies and by attracting foreign investors to Flanders. FIT

facilitates investment projects in Flanders and gives support to Flemish export companies. The

international activities can be in any sector. FIT does not have a specific climate change objective94.

Subsidies for feasibility studies

Between 2013-2014, the FIT has identified nearly EUR 2 million in grant commitments for 7 climate-

relevant feasibility studies in ODA recipient countries. The subsidies account for 50% of the total

project finance. In principle, the other 50% is paid by the recipient itself. The recipient is either a local

government or a public-private partnership (PPP), which means some private finance could be

mobilised through the PPP. It is not clear at this stage if and how much private finance is mobilised by

this instrument.

Subsidies to support international activities

The FIT has another subsidy line that gives subsidies to Flemish companies to support international

activities, such as attending international congresses, translating project documentation to foreign

languages, and establishing prospects or sales entities abroad. In 2013 and 2014, it financed over a

hundred activities in the energy and environment sector in 42 Non-Annex I countries. Total

commitments were EUR 269,565. It is not known how much of this is climate-relevant. The average

support rate is 50% of the project costs, the other 50% is paid by the recipient itself.

94 Flanders Investment & Trade, available at: http://www.flanderstrade.com/


83

Subsidies for export of equipment

Another subsidy line supports the export of equipment to ODA recipient countries. Some of this

equipment could support climate activities, such as equipment for water purification by solar power.



Which ministry is responsible Minister-President of Flanders

Geographical focus EU, Worldwide

Instruments/projects/actions Advisory services, finance, OOF

Mobilisation (potential) If it has climate-relevant projects, it could mobilise private

finance directly.

Bottlenecks for this study No climate objective nor climate marker system in place,

data on private finance is confidential

3.3.4 Wallonia Foreign Trade and Investment Agency (AWEX)

Wallonia Foreign Trade and Investment Agency (AWEX) is in charge of promoting foreign trade and

attracting foreign investment in Wallonia. It is a public department of the Wallonia Region, established

by the order of April 1st 2004. It has three missions: 1) to support Walloon exports abroad; 2) to

prospect foreign investors; and 3) to promote Wallonia abroad95. It has a wide range of support

instruments to help businesses from Wallonia in their international activities: information, promotion,

prospection, formation, financial stimulation and international finance96. It has a global network of

more than 100 economic and commercial connections covering/spanning about a hundred markets and

about twenty international organisations. AWEX has no specific climate change objective, but does

provide services to the sustainable energy sector97.


Federal/regional Regional - Wallonia

Which ministry is responsible Walloon Minister for Foreign Trade

Geographical focus Worldwide

Instruments/projects/actions AWEX provides grants, which fall in the category Other

Official Flows (OOF)

Mobilisation (potential) If it has climate-relevant projects, it could mobilise private

finance directly.

Bottlenecks for this study No climate objective nor climate marker system in place,

data on private finance is confidential Documents

AWEX 2015, Guide des actions à l’étranger pour les

exportateurs wallons (French)

AWEX 2014, A partner for Wallonia’s international economic

development

95 Wallonia Foreign Trade and Investment Agency (2014), ‘AWEX, a partner for Wallonia’s international economic development’, Brussels, available at: http://www.awex.be/fr-BE/Publications/Brochures/Documents/AWEX_QUADRITYPIQUES%20DOM%20_EN_2014-DEF.PDF 96 AWEX, ‘Des aides pour soutenir les projets à l'exportation des entrepreneurs wallons’, available at: http://www.awex.be/FR-BE/NOS%20SERVICES%20%C3%80%20L'EXPORT/Pages/Nosservicesalexport.aspx 97 Wallonia Foreign Trade and Investment Agency (2015), ‘Guide des actions à l’étranger pour les exportateurs wallons, Brussels, available at: http://www.awex.be/fr-BE/Publications/Brochures/Documents/Programme%20d'actions%202015.pdf


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3.3.5 Brussels Invest & Export

Brussels Invest & Export is the strategic partner for Brussels-based exporters and foreign investors

throughout their process of international expansion. B-I&E provides five export incentives to Brussels

companies:

• Producing informative media for promoting foreign trade;

• Canvassing markets outside of the European Union;

• Taking part in trade fairs abroad;

• Taking part in calls for tender in markets outside of the European Union;

• Opening a representative office outside of the European Union.

B-I&E does not have a specific climate objective. It does however focus on some sectors that can be

climate-relevant, namely clean-tech and eco-construction.


Federal/regional Regional – Brussels Capital

Which ministry is responsible Minister of Economy/Foreign Trade of the Brussels-Capital

Region98

Geographical focus Countries outside of the European Union

Instruments/projects/actions B-I&E provides grants, which fall in the category Other

Official Flows (OOF)

Mobilisation (potential) B-I&E supports the private sector in starting up activities in

foreign countries, including countries in the South. If it has

climate-relevant projects, it could mobilise private finance

directly.

Bottlenecks for this study As the activities of the companies that benefit from B-I&E’s

instruments are very broad and that B-I&E currently doesn’t

collect data on this issue, it is very difficult to identify a

causal link with private finance mobilised by its instruments.

3.4 Other Actors

3.4.1 Belgian Corporation for International Investment (BMI/SBI)

BMI-SBI is a limited liability company under Belgian law, with 63% of its capital held by the Belgian

Government through the Belgian Federal Participation and Investment Company (Société Fédérale de

Participations et d’Investissement -SFPI / Federale Participatie- en Investeringsmaatschappij - FPIM)

and the National Bank of Belgium and 37% held by banking institutions and other private companies. Its

registered capital amounts to EUR 36 million.

Objective99

BMI-SBI’s objective is “to provide capital and know-how for international investments made by Belgian

private sector companies”. The mission of the BMI-SBI is to provide medium or long term co-finance to

business ventures set up by Belgian private companies abroad. BMI-SBI supports projects that are of

general economic interest, financially viable and that offer realistic prospects of profitability, whilst at

98 Brussels Invest & Export, ‘About Brussels Invest & Export’, available at: http://www.investinbrussels.com/en/index.cfm/about-us/about-brussels-invest-export/ 99 Belgian Corporation for International Investment, ‘Our Mission’, available at: http://www.bmi-sbi.be/en/


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the same time respecting the principle of sustainable development and social corporate responsibility.

BMI-SBI works on a demand basis and therefore acts reactively. It does not have a climate objective.

Instruments

BMI-SBI takes a minority participation in companies (equity) and can also provide subordinated debt.

Both instruments have a maturity of 5 to 10 years. Per investment, BMI-SBI can provide 500,000 to 5

million euro.

Mobilisation

The mobilisation potential of BMI-SBI is substantial. It currently has around 25 projects in its portfolio,

totalling EUR 25 million. Data on co-finance by the Belgian companies is confidential, but a rough figure

of what could be counted as mobilised is EUR 50 to 100 million for the whole portfolio100. However, it

currently does not have any climate-relevant investments in its portfolio. Thus the potential of

mobilising private climate finance is significant, but currently zero.

3.4.2 Participatie Maatschappij Vlaanderen (PMV)

PMV (Participatie Maatschappij Vlaanderen NV) is a Flemish investment company, which undertakes

commissions on behalf of the Flemish Region. It finances entrepreneurs from the beginning up to the

internationalisation of their business, and also invests in large infrastructure projects. Its focus is the

sustainable economic development of Flanders. PMV collaborates with private partners via funds and

public-private partnerships (PPPs). Particular emphasis is placed on sustainable energy, biotech,

cleantech, life sciences and infrastructure. It manages a portfolio of EUR 900 million in assets.

In 2006, PMV invested on behalf of the Flemish Region in the Asia Pacific Carbon Fund (managed by the

Asian Development Bank), with the aim of acquiring qualitative emission rights for the Flemish Region.

The fund acquired nearly 16 million emission rights with a contract value of USD 146.8 million. PMV’s

share is 17.65% with a value of USD 26.8 million. Projects took place in 7 countries, of which India and

China were the main countries. These projects account for 1.9 GW of sustainable energy power.

100 Based on correspondence with BMI-SBI.


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3.5 Data Availability from the Actors

Based on the agreed methodology, the following data is required for the quantification:

Table 4 - Required data for quantification

A. Project data

A1 Project name

A2 Reporting year

A3 Beneficiary country

A4 Total budget of fund/project*

*for multilateral fund: total budget (incl. Belgian share)

B. Climate relevancy

B1 Rio marker(s):

Mitigation / adaptation

Principle / significant (%)

C. Financial data

1. Public finance by Belgium

C1.1 Financial instrument(s)

C1.2 Point of measurement:

Commitment / disbursement

C1.3 Expenditures to project 2013-2014*

*for project by multilateral fund: Share of BE in fund (%)

C1.4 Grant equivalent of expenditures

2. Public finance by other donors


C2.2 Expenditures to project 2013-2014

C2.3 Origin of finance

(developed country, developing country, host country)

C2.4 Grant equivalent of expenditures

3. Private finance


C3.2 Expenditures to project 2013-2014

C3.3 Origin of finance

(developed country, developing country, host country)

3.5.1 Assessment of data availability

Not all required data are directly available from the databases of the stakeholders. For this study, some

data were attained by manual processes, other data were not available at all. This is not surprising, as

this is the first time that the Government of Belgium has collected data on the mobilisation of private

climate finance. In order to improve data availability in the future, we have made an inventory of the

data availability from all the stakeholders. We have grouped the indicators in the following categories:

Dark green Data and information easily accessible: already available in current database;

Light green Data and information accessible manually: available in documentation or external databases;

involves a manual process to get the needed data;

Yellow Data and information not available but that could be collected in the future (short-term);

Light red Data and information not available but could be collected in the future (long-term);

Dark red Data and information not available / Commercially secret / Other reason.

A: Project data: In general, the project data are easily

extracted from the databases of the actors. Total budget of

fund/project (A4) can pose problems for multilateral projects that are administered by external

parties. Usually, only the actor’s own finance to the project is known.

Dark green Light green


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B: Climate relevancy: Climate relevancy is easily available from the

actors that allocate large budgets to development cooperation projects

(DGD and Flanders). For all the other actors, there is currently no Rio marker or other climate marker

system in place, thus all projects have to be screened and assessed manually on their climate

relevancy. This also applies to the actors that are currently included in the MMR report101 besides DGD

and Flanders (Brussels Environment, AWAC, FSP Environment, and some budget lines by Finexpo). BIO

and Finexpo have indicated that a climate MRV system could be implemented in their databases.

C1: Public finance by Belgium: In general, the financial instruments and point of

measurement are easy to indicate, as well as expenditures to bilateral projects.

For multilateral funds, external databases have to be consulted to find out the share of Belgium in the

fund. This is related to the total budget of fund/project (A4) described above. The grant equivalent of

expenditures is not something that can be found in the databases and involves a manual process.

C2: Public finance by other donors: Only BIO is able to extract

the expenditures to projects by other public actors from its

database. It has data available on all the co-finance in loan syndications. With a manual process it is

possible to identify the geographical origin of finance as well. For Finexpo, there are no other public

donors involved thus this category is not applicable. Other actors often do not have a tracking system in

place for this and are dependent on the administration by external parties, of which many do not have

a proper MRV system in place either. Again, the grant equivalent of expenditures is not available from

any database at the moment.

C3: Private finance: This is the most difficult data to extract

and falls mostly in the light red / dark red categories. Data is

not tracked in a systematic manner and is difficult to report on due to confidentiality issues. BIO and

Finexpo are the only actors that have access to co-finance by commercial parties, although the

distinction between public co-finance (C2) and private co-finance (C3) often has to be made manually,

because it is not separated automatically in the databases.

3.6 Conclusion

The Belgian landscape shows a fragmented picture. There are many different actors that could play a

relevant role. For the federal and regional actors that are active in development cooperation, it is

relatively easy to identify public climate finance for developing countries. However, climate finance

provided by these actors usually does not lead directly to mobilised private climate finance. Only for

the Belgian development bank BIO it is possible to measure direct mobilisation. The actors that are

active in environment and climate change provide public climate finance similar to the actors active in

development cooperation, but smaller amounts. It is also difficult for them to measure direct

mobilisation. In contrast, actors in finance, export and investment have a direct link to the private

sector. They provide support for Belgian companies and work together with commercial banks. But they

do not have a climate or development cooperation objective, which makes it harder to identify projects

that are relevant for this study. Finexpo is the only actor in this category that provides Official

Development Assistance (ODA) and can report on mobilised private climate finance at the moment.

101 Government of Belgium, ‘MMR Report 2013-2014, Report on financial and technology support provided to developing countries under the Monitoring Mechanism Regulation (MMR)’, Communication with European Commission.

Dark green Light green Yellow

Dark green Light green

Light green Yellow Light red Dark red

Light green Yellow Light red Dark red


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4 Results of the Data Assessment 4.1 Overview of the results

Table 5 - Overview of Belgian public climate finance and mobilisation of private climate finance

2013 2014 2013-2014

1. Bilateral channels


… public finance that mobilised private climate finance 21.92 15.08 36.99

Mobilised private climate finance 7.67 10.54 18.21


2. Multilateral channels

Total public finance provided by Belgium* 34.94 56.58 91.52

… public finance that mobilised private climate finance N/A N/A N/A

Mobilised private climate finance N/A N/A N/A

Leverage factor N/A N/A N/A N/A = not available * This does not include core funding to international organisations, of which the climate-relevant share is not specified. This figure is therefore an underestimation of the total public climate finance provided by Belgium through multilateral channels.

Mobilisation of private climate finance through bilateral channels

In 2013 and 2014, Belgium has provided EUR 106.61 million climate finance through bilateral channels

and EUR 91.51 million through multilateral channels102. We were able to identify EUR 36.99 million

public finance that has mobilised private climate finance directly. This finance was provided by

concessional and non-concessional loans from Finexpo and BIO. Together, it has mobilised an estimated

EUR 18.21 million private climate finance.

Public climate finance indirectly mobilising private finance

The majority of Belgian climate finance consists of grants and has a strong focus on policy support and

capacity building. These grants are provided with the objective of development cooperation and are

not directly aimed at private finance mobilisation. Belgium has specific partner countries, which often

are LDCs. In 2013 and 2014, Belgium allocated more than half of its bilateral climate grants to LDCs.

These countries have a great need for policy support and capacity building programmes to address

climate change and other challenges.

102 These figures are based on the MMR report 2013-2014 for bilateral finance and climate-specific finance through multilateral channels, and additional data provided by BIO and Finexpo. (Government of Belgium, ‘MMR Report 2013-2014, Report on financial and technology support provided to developing countries under the Monitoring Mechanism Regulation (MMR)’, Communication with European Commission.)


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Figure 12 – Public bilateral grants per region and to LDCs

The grants are generally provided before private investments are made. They can be of major

importance to attracting private climate finance, for example by supporting new legislation for

renewable energy sources in recipient countries. This can build the enabling environment that will

allow scaling up of climate finance. However, it is difficult to quantify the impact they have, for

various reasons:

• It is very challenging to link private investments directly back to the initial Belgian grants;

• There is usually a large time gap between the policy support and the private investment;

• The private investment decision may be triggered by several factors, such as a more stable interest

rate, or the availability of new data on local wind speed or solar radiation, and not just the policy

support given by Belgium;

• The grant programmes do not include quantified private finance objectives, which means there are

no MRV systems in place to track mobilised private finance by these grants.

As such, we are not able to quantify mobilised private finance by the instruments used by the DGD, the

FPS Environment, the Flemish department of Foreign Affairs, AWAC and Brussels-Environment. The

impact of grants on mobilisation of private finance is therefore under-evaluated at the moment,

despite its importance for climate action, especially in the LDCs. However, even though it is difficult to

precisely assess the mobilisation impact through such instruments, the importance of providing climate

finance to the most vulnerable countries should not be overlooked.

Mobilisation of private climate finance through multilateral channels

There was no data available on climate finance mobilised by Belgium through multilateral channels. We

were however able to make a first estimation of mobilised private finance by Belgium’s contributions to

GEF, which will be discussed in section 4.6.

4.2 Bilateral climate finance

4.2.1 Overview of Belgian bilateral public and mobilised private climate finance

Table 6 provides an overview of bilateral public and mobilised private climate finance by Belgium. The

public and mobilised private finance is indicated per financial instrument, by region and by type of

climate change activity (mitigation and adaptation).


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Table 6 - Overview of Belgian bilateral public and mobilised private climate finance (EUR millions)

2013 2014

Mitigation Adaptation Mitigation Adaptation

No. of

projects Public

Mobilised

private Public

Mobilised

private Public

Mobilised

private Public

Mobilised

private

Grants* 586 15.15 n.a. 19.71 n.a. 11.99 n.a. 22.76 n.a.

Africa 292 11.03 n.a. 12.02 n.a. 7.89 n.a. 11.31 n.a.

Asia 48 0.67 n.a. 2.38 n.a. 1.03 n.a. 3.88 n.a.

Latin America 126 0.85 n.a. 3.17 n.a. 0.34 n.a. 4.84 n.a.

Mediterranean

region 19 1.10

n.a. 0.96

n.a. 1.37

n.a. 0.95

n.a.

Multiregional 101 1.51 n.a. 1.17 n.a. 1.37 n.a. 1.78 n.a.

Non-

concessional

loans

2 17.50 2.96 7.25 0.96

Africa 1 7.25 0.96

Asia 1 17.50 2.96

Latin America 0

Mediterranean

region 0

Concessional

loans 13 1.53 2.84 2.88 1.87 1.37 2.54 6.45 7.03

Africa 5 1.22 2.27 2.33 0.85 1.12 2.09 5.23 4.76

Asia 4 0.22 0.41 0.37 0.68 0.17 0.32 1.08 2.00

Latin America 3 0.09 0.16 0.18 0.33 0.07 0.14 0.14 0.25

Mediterranean

region 1 0.01 0.01

* Expenditures classified as “cross-cutting” have been equally divided between mitigation and adaptation.


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Figure 13 - Bilateral public climate finance provided by Belgium per instrument and region (EUR millions)

Figure 13 shows the division of regions per instrument. Most public finance went to Africa, followed by

Asia. The amount of grants allocated to climate activities is quite stable between years. Non-

concessional and concessional loans for climate projects fluctuate substantially depending on the type

of projects that start each year. Non-concessional loans were only provided to two projects, but the

amounts per project are substantially higher than grant and concessional loan projects and can

therefore make a big impact on the overall division between regions.

4.2.2 Overview and analysis of bilateral instruments directly mobilising private finance

Tables 7 and 8 below give an overview of the climate finance per actor and instrument that has

mobilised direct private climate finance. Finexpo’s state-to-state loans have reported mobilisation of

private climate finance, but not for the years 2013-2014. It financed two adaptation projects in North

Sudan (EUR 1.88 million in 2013) and Togo (EUR 2.67 million in 2014). Therefore, the leverage for this

instrument is zero for these years. Section 4.3 provides more information and analysis.


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Table 7 - BIO’s non-concessional loans (EUR millions)

2013 2014 2013-2014 Leverage

Public

Mobilised

private Public

Mobilised

private Public

Mobilised

private

Total

(all non-concessional

loans) 17.50 2.96 7.25 0.96 24.75 3.92 0.16

By region

Africa — — 7.25 0.96 7.25 0.96 0.13

Latin America and

Caribbean — — — — — —

Asia 17.50 2.96 — — 17.50 2.96 0.17

Mediterranean Region — — — — — —

Mitigation or adaptation

Mitigation 17.50 2.96 7.25 0.96 24.75 3.92 0.16

Adaptation — — — — — —

By recipient

To Non-Annex I countries 17.50 2.96 7.25 0.96 24.75 3.92 0.16

To ODA recipients 17.50 2.96 7.25 0.96 24.75 3.92 0.16

To LDCs 17.50 2.96 — — 17.50 2.96 0.17

To SIDS — — — — — —

Table 8 - Finexpo’s interest rate subsidies (EUR millions)

2013 2014 2013-2014 Leverage

Public

Mobilised

private Public

Mobilise

d private Public

Mobilised

private

Total

(interest rate subsidies) 2.54 4.72 5.16 9.58 7.70 14.30 1.86

By region

Africa 1.68 3.12 3.69 6.85 5.37 9.97 1.86

Latin America and

Caribbean 0.26 0.49 0.21 0.39 0.47 0.88 1.86

Asia 0.59 1.10 1.25 2.33 1.85 3.43 1.86

Mediterranean Region — — 0.01 0.01 0.01 0.01 1.86

Mitigation or adaptation

Mitigation 1.49 2.78 1.34 2.49 2.84 5.27 1.86

Adaptation 1.04 1.94 3.82 7.09 4.86 9.03 1.86

By recipient

To Non-Annex I countries 2.54 4.72 5.16 9.58 7.70 14.30 1.86

To ODA recipients 2.54 4.72 5.16 9.58 7.70 14.30 1.86

To LDCs 0.02 0.04 0.02 0.03 0.04 0.08 1.86

To SIDS 0.11 0.21 0.09 0.17 0.20 0.37 1.86


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4.3 Analysis of the results on bilateral climate finance

4.3.1 Instrument analysis

Figure 14 - Mobilisation of private finance per bilateral instrument (EUR millions, 2013-2014)

In 2013 and 2014, Belgium mobilised EUR 18.21 million private climate finance for developing countries.

The majority, 78% was mobilised by concessional loans provided by Finexpo. Non-concessional loans

provided by BIO mobilised the other 22%. Finexpo has a high mobilisation rate, especially for its interest

rate subsidies. It also has a larger climate-relevant portfolio than BIO.

Although less bilateral public climate finance was provided in 2014 (EUR -7 million), its mobilisation of

private finance was higher (+ EUR 2.9 million). This can be explained by Finexpo’s interest rate subsidies,

which have a high mobilisation impact. Finexpo provided EUR 2.5 million climate-relevant interest rate

subsidies in 2013 and EUR 5.1 million in 2014 – more than twice as much. In contrast, public finance and

mobilisation by BIO’s non-concessional loans and Finexpo’s state-to-state loans was considerably lower

in 2014.

4.3.2 Geographical analysis

Figure 15 - Mobilisation of private finance by bilateral instruments per region (EUR millions, 2013-2014)

Most private climate finance (70%) was mobilised in Africa, followed by Asia (24%) and Latin America

and the Caribbean (6%). EUR 0.01 million was mobilised in the Mediterranean region (not visible on

charts).


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Mobilised private finance by Belgium, 2013-2014 TOP COUNTRIES (more than 85% of the total portfolio)

Non-concessional loans (BIO)

1. Bangladesh (EUR 2.96 million) 2. Sub-Saharan Africa (EUR 0.96 million)

Concessional loans (Finexpo)

1. Kenya (EUR 5.02 million) 2. Cameroon (EUR 4.55 million) 3. Sri Lanka (EUR 1.42 million) 4. Vietnam (EUR 1.25 million) 5. Philippines (EUR 0.68 million)

TOP SECTORS (100% of the total portfolio) Non-concessional loans (BIO)

1. Renewable energy (EUR 3.92 million)

Concessional loans (Finexpo)

1. Drinking water supply (EUR 7.03 million) 2. Electrical transmission/distribution

(EUR 2.86 million) 3. Water management103 (EUR 2.13 million) 4. Renewable energy (EUR 2.02 million) 5. Waste management (EUR 0.23 million)

Mobilisation of private climate finance in LDCs

Table 9 shows the amount of public finance that mobilised private finance in Non-Annex I countries,

ODA recipient countries, Least Developed Countries (LDCs) and Small Island Developing States (SIDS).

Table 9 - Overview of bilateral public and mobilised private climate finance by Belgium to Non-Annex I

countries, ODA recipient countries, LDCs and SIDS (EUR millions)

2013 2014 Total

Public

Mobilised

Private Public

Mobilised

Private Public

Mobilised

Private

By recipient

To Non-Annex I countries 56.78 7.67 49.83 10.54 106.61 18.21

To ODA recipients 56.78 7.67 49.83 10.54 106.61 18.21

To LDCs 36.33 3.00 21.18 0.03 57.51 3.04

To SIDS 0.47 0.21 0.45 0.17 0.93 0.37

Figure 16 - Mobilisation of private finance by bilateral instruments to LDCs and others (EUR millions, 2013-

2014)

There are no differences between mobilisation in Non-Annex I countries and ODA recipient countries.

This means that no mobilised climate finance went to countries that are only listed as Non-Annex I

countries104 nor to countries that are only listed as OECD DAC eligible recipients105. In total, 17% of

private climate finance was mobilised in Least Developed Countries and 2% in Small Island Developing

103 Water management includes dredging and sanitation activities. 104 Andorra, Bahamas, Bahrain, Barbados, Brunei Darussalam, Israel, Kuwait, Oman, Qatar, Korea, Saint Kitts and Nevis, San Marino, Saudi Arabia, Singapore, Trinidad and Tobago, United Arab Emirates. 105 Belarus, Kosovo, Montserrat, Saint Helena, Tokelau, Turkey, Ukraine, Wallis and Futuna.


96

States. The EUR 3.04 million that was mobilised in LDCs consisted of two projects in Bangladesh: BIO

co-financed an energy project and Finexpo provided interest rate subsidies for a dredging project.

Potential of indirect mobilisation in these countries

DGD and Flanders’ climate finance is sometimes allocated to the same countries as the ones where we

have identified mobilised private climate finance. From the top countries indicated above, DGD

provided grants to Kenya, Cameroon, Vietnam and the Philippines. Flanders was also active in Kenya

and Vietnam. Even though the current projects differ, it shows potential for cooperation between these

actors which could increase the mobilisation of private finance in the future by tackling investment

barriers in a coherent approach.

4.3.3 Mitigation and adaptation

Interestingly, mobilisation was more or less balanced between mitigation and adaptation. In general,

mobilisation for mitigation activities is substantially larger than for adaptation activities, which has

been shown by several other studies (cf. The Netherlands106, Denmark107, France, OECD-CPI108). The

strong influence of Finexpo’s instruments on the total mobilisation figures can explain this. Belgium’s

private sector has a strong international presence in several water-related sectors, which is supported

by Finexpo’s instruments (see more below).

4.3.4 Mobilisation by non-concessional loans

Figure 17 - Mobilisation of private finance by bilateral non-concessional loans, per region and

mitigation/adaptation (EUR millions, 2013-2014)

In 2013 and 2014, non-concessional loans mobilised private climate finance in two projects: one in

Bangladesh and one in Sub-Saharan Africa. They both took place in the renewable energy sector, which

means mobilisation occurred for mitigation activities only. This represents BIO’s climate change

portfolio well – between 2010 and 2014, all funding identified as climate-relevant funding went to

mitigation projects. It also resonates with the general observation that mitigation projects attract more

finance by the private sector than adaptation projects. The renewable energy sector in particular has

attracted a lot of private finance109.

106 Trinomics (formerly Triple E Consulting) (2014), ‘Pilot: Tracking Mobilised Private Climate Finance’,available at: http://trinomics.eu/wp-content/uploads/2015/06/Pilot-Tracking-Mobilised-Private-Climate-Finance.pdf 107 Trinomics (2015), ‘Pilot Study of Private Finance Mobilised by Denmark for Climate Action in Developing Countries’, unpublished. 108 OECD-CPI (2015), ‘Climate finance in 2013-14 and the USD 100 billion goal’, available at: http://www.oecd.org/environment/cc/OECD-CPI-Climate-Finance-Report.pdf 109 See also the Case Study B: Rajasthan Sun Technique Energy


97

4.3.5 Mobilisation by concessional loans

Figure 18 - Mobilisation of private finance by bilateral concessional loans, per region and

mitigation/adaptation (EUR millions, 2013-2014)

In 2013 and 2014, concessional loan instruments mobilised private climate finance in 37 climate-

relevant projects. The total EUR 14.30 million private finance was mobilised by Finexpo’s interest rate

subsidies only. Finexpo’s State-to-State loans have not registered mobilised private finance in 2013 and

2014. The two projects that were started in 2013 and 2014 do not have a commercial loan alongside

Finexpo’s loan. This is rather uncommon: out of the eight climate-relevant State-to-State loans that

were provided over the period 2009-2014, these two were the only ones without a commercial loan. For

the other six, the share of the commercial loan varied between 41% and 50%. Therefore, the

mobilisation impact of state-to-state loans is in general a factor between 0.7 – 1.

All mobilisation figures by Finexpo’s interest rate subsidies are estimates only. For interest rate

subsidies, it has not been possible to acquire accurate data on the share of private finance. Interest

rate subsidies are required to bring the level of concession of the total project finance to 35%. Since

the rest of the finance consists of non-concessional finance by commercial parties, the subsidies should

provide at least 35% of the total investment. For now, Finexpo has taken this requirement as the

estimated public share, which means the other 65% can be considered as mobilised private finance. The

mobilisation impact of Finexpo’s interest rate subsidies has therefore been calculated by a standard

factor of 1.86: for each euro Finexpo provides as interest rate subsidy, EUR 1.86 is mobilised. Further

research is needed to check and refine this approximation.

The largest mobilised private flows went to Kenya (EUR 5.0 million, 4 projects) and Cameroon (EUR 4.6

million, 6 projects). EUR 1.4 million was mobilised in Sri Lanka (2 projects) and EUR 1.2 million in

Vietnam (15 projects). Private climate flows to other countries all remained under EUR 1 million.

Finexpo’s mitigation projects mostly involved renewable energy investments (mitigation principal) and

improvements to electricity infrastructure (mitigation significant, counted for 50% by DGD’s method).

The adaptation projects consist of dredging and sanitation works (counted for 30% as climate finance),

and potable water projects (50%).

In 2014, most finance went to adaptation projects. Nearly EUR 2 million was provided to 5 drinking

water projects in Cameroon, contributing nearly 40% of the adaptation finance in this year. Belgium’s

private sector has strong expertise in drinking water and water management, such as dredging. This

helps explain the strong presence of adaptation-related finance.


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4.4 Multilateral climate finance

Belgium contributes to several multilateral channels. Table 10 gives an overview of the climate-

relevant funding to multilateral climate change funds, multilateral financial institutions and specialised

United Nations bodies for the years 2013 and 2014. There are two types of funding from Belgium: core

contributions, of which only part is climate-relevant, and contributions earmarked specifically for

climate, which are 100% climate-relevant. In total, Belgium provided EUR 91.5 million of 100% climate-

relevant finance through multilateral channels in 2013-2014. This does not include the core funding, of

which the climate-relevant share is not specified. Thus this amount is an underestimation and would be

a lot higher if the climate-relevant part of the core funding was calculated and included in the total

sum. Of the core funding to multilateral development banks, a first estimate of Belgian climate-

relevant contributions is EUR 84.5 million. Another estimated EUR 60.6 million climate finance is

channelled through the GEF. These estimates will be explained further in this section, as well as a first

estimate of mobilised private climate finance through the GEF.


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Table 10 – Public financial support: contributions through multilateral channels in 2013 and 2014

Donor funding

2013 2014

Core Climate-

specific Core

Climate-

specific

Multilateral climate change funds

Global Environment Facility 17.00 18.60

Least Developed Countries Fund 12.00 12.00

Special Climate Change Fund 12.00

Adaptation Fund 1.00

0.50*

0.25*

Green Climate Fund 40.00

0.60*

UNFCCC Trust Fund for Supplementary Activities 0.07 0.08

Other multilateral climate change funds

International Partnership on Mitigation and MRV 0.02

IFAD: budget support for the “Adaptation for Smallholder

Agriculture Programme” 6.00 1.00

Multilateral financial institutions, including regional development banks

World Bank 148.10 148.75

International Finance Corporation

African Development Bank 35.43 33.99

Asian Development Bank 8.03 7.93

European Bank for Reconstruction and Development 0.57

Inter-American Development Bank 0.90

European Investment Bank - EIB 9.81 4.15

European Development Fund (EOF/EDF/FED) 104.15 111.02

Specialised United Nations bodies

United Nations Development Programme 11.55 19.00

United Nations Development Programme: National Biodiversity

Strategies and Action Plans 0.12 0.04

United Nations Environment Programme 4.55 4.00

Food and Agricultural Organisation 4.25 5.43

FAO (several projects) 0.41

International Fund for Agricultural Development 8.00 8.00

World Food Programme - Immediate Response Account 5.00 7.25

UNESCO (several projects) 1.75 0.78

ICRAF (several projects) 0.20 0.81

ILO (several projects) 0.97

One UN Fund Malawi 0.42

The SEED initiative (UNEP, UNDP and IUCN) 0.41

International Renewable Energy Agency (IRENA) 0.08

UNEP Resource panel 0.03

Consultative Group on International Agricultural Research 7.40 8.00

Total contributions through multilateral channels 34.94 56.58 * Other Official Flows (OOF); Source: Belgium MMR Report 2013-2014

DGD FLA FPS Envi BRX WAL

91.8% 6.6% 0.7% 0.7% 0.3%


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4.4.1 Multilateral development banks

The biggest sums are going to the multilateral development banks (MDBs) and the European

Development Fund (EDF). There are core contributions, thus we still need to know how much is climate-

relevant. In their Joint Report on MDB Climate Finance, the MDBs have given an indication of the

climate-relevant share of their total portfolios for 2014. This is shown in Table 11. We have used these

percentages to arrive at the climate-relevant shares of the Belgian contributions to the MDBs.

Table 11 – Climate-relevancy of MDB portfolios in 2014 (USD million)

MDB

Adaptation

Finance

Mitigation

Finance

Total Climate

Finance MDB Finance*

Total Climate Finance

as a % of MDB Finance

ADB 719 2,137 2,856 22,930 12%

AfDB 756 1,160 1,916 7,000 27%

EBRD 230 3,882 4,111 11,448 36%

EIB 130 5,083 5,214 22,856 23%

IDB 109 2,352 2,461 14,483 17%

IFC 18 2,540 2,558 17,495 15%

WB 3,106 6,122 9,229 40,843 23%

Total 5,069 23,276 28,345 137,055 22% * MDB finance includes MDB own resources and external resources for all its financing (including non-climate commitments). Source: Joint Report on MDB Climate Finance 2014

There is very little information available on mobilised private climate finance via multilateral channels.

It is therefore not possible to calculate Belgium’s contribution. However, it is possible to make a first

estimate of mobilised private climate finance through the GEF, which is discussed below.

Table 12 – Extrapolated climate-relevancy of Belgium’s core contributions to the MDBs (EUR)

2013 2014

MDB Core Climate-relevant (est.) Core Climate-relevant (est.)

ADB 35,430,310 4,251,637 33,987,573 4,078,509

AfDB 8,028,505 2,167,696 7,933,541 2,142,056

EBRD 569,457 205,005

EIB 9,805,031 2,255,157 4,146,560 953,709

IDB 896,000 152,320

IFC

WB 148,099,084 34,062,789 148,747,082 34,211,829

Total 43,094,605 41,386,102

4.4.2 Global Environment Facility: first estimate of mobilised private finance by Belgium

There is some data available from GEF and GEF-managed funds (LDCF, SCCF and NPIF) on mobilised

private climate finance for the period 2013-2014. Belgium contributes to the GEF, LDCF and SCCF and

therefore part of this mobilisation can be attributed to it. In 2013-2014, it contributed EUR 35.6 million

to the GEF, and EUR 24 million and 12 million to the LDCF and SCCF respectively110. GEF’s data is not

detailed enough to derive mobilisation figures per fund. We can however give a first estimate, based on

these aggregate figures, of what could be attributed to Belgium.

110 Government of Belgium, ‘MMR Report 2013-2014, Report on financial and technology support provided to developing countries under the Monitoring Mechanism Regulation (MMR)’.


101

In order to do this, we first need to estimate Belgium’s share of GEF’s climate-relevant grants. The

contributions to LDCF and SCCF are 100% climate-relevant, but the contribution to GEF is not. We

therefore use the same percentage climate-relevancy as GEF’s project commitments. From GEF’s EUR

1557 million project commitments, EUR 1074 is climate-relevant, in other words 69%. 69% of Belgium’s

core contribution to GEF can therefore be accounted as climate-relevant. This leads to a climate-

relevant contribution from Belgium to GEF of EUR 24.56 million (see table 13). In total, Belgium’s

contributions to GEF, LDCF and SCCF are climate-relevant for EUR 60.56 million. With this EUR 60.56

million, Belgium takes a share of 5.64% of GEF’s total climate-relevant project commitments.

Table 13 – Climate-relevant contributions by Belgium to GEF in 2013-2014 (EUR million)

Fund Total Climate-relevancy

Calculated climate-relevant

contribution by BE to GEF

GEF 35.60 ~69% 24.56

LDCF 24.00 100% 24.00

SCCF 12.00 100% 12.00

Total 71.60 60.56

Having estimated Belgium’s share of GEF’s climate finance, it is possible to calculate Belgium’s share of

the mobilisation of private finance by GEF. “Other co-finance” is viewed as public, and therefore part of

the attribution. Because of this, Belgium’s share of total public finance is very small: EUR 60.56 million

of a total public funding of EUR 8,983.98 million, or 0.67%. In total EUR 4.04 million of mobilised private

climate finance can be attributed to Belgium (see Figure 19 and Table 14 below).

Figure 19 – Illustration of calculations for mobilised private finance by Belgium via multilateral channels


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Table 14 – Climate-relevant finance mobilised by GEF in 2013-2014 (EUR million)

Name of project/fund GEF grant

Other co-

finance

Share of

GEF in

public

finance

Private

co-

finance

Private

finance

mobilised by

Belgium

All project commitments 2013-2014 1557.48 10118.00 956.19

Climate-relevant project commitments 1074.49 7909.49 11.96% 599.03 ~4.04

Of which mitigation principal 387.30 3485.69 10.00% 497.31 ~2.80

Of which adaptation principal 312.70 1947.80 13.83% 47.47 ~0.37

Of which non-principal climate-related

finance* 374.49 2476.00 13.14% 54.25 ~0.16

* We have calculated this by subtracting principal mitigation and adaptation finance from the total climate-relevant commitments

4.5 Results of the Sensitivity Analyses

4.5.1 Value public instruments based on their level of concession

There is a strong difference between concessional and non-concessional instruments: a concessional

instrument entails a flow from a developed country to a developing country (North-South flow) that

does not flow back, whereas non-concessional finance will eventually have to be paid back from South

to North. The cost of concessional finance is therefore a lot higher for developed countries than the

cost of non-concessional finance, and a lot more attractive for developing countries. In the Belgian

methodological framework, the calculations treat concessional and non-concessional finance in the

same way; with all instruments valued at face value. This creates an incentive for developed countries

to provide low-cost non-concessional instruments with high leverage rates, such as guarantees and

senior debt loans. These instruments do not necessarily benefit climate activities the most. Especially

in the LDCs, climate finance is still highly dependent on grants111.

Methodology for valuing public finance based on concessionality

To provide a stronger incentive for concessional finance, public instruments could be valued based on

their level of concession. This method has strong similarities to the modernised OECD-DAC methodology

of ODA reporting112. In the modernised method, ODA comprises only grants and grant equivalents of

loans. In the new method, the grant element of a concessional loan “is defined as the difference

between the face value of the loan and the discounted future debt service payments to be made by the

borrower”113. In the old method, the discount rate was 10%. In the new method, the discount rates are

differentiated by income group, with 5% as a base (current IMF discount rate) plus adjustment factors

of:

4% for LDCs and other Low Income Countries (LICs);

2% for Lower Middle Income Countries and Territories (LMICs);

1% for Upper Middle Income Countries and Territories (UMICs).

111 For least-developed countries ODA represents over 70% of available external finance, and more than one-third of total public revenue and expenditure. Belgian Development Cooperation (2015), ´3rd Conference on Financing for Development, Background Note ODA and Fragile Environments, The Shift of Development Finance and Assistance in the post-2015 Agenda’, Addis Ababa, available at: http://webapps01.un.org/ffd3/sideevents/wp-content/uploads/sites/2/2015/07/Background-note-ODA-and-fragile-environments.pdf 112 We base our sensitivity analysis on the modernized methodology for ODA reporting, as was agreed by DAC members at the High Level Meeting in December 2014. For now, ODA will be reported by both the old and new method. The new method will become the standard for reporting from 2018 onwards. Graves, C., ‘Why modernise official development assistance?’, OECD Observer, available at: http://www.oecdobserver.org/news/fullstory.php/aid/4956/Why_modernise_official_development_assistance_.html 113 DAC Working Party on Development Finance Statistics 2015, ‘Implementation of the DAC HLM Concessionality Agreement and Implications of the Grant Equivalent System’, DCD/DAC/STAT (2015) 5, available at: http://www.oecd.org/officialdocuments/publicdisplaydocumentpdf/?cote=DCD/DAC/STAT(2015)5&docLanguage=En


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The discount rate is used both for assessing the level of concession of a loan and for calculating its ODA

grant equivalent.

In the old method, the threshold for ODA eligibility was set at a grant element of 25%. In the new

method, loans to LDCs and other LICs need to have a grant element of at least 45%, loans to LMICs a

grant element of at least 15%, and loans to UMICs a grant element of at least 10%. Loans below these

thresholds are referred to as non-concessional loans.

Implications for data

Finexpo’s instruments are by nature concessional and ODA-eligible. Its grant equivalent is at least 35%,

and at least 50% for LDCs. BIO’s instruments are by nature non-concessional, and therefore fall back to

zero in this sensitivity analysis.

Table 15 – Public climate finance at face value and grant equivalent (EUR million)

Concessionality of

public instrument

Grant equivalent of public finance

Total 113.61 66% (average) 74.59

By financial instrument

Grants 69.62 100% 69.62

Concessional loans 12.24 35%-50% 4.97

Non-concessional loans 31.75 0% 0

In total, Belgium provided EUR 114 million bilateral public climate finance over the period 2013-2014. If

the valuation is based on grant equivalents, this contribution shrinks down to EUR 75 million – an

average level of concession of 66%. Grants are valued higher than other instruments where (part of the)

finance needs to be paid back. If all of the finance eventually flows back, such as in the case of non-

concessional loans, the grant equivalent is zero. This method ‘rewards’ grants by valuing them higher as

they discourage the use of non-concessional instruments. In bilateral projects, 100% of private finance

is attributed to Belgium. Therefore, the figures for mobilised private finance remain the same.

This is different for multilateral projects. Attribution based on level of concession could impact the

amount of mobilised private finance per donor. This is only relevant if public instruments with different

levels of concession are provided to the same project. Donors who provide 100% concessional

instruments would be rewarded with a larger share of the mobilised private finance than donors with

lower levels of concession. Actors with non-concessional instruments would have any mobilised finance

attributed to them if others have provided concessional instruments.

4.5.2 Disbursements vs commitments

There are two points of measurement that could be used for measuring climate finance: the point of

commitment and the point of disbursement. The final disbursement to a climate project can be

considerably smaller than the initial commitment made. Therefore, choosing the point of measurement

can have a considerable impact on the final figures reported, both for the public climate finance as

well as for the mobilised private climate finance.


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Most data on climate finance by Belgium is reported on disbursement level. The only exception was the

non-concessional loans by BIO, which were reported on commitment level. We have not received data

from BIO at disbursement level, but in general, BIO has indicated an erosion rate of about 10% between

commitment and disbursement. There is no data available on the erosion of the related mobilised

private finance. But we estimate that the erosion rate is similar to the public erosion rate, because the

erosion of public finance is mostly caused by the same reasons as the erosion of private finance. We do

not have data on the difference between disbursement level and commitment level for Finexpo and

DGD, who report at disbursement level. We can therefore only make a quantified estimate based on the

difference for BIO. This is presented in Table 16 below.

Table 16 – Public climate finance per instrument at commitment and disbursement level (EUR millions)

2013 2014

Commitment Disbursement Commitment Disbursement

Public Mobilised

private Public

Mobilised

private Public

Mobilised

private Public

Mobilised

private

Grants 34.86 n.a. 34.75 n.a.

Non-

concessional

loans

17.50 2.96 15.75 2.66 7.25 0.96 6.53 0.86

Concessional

loans 4.41 4.72 7.82 9.58

Table 17 – Total public climate finance reported and at disbursement level only (EUR millions)

Disbursements

(preferred) or

commitments

Disbursement

level only

Bilateral channels

Total public finance by BE 106.61 104.12

… public finance that mobilised private climate finance 36.99 34.50

Mobilised private climate finance 18.21 17.82

Leverage factor 0.49 0.52

4.5.3 Including export credit insurance instruments

In 2013 and 2014, Delcredere-Ducroire provided export credit insurance to three climate mitigation

investments in developing countries (see Table 18 below). The credit value amounted to EUR 46 million

in 2013 and EUR 43 million in 2014, which could be considered as mobilised private climate finance by

Belgium.


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Table 18 - Climate-relevant export credit insurance by Delcredere-Ducroire, 2013-2014

Year Country

Credit

value

Amount

covered by

Delcredere

insurance Project description

2013 South Africa EUR 37 M EUR 37 M

Delivery of equipment: thermo-solar boiler, for the thermo-

solar power plant “tower” of a 50MWe facility at Upington

2013 South Africa EUR 9 M EUR 9 M

Design and delivery of equipment: air cooled condenser -

Solar POFADDER Thermal plant

2014 Chile EUR 43 M EUR 43 M

Delivery of equipment to a new solar power plant (desert

of Atacama)

Including these sums would have a very large effect (an increase of 589%) on the level of private

climate finance mobilised by Belgium. The decision on whether or not to include this instrument in the

final methodology should therefore be taken with care.

Table 19 - Total mobilised private finance, excluding and including export credit insurance (EUR millions)

2013 2014 2013-2014

Total mobilised private finance (excl export credit insurance) 7.67 10.54 18.21

Mobilised private finance by export credit insurance 46 43 89

Total mobilised private finance (incl export credit insurance) 53.67 53.54 107.21

Increase 699% 508% 589%


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5 Recommendations and Lessons Learned 5.1 Recommendations in relation to the methodology

Continue to support the development of an internationally agreed methodology on Monitoring,

Reporting, and Verification (MRV) for mobilised private finance:

As there is no internationally agreed methodology yet, we suggest that the Belgian government

continues to support international efforts to develop such a methodology as this would make Belgian

results much more comparable to other donors and will make it easier to recognise progress towards

the USD 100 billion commitment as is mentioned in the Copenhagen agreement. The recent

declaration of OECD ministers is a good starting point, however many issues are still not clarified

sufficiently and recipient countries are not yet included in the process. The most relevant points of

attention should be:

• Harmonising with current UNFCCC and OECD DAC reporting.

• Clarity on point of measurement.

• Clarity on export credits and guarantees.

• Opening the dialogue with developing countries.

Agree on a common international reporting framework:

In addition to a commonly accepted accounting framework (see above) there is also a need for an

international reporting framework. This can be organised either under the UNFCCC or under the

OECD. Whichever way is chosen it is important to align this new reporting obligation with existing

reporting to maximise transparency and reduce the workload.

Harmonize the different methodologies used by Belgian actors for climate finance accounting:

There are some striking differences in the methodologies used by the different Belgian public

actors, especially in the way climate finance is tracked in the administrative systems (e.g. the use

of the ‘Rio markers’). In order to improve comparability between all Belgian actors we suggest

agreeing on one shared standard for the use of the Rio markers in all Belgian public organisations.

In order to achieve the latter recommendation, some practical and maybe political hurdles need to

be overcome. We suggest organising a workshop gathering the main actors involved to discuss at

the operational level the best way forward, which should then be agreed at the national level.

5.2 Recommendations in relation to the data collection process

Develop clear instructions and template for data gathering on (mobilised private) climate

finance for all Belgian actors:

Not all Belgian public actors active in climate finance currently collect the required data to

implement the methodology we developed in this study. Therefore, we suggest agreeing on a

common set of instructions and a shared template for all relevant actors, in order to facilitate their

efforts in gathering data. Such a process would be helped by clear guidance, methodologies and

processes at the international level on methodologies to assess mobilised private climate finance,

but as we do not foresee this happening in the short term, we suggest undertaking the following

actions:


108

• Register public climate finance according to one agreed (Rio marker) methodology;

• Indicate if the support is: a) policy support/project preparation, or b) direct project finance;

• If the support is about direct project finance (b), indicate if mobilisation of private finance is a

specific objective of the action;

• Register how much and in what form co-finance from private and/or public sources is (or will be)

achieved as part of the project;

• Register the source (type, origin) of both private and public co-finance;

• Register the climate finance amounts on the date of board approval, the date of contract signing

and the dates of disbursements (as they are likely to differ);

• Register any repayments (in case of loans) and claims (in case of guarantees);

• Register all instruments both at face value and as grant equivalent according to the existing

OECD DAC formulation.

We suggest a joint workshop between the main actors114 (see above) to decide on a common

reporting template and on clear instructions for using it. Key elements in such a reporting format

are:

• To make all relevant information available for well-informed policy decision making;

• Harmonisation, so as to make results comparable (both nationally and internationally);

• Use existing reporting systems as much as possible to minimise labour intensity;

• Try to anticipate as much as possible the development of a future internationally agreed MRV

system.

5.3 Recommendations in relation to the results

Make clear choices on how to measure and what to include in Belgian climate finance

reporting:

The final results for Belgium heavily depend on some key choices regarding how to calculate and

what to include in the final outcome. These decisions need to be based on the national context but

we recommend also taking into account international harmonisation. The main and most impactful

decisions that need to be taken are:

• Whether to calculate all instruments at face value or introduce a grant-equivalent for loans and

guarantees;

• Whether to include or exclude export promotion related finance instruments such as export

credit insurance for a Belgian company.

In the research we have tried to estimate the impact of these choices but due to lack of data we

could not calculate it fully. However, changing from face-value to grant-equivalent would decrease

the public finance by roughly 34% while including export promotion instruments would roughly

increase the outcomes by 589% (based on 2013-2014 figures and extrapolation of limited data).

Improve cooperation and coordination on public climate finance and mobilised private climate

finance between all Belgian actors:

114 In our opinion the main actors should include at least: the FPS Environment, DGD, AWAC, Brussels-environment, LNE, BIO and

Finexpo.


109

A large number of public and private actors in Belgium are involved in climate finance. We

recommend improving coordination in climate finance by setting up a ‘Climate Finance Coordination

Unit’. In this unit both the public and private actors (banks, investors, companies) should:

• Keep each other informed of their actions and instruments;

• Discuss changes in, or development of, policy instruments to stimulate private climate finance;

• Improve general knowledge and awareness of the mobilisation of private climate finance;

• Increase the cooperation, synergies and understanding between the public and private actors

and develop joint pilot projects.

Public climate finance should keep part of its focus on policy support and project preparation

even when the resulting mobilisation of private finance is more indirect and more limited:

It is clear that not all instruments have the same direct impact on mobilising private climate

finance. Some instruments (like policy support of project preparation) are intended more to prepare

the ground for climate investments and only have an indirect impact on mobilising private finance.

Instruments that are more directly oriented towards investments in climate projects are often

closer to market conditions (like non-concessional loans and guarantees) and these are likely to

achieve higher ‘leverage rates’ for mobilisation of private climate finance than the more ‘classical’

instruments like project grants or concessional loans.

However, this should NOT be misinterpreted: the indirect mobilisation by instruments like grants

and concessional loans is crucial for the ultimate success of mobilising private climate finance. For

many good climate projects there is simply no good ‘business case’ and subsidies or concessional

loans are the only instruments that are able to support these projects. For projects that can be

financed almost entirely by the private sector, market related instruments like guarantees and non-

concessional loans can bridge the small investment gap, so by nature they will have a higher

leverage. Focussing more on mobilising private climate finance is important, but focussing too much

on the leverage ratio and the mobilisation of private capital could become counter-productive, as

grants for policy support and project preparation are crucial for incentivising climate investments.

The research shows that a major part of the Belgian climate finance flows towards these more

indirect forms of support; this can be very effective, even if the effect is indirect and the sums of

directly mobilised private climate finance are difficult to assess.

The instruments with the highest leverage ratio towards private finance are mainly relevant when

export promotion is involved (loans and guarantees). However, it should not be forgotten that they

need the traditional support from public grants and concessional loans to make the more ‘close to

commercial’ and commercial projects possible. In addition to the type of financial instruments

used, the country and the type of projects Belgium chooses to support have a strong impact on the

overall mobilisation of private finance. As the report shows, investments in policy support projects

or project preparation, as well as projects in LDC countries often mobilise less private finance.

When developing policies to stimulate climate projects and climate finance, the right balance needs

to be struck between the available instruments. Mobilising private climate finance should not be a

goal in itself but a means to more and better climate projects.


110

Better integrate the indirect instruments to support policy and project preparation with

direct project finance support:

Enough evidence cannot be drawn from this pilot study, but ongoing international research indicates

that a smart combination and interaction between subsidies for ‘preparing the ground’ (mainly from

public sources) and more market oriented instruments (from development banks and private

sources) is the most likely to be successful in financing climate projects and involving private

sources of finance. Attracting private climate finance is only possible once the opportunities to

invest have been created. In our opinion, best practice in this approach can be found at AFD, KfW,

and FMO (NB: BIO works closely together with FMO and is a member of the Association of European

Development Finance Institutions together with KfW and FMO). It would be worthwhile investigating

if further cooperation between actors in Belgium could lead to such mutual strengthening. The

rather fragmented field of actors in Belgium makes such cooperation even more important. The

‘Climate Finance Coordination Unit’ mentioned above could play a role in supporting such

cooperation.

Increase focus on mobilising private climate finance:

We believe that projects aiming at scaling up the mobilisation of private climate finance are very

relevant to increasing the volume of climate projects and need more attention. This will not only

increase the overall available capital for climate finance, but will also bring in the knowhow of the

private sector and increase the interest of the private sector in climate related projects.

When working with policy support, capacity building, and project preparation for climate related

projects, the relevance and impact on the mobilisation of private finance should be formulated in

the project description from the beginning. Clear indicators for success in this aspect should also be

included.

Take a deliberate stand on the balance between mitigation and adaptation projects:

In most cases mitigation investments (such as renewable energy projects) have substantially higher

leverage potential for private finance than adaptation projects, the latter often being more about

the public role of protecting against or preventing negative climate impacts and less about creating

a profitable business.

With regard to the Belgian situation, this study demonstrates indicates that BIO only mobilised

private finance for mitigation projects (all non-concessional loans) in 2013-2014. Although Finexpo

has a balanced split between mitigation and adaptation mobilisation in concessional loans. The

assumption is that the balanced split for Finexpo is due to their support for the active and

successful ‘water’ sector in Belgium.

We suggest that the Belgian public actors take this fundamental difference and the desired split of

the budgets between financing mitigation or adaptation projects into account when designing

policies and instruments for public and private climate finance.

LDCs deserve special attention when developing climate finance policies:

It can be seen from the results and from other international studies that private climate finance is

less likely to move to the Least Developed Countries (LDCs) where the overall conditions are less

favourable for a profitable business opportunity. Where the (perceived) risks are highest, the


111

private sector is less present and thus public finance becomes more essential. The research shows

that Belgium is already strongly focussed on LDCs, thereby using the appropriate instruments in

order to improve the general living conditions but also the overall conditions for stimulating private

investments. We suggest that the Belgian government continues to take this approach and takes this

fundamental difference into account when designing policies and instruments for climate finance.

Integrate climate finance and mobilised private climate finance in all relevant policy areas:

Climate policy in general and climate finance in particular is not an isolated area but strongly linked

to other policy areas. The thinking on climate finance and the mobilisation of private climate

finance should be strongly integrated into Belgium’s overall development cooperation policies and

especially in the recently adopted strategy with a strong focus on a limited number of LDCs.

Specific actions to stimulate an increased role for private climate finance should be seen in light of

the overall goals of climate and development policy and not as an individual goal. Alongside climate

and development policy, the discourse on private climate finance could also be integrated into

national economic (export oriented) policy in order to achieve synergies with export promotion

strategies and the future orientation of Belgian industry and trade in the international context.


113

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114

• FPS Foreign Affairs, Foreign Trade and Development Cooperation (2008), ‘Climate change and the

Belgian development cooperation policy: challenges and opportunities’, available at:

http://diplomatie.belgium.be/en/binaries/report_climat_change_tcm312-67482.pdf

• FPS Foreign Affairs, Foreign Trade and Development Cooperation (2014), ‘Strategy note –

Environment in the Belgian Development Cooperation’, available at:

http://diplomatie.belgium.be/en/binaries/Strategy_note_Environment_tcm312-257333.pdf

• Government of Belgium, ‘MMR Report 2013-2014, Report on financial and technology support

provided to developing countries under the Monitoring Mechanism Regulation (MMR)’,

Communication with European Commission.

• International Climate Fund, ‘ICF KPI 12: Volume of private finance mobilised for climate change

purposes as a result of ICF funding’, internal document.

• Jachnik, R., R. Caruso and A. Srivastava (2015), ‘Estimating Mobilised Private Climate Finance:

Methodological Approaches, Options and Trade-offs’, OECD Environment Working Papers, No. 83,

OECD Publishing, Paris.

• U.S. Department of State (2015), ‘Joint Statement on Tracking Progress Towards the $100 billion

Goal Paris, France, 6 September 2015’, available at:

http://www.state.gov/documents/organization/246878.pdf

• OECD (2015), ‘Arrangement on Officially Supported Export Credits’, available at:

http://www.oecd.org/officialdocuments/publicdisplaydocumentpdf/?doclanguage=en&cote=tad/pg%282015%297

• OECD (2013), ‘Converged Statistical Reporting Directives for the Creditor Reporting System and the

Annual DAC Questionnaire’, available at: http://www.oecd.org/dac/stats/documentupload/DCD-

DAC(2013)15-FINAL-ENG.pdf

• OECD (2015), ‘Estimating mobilised private climate finance: methodological approaches, options

and trade-offs’, available at: http://dx.doi.org/10.1787/5js4x001rqf8-en

• OECD (2011), ‘Handbook on the OECD-DAC Climate Markers’ available at:

http://www.oecd.org/dac/stats/48785310.pdf

• OECD-CPI (2015), ‘Climate finance in 2013-14 and the USD 100 billion goal’, available at:

http://www.oecd.org/environment/cc/OECD-CPI-Climate-Finance-Report.pdf

• OECD DAC (2015), ‘Inclusion of the Effort in Using Private-Sector Instruments in ODA: Incentives

Embedded in the Institutional and Instrument-Specific Approaches’, DAC Meeting 18 June 2015,

available at:

http://www.oecd.org/officialdocuments/publicdisplaydocumentpdf/?cote=DCD/DAC(2015)15&docLanguage=En

• OECD DAC (2015), ‘Working Party on Development Finance Statistics (WP-STAT), Methodologies to

Measure Amounts Mobilised from the Private Sector by Official Development Finance Interventions’,

OECD Conference Centre, Paris.


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• Schiellerup, P. and K. Geeraerts (2012), ‘Exploring Belgium’s Contribution to International Climate

Finance after 2012’, Institute for European Policy (IEEP), London, available at:

http://www.klimaat.be/files/1213/8253/2210/IEEP_Exploring_Belgium_s_Contribution_to_International_Climat

e_Finance_After_2012.pdf

• Trinomics (2015), ‘Pilot Study of Private Finance Mobilised by Denmark for Climate Action in

Developing Countries’, available at:

http://www.oecd.org/env/researchcollaborative/DK%20final%20private%20finance%20mobilisd.pdf

• Trinomics (2014), ‘Pilot Tracking Mobilised Private Climate Finance by the Netherlands’, available

at: http://trinomics.eu/wp-content/uploads/2015/06/Pilot-Tracking-Mobilised-Private-Climate-Finance.pdf

• Trinomics (formerly Triple E Consulting) (2014), ‘Pilot: Tracking Mobilised Private Climate Finance’,

available at: http://trinomics.eu/wp-content/uploads/2015/06/Pilot-Tracking-Mobilised-Private-Climate-

Finance.pdf

• United Nations (2010), ‘Report of the Secretary-General’s High-Level Advisory Group on climate

change financing’, available at:

http://www.un.org/wcm/webdav/site/climatechange/shared/Documents/AGF_reports/AGF%20Report.pdf

• Vlaamse Regering (2014),‘Beleidsnota 2014-2019, Buitenlands Beleid, Internationaal Ondernemen en

Ontwikkelingssamenwerking’, Brussels, available in Dutch at:

http://www.vlaanderen.be/int/sites/iv.devlh.vlaanderen.be.int/files/documenten/Beleidsnota_2014_2019_Buit

enlands_Beleid_Internationaal_Ondernemen_Ontwikkelingssamenwerking-1.pdf

• Wallonie-Bruxelles International (2014), ‘Rapport d’activités 2014’, Brussels, available at:

http://www.wbi.be/sites/default/files/attachments/publication/ra_2014_wbi.pdf

• Wallonia Foreign Trade and Investment Agency (2014), ‘AWEX, a partner for Wallonia’s international

economic development’, Brussels, available at: http://www.awex.be/fr-

BE/Publications/Brochures/Documents/AWEX_QUADRITYPIQUES%20DOM%20_EN_2014-DEF.PDF

• Wallonia Foreign Trade and Investment Agency (2015), ‘Guide des actions à l’étranger pour les

exportateurs wallons, Brussels, available at: http://www.awex.be/fr-

BE/Publications/Brochures/Documents/Programme%20d'actions%202015.pdf

• World Bank (2015), ‘Joint Report On Multilateral Development Banks’ Climate Finance’, available

at: www.worldbank.org/climate/MDBclimatefinance2014


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Annex A – The DAC Rio marker methodology The Rio markers methodology follows the general principles of the DAC policy marker system115. The

(aid activity) data comes from aid donors (DAC members, the EC, multilateral organisations). Non-DAC

members can also report to DAC.

Following the ‘Reporting on the Policy Objectives of Aid’116, a marking system can have on of the

following three values which are assigned after examining project documentation:

• Principal objective;

• Significant objective;

• Not targeted to the policy objective.

Principal (primary) policy objectives are those that can be identified as being fundamental in the

design and impact of the activity and which are an explicit objective of the activity. They may be

selected by answering the question “would the activity have been undertaken without this objective?”.

Significant (secondary) policy objectives are those that, although important, are not one of the

principal reasons for undertaking the activity. The score not targeted means that the activity has been

screened against, but was found not be targeted to, the policy objective.

To qualify for a score principal or significant, the objective has to be explicitly promoted in project

documentation. Avoiding negative impact is not a sufficient criterion. Finally, an activity can have

more than one principal or significant policy objective.

More specifically, a project can be classified as climate-related by using the Rio markers “climate

change – mitigation” and “climate change – adaptation”. The eligibility criteria for a project to be

classified as a mitigation project are related to the fact that the project should contribute to:

• The mitigation of climate change by limiting anthropogenic emissions of GHGs, including gases

regulated by the Montreal Protocol; OR

• The protection and/or enhancement of GHG sinks and reservoirs; OR

• The integration of climate change concerns with the recipient countries’ development objectives

through institution building, capacity development, strengthening the regulatory and policy

framework, or research; OR

• Developing countries efforts to meet their obligations under the Convention.

The activity will score principal objective if it directly and explicitly aims to achieve one or more of

the above four criteria.

An adaptation project intends to reduce the vulnerability of human or natural systems to the impacts

of climate change and climate-related risks, by maintaining or increasing adaptive capacity and

resilience. The criteria for eligibility include:

• The climate change adaptation objective is explicitly indicated in the activity documentation; AND

• The activity contains specific measures targeting the definition above.

115 OECD (2013), ‘Converged Statistical Reporting Directives for the Creditor Reporting System and the Annual DAC Questionnaire’, available at: http://www.oecd.org/dac/stats/documentupload/DCD-DAC(2013)15-FINAL-ENG.pdf 116 Reporting Directives for the Creditor Reporting System, DCD/DAC(2007)39/FINAL


119

Annex B – Rio marker methodology DGD DGD has developed a specific methodology on calculating as exact as possible public spending based on

the Rio Markers. This methodology is also dividing the public spending over the three Rio goals in order

to avoid ‘double counting’. In this methodology the rough indication of ‘significant’ is fine-tuned by

applying varying weighting factors per subsector (usually between 0-40%) based on its CRS code. There

are a few exceptions in energy-related sectors which have weighting factors for mitigation of 50, 80 or

100. The Rio markers are applied per project. The weighting factors are applied per sector.

Figure 20 –Rio marker methodology as applied by DGD


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Annex C – Rio marker methodology Flanders Flanders is using a less detailed approach but one that is also used by the European Commission, the

Netherlands and some other countries. In this methodology, 100% is calculated when a Rio objective is

called the ‘principal’ objective of a project, 40% when it is ‘significant’ and 0% when a Rio objective is

not mentioned.

Figure 21 –Rio marker methodology as applied by Flanders


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Annex D - Case Study 1: Support to the Vietnam National Green Growth Strategy Context

Over the last two decades, Vietnam achieved a sustained economic

growth of about 6% per year, with the Vietnamese GDP reaching around

USD 1,900 per capita. However, this growth relied on the exploitation

of non-renewable natural resources and on the development of an

energy intensive industry. This resulted in poor air quality and high

pollution in main urban areas. Therefore, this rapid growth brought social improvements, but also

raised new environmental, economic and social challenges:

• Under a ‘Business-As-Usual’ scenario, Vietnamese greenhouse gas (GHG) emissions are expected to

double by 2020 and more than triple by 2030, reaching a per capita emission level comparable to

Western countries in 2012;

• Vietnam is also expected to soon become a net importer of primary energy, mainly due to an

increasing share of coal-fired electricity production;

• Furthermore, due to its unique situation, Vietnam is one of the countries that is most vulnerable to

climate change impacts.

Vietnam adopted the ambitious Vietnam National Green Growth Strategy (VNGGS) in 2012 with as

main objective to reduce its energy consumption and GHG emissions, and to boost ‘green’ economy

sectors. The VNGGS has been inspired by green growth principles but also encompasses a cultural

dimension. Implementation priorities focus on integrating green growth within the planning process and

strengthening the legal and institutional framework. Investment guidelines for green projects and a

funding entity to facilitate access to international climate finance are under development.

Financing the Vietnam National Green Growth Strategy (VNGGS)

Implementing the VNGGS requires significant investments. According to estimates of the Vietnamese

government, about USD 30 billion would be needed. However, as the economy in Vietnam is developing,

and continues to develop rapidly, ODA flowing to the country shrinks while state budget faces

difficulties in affording such investments. While public finance will undoubtedly be an important

catalyser to fund specific (large-scale) climate projects, it is very clear that the private sector will be

a key funding source for implementing the VNGGS and to act as a catalyser in the transition to a green

economy. To create the right conditions for an enabling environment to mobilise foreign and domestic

private sector investors towards green growth activities is thus an essential step. This requires at least

unlocking of existing barriers that prevent contribution from the private sector and guaranteeing an

ambitious and coherent regulatory framework.

Belgium is supporting the development of this enabling environment in Vietnam, by facilitating the

work of the national authorities in developing a country-owned fund (i.e. Vietnamese Climate

Fund) that aims to attract and coordinate international, national, public and private sector finance to

promote green investments. Moreover, the Belgian support aims to take away some of the (high)


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upfront capital costs for clean energy investments and provides technical assistance and capacity

building activities for clean energy project development via the Green Growth Strategy Facility (GGSF).

Figure D-1: Overview of key barriers to clean energy development in Vietnam

The Green Growth Strategy Facility (GGSF) project

Belgium has been one of the first countries to support the implementation of the VNGGS by

providing 'seed' money to develop a practical, efficient and transparent facility to attract and

coordinate local and international funding for green growth initiatives. The “Green Growth Strategy

Facility” (GGSF) project aims at enabling the financing of “green” initiatives that effectively contribute

to the VGGS. Therefore, the GGSF project supports the Vietnamese Ministry of Planning and Investment

(MPI) to establish a new facility/fund that will channel different types of climate-relevant funding (e.g.

ODA, Green Climate Fund, Adaptation Fund, etc.) and allocate it to green initiatives selected by

transparent and reliable criteria and processes.

MPI has been accredited as the official Vietnamese National Designated Authority (NDA) of the Green

Climate Fund, and therefore it is expected that the GGSF will play a central role in catalysing

climate finance to Vietnam as one of the potential accredited National Implementing Entities (NIEs)

under the Green Climate Fund. Target initiatives will focus on barriers preventing environmentally

sustainable investments and for the creation of the right enabling environment. Such initiatives could

include among others pilot investments, capacity building activities or co-financing to reduce (high)

upfront capital/investment costs. The concrete activities towards setting up the GGSF include (until

date): elaborating the operational and governance framework of the facility, conducting pilot green

initiatives in three provinces, reinforcing the Ministry’s capacity in terms of climate finance and

disseminating the results.


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Evaluating mobilised private climate finance by Belgium

The intervention for the instalment of the GGSF has taken place only around summer 2013, with the

first six months being dedicated to the overall GGSF set-up. Mobilising private finance for climate

change actions is not an easy task, neither is setting up a national climate finance facility. This requires

coherence with other ongoing policies and ODA developments as well as interdisciplinary solutions (e.g.

whether the national climate finance facility will be accredited as a NIE to the Vietnamese NDA in order

to access the Green Climate Fund). So far, the GGSF mainly provided capacity building activities for

the green growth transition to the MPI and other ministries that participate in the Green Growth

Coordination Committee, and as such it is not possible (to date) to quantify the amount of private

finance actually unlocked thanks to the support provided by Belgium. However, the provided (and to

be delivered in the 60 months’ implementation period) preparatory work and capacity building

activities under the GGSF are of crucial importance to unlock private finance for climate-friendly

investments over time. Therefore, the current Belgian support of EUR 5 million is a key enabler for

scaling up climate finance in Vietnam.

Facts & Figures

Budget Belgian Contribution: EUR 5,000,000

Vietnam contribution: EUR 500,000

Duration 6 years (started in 2013)

Office Location Hanoi, Vietnam

Partner Ministry of Planning and Investment, Department of Science, Education, Natural Resources and

Environment (DSENRE/MPI)

Pilot Projects

location

Provinces of Ha Tinh, Binh Thuan, and Ninh Thuan

Contact Phung Van Quan – [email protected] – Project coordinator

Jerome Meessen – [email protected] International Technical Advisor


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Annex E - Case Study 2: Rajasthan Sun Technique Energy Context

Rajasthan Sun Technique Energy Private Ltd is constructing a 100MW

Concentrated Solar Power (CSP) plant in the State of Rajasthan in

India. The project location is ideal for solar power due to its extended

periods of cloudless days and high level of direct sun radiation. Despite

the potential of CSP in India, it is still a relatively new technology, and

its investment and production costs are still high compared to other

more established and conventional renewable energy technologies.

This project has been awarded under Phase I (650MW) of the National

Solar Mission, an initiative of the Government of India and State Governments to promote ecologically

sustainable growth while addressing India’s energy security challenges.

The project is constructed by

Reliance Infrastructure with Areva

Solar as its solar technology partner.

The project uses the Compact Linear

Fresnel Reflector technology

(“CLFR”) developed by Areva. CLFR

is a relatively advanced solar

thermal technology in which rows of

parallel mirrors reflect solar

radiation onto a linear receiver.

Water is pumped through the linear receiver and heated to steam, which drives the steam turbine and

generator. The Steam Turbine and Generator are provided by Siemens. Reliance Power Limited, a part

of Reliance Group, is India's leading private sector power generation company and is the owner of this

CSP plant. The company has the largest portfolio of power projects in the private sector based on coal,

gas, hydro and renewable energy, with an operating portfolio of 1200 MW.

Since March 2015, generation of the electricity started with all 35 solar steam generators in operation.

However, improvement works were needed and carried out in parallel. Generation values have fallen

short of the projected generation because of this, and led to the steam turbine only generating the

energy that was needed for its own energy consumption. The net export is expected to increase as the

plant performance increases to full capacity towards the end of 2015.

Financing structure

Reliance Power secured USD 310 million in debt financing (both senior and subordinated debt) and

secured an amount of USD 22 million in equity via Rajasthan Sun Technique Energy Private Ltd, a

special purpose vehicle (SPV) with Reliance Power as project sponsor. Most of the debt financing is

provided by the Asian Development Bank (ADB) and Development Finance Institutions (DFIs) FMO and

BIO. With its participation, BIO supports the efforts of the Government of India to promote clean


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energy, to combat climate change and to increase the share of renewable energy in power generation,

which is currently dominated by polluting coal fired power stations.

Key stakeholders and their involvement in funding this project are:

The Government of India provided a policy framework, supported a Power Purchase Agreement and

a payment security scheme:

• The policy framework developed by India provided a clear signal that the development of

renewable energy would be supported by the national authorities, as an enabling environment

(with the right signals) is a necessity for private finance mobilisation to take place;

• The Power Purchase Agreement (PPA) was financially supported by the Government of India

and was awarded through a reverse auctioning scheme: it helped decrease the revenue risks;

• The payment security scheme insures the developers against the default of the distribution

companies that will buy the CSP plant’s electricity from the PPA off-taker.

The ADB, FMO, BIO and the Export-Import Bank of the United States (US Ex-Im Bank) provided

international debt capital to this project, with Axis Bank (India) providing local senior debt:

• Debt was provided with longer maturities (up to 18 years) than commercial banks would offer

(7-10 years) and thus decreased the financial risks while increasing the Internal Rate of Return;

• The total international debt provided is USD 288 million.

A SPV called Rajasthan Sun Technique Energy Private Ltd, with Reliance Power Ltd (India) as

project sponsor, provided private equity and is therewith 100% owner of the project’s SPV.

The US-based provider of Linear Fresnel CSP Technology, Areva Solar, provided the solar

technology. As such, the technology risks are covered via comprehensive technology warrantees.

BIO is investing together with FMO. They have established a Risk Sharing Agreement in 2010, to start co-

operating and jointly finance infrastructure transactions. FMO also has a Risk Sharing Agreement with

the ADB. BIO’s funds will be used for a part of the project cost. The project site provides access to road

network, to water for the steam cycle and cooling, and to a transmission line for power evacuation.

A summary of the financial structure of this project is provided in Table E-1 below.


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Table E-1: Overview of financial structure 117 118

Stakeholder Type of entity Financial instrument Amount

ADB Development bank Senior debt USD 103 million

FMO Development bank Senior debt

Subordinated debt

USD 70 million

USD 15 million

BIO Development bank Senior debt USD 20 million

US Ex-Im Bank Export credit agency Senior debt USD 80 million

Axis Bank (India) Commercial bank

(minority owned by the

government)

Senior debt USD 22 million

(INR 1140 million)

Total debt funding USD 310 million

Rajasthan Sun Technique

Energy Private Ltd (India)119

Special Purpose Vehicle Equity USD 104 million

(INR 5500 million)

Total equity funding USD 104 million

TOTAL FUNDING (debt + equity) USD 414 million

..of which is public funding USD 288 million

…of which is private (commercial) funding USD 126 million


Although the size of the funding contributions is quite different, each one of them has contributed to

the actual development and implementation of this project and hence all have played a role in

mobilising the necessary funding for this project. When the climate finance attribution methodology of

the Multilateral Development Banks (MDBs) would be followed, a ‘lead arranger’ should be nominated.

Following the four-stage methodological framework developed under the OECD-led Research

Collaborative on Tracking Private Climate Finance, each of the public actors would be attributed its

‘fair share’ in the mobilisation of private climate finance. The participation of Belgium (via BIO) in

the total public funding is 7% (= USD 20 million of the total public funding of USD 288 million).

Therefore, according to the methodological framework developed for this pilot study, we would be

able to attribute USD 8.82 million to Belgium (= 7% of the total private (commercial) funding of USD

126 million).

More information • http://www.bio-invest.be/portfolio/multiregional/details/140.html • http://climatepolicyinitiative.org/wp-content/uploads/2014/03/SGG-Case-Study-The-Role-of-

Public-Finance-in-CSP-Rajasthan-Sun-Technique-India.pdf • http://www.cleanenergyactionproject.com/CleanEnergyActionProject/Solar_CSP___Concentrating_

Solar_Power_Case_Studies_files/Rajasthan%20Concentrating%20Solar%20Power%20Project.pdf • http://www.adb.org/sites/default/files/project-document/59964/46900-01-ind-rrp.pdf

117 CPI 2014, The Role of Public Finance in CSP Case Study: Rajasthan Sun Technique, India. Available at: http://climatepolicyinitiative.org/wp-content/uploads/2014/03/SGG-Case-Study-The-Role-of-Public-Finance-in-CSP-Rajasthan-Sun-Technique-India.pdf 118 FMO 2012, Press release: Reliance Power secures USD 302 million financing for concentrated solar project. Available at: https://www.fmo.nl/k/news/view/1894/538/reliance-power-secures-usd-302-million-financing-for-concentrated-solar-project.html 119 Note that Reliance Power Ltd is the project sponsor, with Rajasthan Sun Technique Energy Private Ltd being the project’s SPV


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Annex F - Case Study 3: Support to the Sustainable Caribbean Basin Private Equity Fund Context

Belgium provides about 45% (EUR 91.52 million in 2013-2014) of their climate

finance funding via multilateral channels, like the Global Environment Facility

(GEF), the Adaptation Fund (AF) as well as the Multilateral Development Banks

(MDBs) like the World Bank, the African Development Bank and the European

Investment Bank. Via these multilateral climate finance channels, also private

finance for climate mitigation and climate adaptation projects is mobilised, either via direct project

finance as well as via grant contributions. An example of the latter is the support that Belgium has

provided to the GEF for many years. This case study will demonstrate how Belgium has contributed to

one of Public-Private-Partnerships (PPPs) that the GEF-5 has funded between 2010-2014.

The GEF has engaged with the private sector since its establishment after the Rio Earth Summit in 1992.

GEF’s vision behind their engagement with the private sector is that commercially viable activities of

private enterprises have a long-term and substantive impact on the global environment and can deliver

global environmental benefits. During the GEF-5 negotiations (for the implementation period 2010-

2014), the importance of scaled-up engagement with the private sector was emphasized, and

international donors agreed to have a dedicated Private Sector Set-aside of up to USD 80 million. This

GEF-5 Private Sector Set-aside was approved at the 41st GEF Council meeting in November 2011, after

negotiations on the specific modalities for utilising the Private Sector Set-aside as a mobilisation

instrument120. The GEF-5 private sector instrument emphasises the establishment of Public-Private

Partnerships (PPPs), that should work in close collaboration with the private sector windows of the

Multilateral Development Banks (MDBs) and focus on the expanded use of non-grant instruments

(e.g. equity funding)121. Moreover, the GEF-5 Private Sector Set-aside takes a regional focus that is

cross-cutting across several GEF focal areas and includes components to support technology transfer

and innovation among small and medium enterprises (SMEs).

The following five PPP programs have been approved by the GEF Council as innovative PPPs, and

received a total funding commitment under the GEF-5 Private Sector Set-aside strand of USD 70 million:

IDB MIF Public-Private Partnership (PPP) Program - this program targets equity investments in

funds to promote among others energy efficiency, renewable energy, and biodiversity in Latin

America (grant funding received: USD 15 million);

AfDB Public-Private Partnership (PPP) Program - this program promotes scaling up of renewable

energy technologies on the African continent and contributes to the delivery of universal power

supply in the region (grant funding received: USD 20 million);

120 GEF (2012), “Operational Modalities for Public-Private Partnership (PPP) Programs”, GEF Council Meeting, 5-7 June 2012, Washington DC, available at: https://www.thegef.org/gef/sites/thegef.org/files/documents/C.42_Inf.08_Operational_Modalities_%20for_Public_Private_Partnership_Programs.pdf 121 GEF 2015, “Mobilizing Climate Finance from the Private Sector – Summary of GEF Experience”, GEF Council Meeting, 20-22 2015, Washington DC, available at: https://www.thegef.org/gef/sites/thegef.org/files/documents/EN_GEF.C.49.Inf_.13_Mobilizing_Climate_Finance_from_the_Private_Sector.pdf


132

EBRD South-Eastern Mediterranean EE/ESCO Markets Platform - this PPP with EBRD established an

innovative financing facility to serve four GEF countries (i.e. Egypt, Jordan, Morocco, and Tunisia)

to catalyze the creation of an Energy Services Company (ESCO) market and explore innovative

financing schemes for combined heat and power and renewable energy (grant funding received: USD

15 million);

IDB Sustainable Caribbean Basin Private Equity Fund (SCBPEF) - the overall goal of the SCBPEF is

to catalyze private sector investments into energy efficiency, renewable energy and other

sustainable business models in the wider Caribbean Basin (grant funding received: USD 15 million);

IDB Climate-Smart Agriculture Fund for the Americas - the overall goal of this fund to catalyze

greater private sector investments in sustainable agriculture, forestry and rangeland systems in

order to maintain and improve the flow of agro-ecosystem services from productive landscapes in

the face of climate change and increasing resource scarcity (grant funding received: USD 5 million).

The PPP-IDB Sustainable Caribbean Basin Private Equity Fund (SCBPEF)

The overall goal of the PPP-Sustainable Caribbean Basin Private Equity Fund of the Inter-American

Development Bank (IDB) is to foster private investments that promote energy security, environmental

sustainability and related economic opportunities in nations across the Caribbean Basin. The PPP-IDB

SCBPEF seeks to invest in highly innovative investment platforms and business models that expand

access to clean and safe energy, that achieve the sustainable use of natural capital, and that generate

opportunities for local businesses and low income populations. The Fund catalyses investments in SMEs

that are engaged in clean and renewable energy, energy efficiency, cleaner production and life-

cycle activities, and in services and products related to vital sustainable industries in the region. As

such, the Fund’s resources are additional, leveraged, and invested with the expectation that private

investors grow and achieve profitable returns, while generating social and environmental impact. The

Fund’s design and due diligence have been carried out by the IDB’s Multilateral Investment Fund (MIF).

The MIF has requested USD 15 million of grant funding from the GEF-5 Private Sector Set-aside to

facilitate the first closing of the Fund by adding needed financial resources, and the globally-

recognized GEF brand to several potentially interested private sector investors in 2013. After

having mobilised a ‘core group’ of investors for the PPP-IDB SCBPEF, the MIF itself invested USD 5

million of equity funding, and together with other committed public sector (among others the European

Investment Bank (EIB)) and private market players, such as Manifest Energy, NRG and other private

investors, capitalised the Fund. The Fund was targeted for a capitalisation of USD 50 million, shared

between public and private sector contributions, and invests in ten low-carbon projects with an

expected internal rate of return to investors of (at least) 12% between 2010-2014. It is anticipated that

the capitalisation of the Fund by other public and private investors matches the GEF contributions on at

least a 1:1 ratio. Moreover, it is anticipated that the Fund will achieve a leverage factor between

1:4 to 1:7, depending on the financial structuring of the specific project transactions. Therefore,

the USD 15 million grant funding via the GEF-5 Private Sector Set-aside should (potentially)

leverage USD 200 million of deployed capital amongst the Caribbean Island States and coastal

regions122.

A summary of the financial structure of the PPP-IDB SCBPEF is provided in Table F-1 below.

122 GEF (2013), “Program Framework Document (PFD) for the Sustainable Caribbean Basin Private Equity Fund”, available at: https://www.thegef.org/gef/project_detail?projID=5388


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Table F-1: Overview of financing structure of the PPP-IDB SCBPEF

Stakeholder Type of entity Financial instrument Amount

Inter-American Development

Bank (IDB) - GEF Trust Fund

GEF-5 Private Sector Set-

aside

Grant USD 15 million

Total grant funding USD 15 million

Manifest Energy, NRG and

other private investors

Private sector Equity USD 15 million

Inter-American Development

Bank (IDB)

Multilateral Investment

Fund (MIF), public sector

Equity USD 5 million

Other Multilateral agencies

(including EIB)

Public sector Equity USD 15 million

Total equity funding USD 35 million

TOTAL FUND CAPITALISATION USD 50 million

Project investment partners

and lenders

Private sector Cash, equity, debt USD 165 million

TOTAL PRIVATE SECTOR COFINANCE USD 200 million


This case study demonstrates the importance of grant funding (i.e. GEF-5 Private Sector Set-aside) in

the development of (in this occasion) an equity fund that attracts and catalyses (further) private sector

investments in low-carbon development projects. When the climate finance attribution methodology of

the Multilateral Development Banks (MDBs) would be followed, a ‘lead arranger’ should be nominated.

Following the four-stage methodological framework developed under the OECD-led Research

Collaborative on Tracking Private Climate Finance, each of the public actors would be attributed its

‘fair share’ in the mobilisation of private climate finance. The contribution of Belgium to GEF-5 in

2013-2014 has been EUR 71.8 million, of which EUR 60.56 million can be ear-marked as climate-

relevant. The total climate finance spending by GEF-5 in 2013-2014 has been EUR 1,074.49 million,

which means that Belgium’s share in GEF-5 spending in 2013-2014 is 5,64% (= EUR 60.56 million

divided by EUR 1,074.49 million).

The GEF-5 Private Sector Set-aside grant of USD 15 million has resulted in the mobilisation of USD 35

million of equity funding to capitalise the Fund, which in a second-tier mobilised another USD 165

million of private sector co-funding (at project level). Therefore, the USD 15 million grant mobilised

USD 200 million, of which USD 5 million public co-funding and USD 195 million private co-funding. The

share of Belgium’s contribution in the GEF-5 Private Sector Set-aside grant is USD 846.000 (= 5,64% of

USD 15 million), which means that Belgium’s share in the total public funding of this Fund is 4,23% (=

USD 846.000 divided by USD 20 million). According to the methodological framework developed for

this pilot study, we would be able to attribute USD 8.25 million of mobilised private finance to

Belgium (= 4,23% of the total private equity and co-funding of USD 195 million).


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Annex G - Case Study 4: Ngong Hills Wind Farm Kenya Context

Although already two wind turbines were commissioned as a donation by the Belgian Government, the

‘Ngong Hills Wind Farm’ really started to take off in 2007, in the northern part of the Ngong Hills near

Nairobi. This specific part of the Ngong Hills was chosen as the project site after 14 years of

observations in terms of wind speed and a favorable wind regime. A technical feasibility study

conducted by the Kenya Electricity Generating Company (KenGen) confirmed that the Ngong site was

capable for generating up to 14.9 GWh of energy on average per annum from a 5.1 MW wind farm.

Therefore, in October 2007, TPF-Ecoloner (Belgium) signed a contract with KenGen for Ngong I Phase I,

comprising the design, supply, installation and

commissioning of a grid-connected wind farm system

consisting of six V52-850kW wind turbines of Vestas

with a capacity of 5.1 MW. TPF-Utilities operated as

the main general contractor for Phase I, being

responsible for the logistics and the technical works

until the operationalisation of these six wind turbines

in August 2009.

Given the favorable wind conditions on Ngong Hills, KenGen decided to expand the capacity of the

Ngong Hills Wind Farm from 5.1 MW to 25.5 MW via two additional expansion phases. In August 2012,

TPF-Econoler signed a second contract with KenGen for Ngong I Phase II for the design, supply,

installation and commissioning of an additional eight V52-850kW Vestas wind turbines with a

capacity of 6.8 MW, levelling up Ngong Hills Wind Farm to 11.9 MW per February 2013. A second

expansion of the Ngong Hills Wind Park is currently being discussed, comprising the establishment of

five V90-2MW Vestas wind turbines with a capacity of 10 MW.

Relevant stakeholders and financing structure for Ngong I Phase II

The Ngong I Phase II expansion of the Ngong Hills Wind Farm EUR 12 million in debt financing in a

mixed credit of state-to-state loans and commercial credit. The state-to-state loan (worth EUR

6,078,000 or 50.65% of the total debt financing) has been provided by Finexpo to the Kenyan

government, with the commercial credit (worth EUR 5,092,000 or 49.35% of the total debt financing)

being provided by other commercial (international) debt finance providers (names are unknown).

KenGen develops and manages all public power generation facilities (large and small hydro,

geothermal, diesel-grid connected or off-grid) in Kenya on behalf of the national government.

The key stakeholders involved this project are:

KenGen (Kenya), being the owner of the Ngong Hills Wind Farm and the largest public utility in

Kenya. KenGen is the contracting authority for commissioning the development of Ngong I Phase II,

and as such serves as a special purpose vehicle for the Kenyan Government to support and facilitate

the vision of Kenya to generate 5,000 MW of power from renewable energy sources by 2018.


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TPF-Econoler (Belgium), is a Belgian project engineer and investor that prepared the design,

supply, installation of the grid-connected wind turbines for the Ngong Phase II extension. TPF-

Econoler is part of the TPF Group (since 1988) which is a provider of reliable engineering solutions

and is internationally recognized for its expertise and high levels of efficiency.

Finexpo (Belgium), on behalf of the Belgian government has provided the requested state-to-state

loan to KenGen, operating as special purpose vehicle for the Ngong I Phase II project.

Commercial investor (international), who provided the remaining debt financing for the Ngong I

Phase II project.


Following the four-stage methodological framework of this pilot study, each of the public actors would

be attributed its ‘fair share’ in the mobilisation of private climate finance. The participation of

Belgium (via Finexpo) in the total public funding is 100% (= EUR 6,078,000). Therefore, according to

the methodological framework developed for this pilot study, we would be able to attribute EUR

5,092,000 of mobilised private climate finance to Belgium.


Trinomics B.V.

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3014 GS Rotterdam

The Netherlands

T +31 (0) 10 3414 592

www.trinomics.eu

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