Scaling up Climate Finance - United Nations ESCAP 5 - IFC - Climate... · Case study Anchor...
Transcript of Scaling up Climate Finance - United Nations ESCAP 5 - IFC - Climate... · Case study Anchor...
Most Climate Vulnerable region
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3 out of the top 10 vulnerable countries are in South Asia (India,
Bangladesh & Nepal)
Source: Maplecroft
South Asian Countries have set significant Climate Change targets by 2030 in COP21
5 Nepal INDC was submitted later
India- 33-35% reduction in emissions intensity. 175 GW Renewable Energy (RE) by 2022
Bangladesh- An unconditional 5% reduction in GHG emissions. $40 billion adaptation needs
Sri Lanka- An unconditional 7% emissions cut
Bhutan- pledge to remain carbon neutral
Maldives- An unconditional 10% reduction in energy sector emissions
Nepal : 4,OOOMW hydro power by 2020, also focus on climate resilience
$200 billion RE Financing
$30 billion Energy & Water Efficiency
Financing
REQUIREMENTS NEXT 5 YEARS
$75 billion Adaptation Financing
Mitigation (95% India)
Adaptation (Mainly Bangladesh,
India & Nepal)
What have we done so far in South Asia (FY11- 15) ?
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1.76 m Tons* Cumulative -GHG Reduction/Year
Equivalent to taking 350,000 cars off the Road
$1.3 billion (Climate Investments-Approx.
2.5% of South Asia’s total Clean energy Investments & 25% of IFC
South Asia total business )
$0.4 billion Mobilization Volume
Renewables, Green Building, Credit lines have contributed maximum to
our Climate Volumes
Adaptation related AS
program in Bangladesh, Nepal & Sri Lanka benefited more
than 100,000 farmers
24% Of our Advisory Business is Climate
PPP has demonstrated first
of it’s kind energy efficient Street lighting & Rooftop
Solar project benefiting 1.65 m people
Off Grid- Lighting India
program has enabled access for >8 m people
*: FY13-15
Climate Volume Performance
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Sector contribution to Volumes Climate LTF performance by Volume
Renewables, Green Building, Credit lines have contributed max. to our Climate Volumes
IFC South Asia Climate Business Growth Strategy(FY16-20)
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3 Pillars- Investment, Advocacy & specialist/Advisory support
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in U
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Eco/Smart Cities
Adaptation
Green Buildings
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RE
*In the next five years, relative to last five years, i.e. FY11-15
Green Buildings & RE will continue to be major
contributors
Region will focus on EE, eco Cities & adaptation
$1.3 Billion o/a
$0.4 B mobilization
$2.2 Billion o/a
$1.2 B mobilization
2X Climate Investments including mobilization
Example: High Impact Intervention (Renewables)
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Market Transformation of the Renewables Sector – 15% target penetration of RE market by IFC clients IFC’s RE commitments during last 5 years : “ $ 1 billion” ( o/a & Mob)
• 300 million still lack access to power; Government of India (GoI) targeting universal access to electricity by 2019 under its ‘24x7 Power for All’ program;
• GoI plans to scale up RE to 175 GW by 2022; GoI’s commitment to RE is a cornerstone of its pledge under COP 21. • Renewables is the fastest growing energy sector in the country; Huge capex needs require diversification of funding
sources
Comprehensive Facilitation-Investment Offer
At 15% penetration of the market in RE, estimated GHG savings could result in: • Emissions reductions of 25 million tCO2 per year equivalent of taking 5 million cars of the road • Energy generation of 26 million MWh per year
WHY?
HOW?
IMPACT
• WBG intervention at various levels • Bringing new investors through mobilization • PPP Advisory Program • Policy advocacy -Stakeholder consultations • Connecting developers and investors • Use of flexible concessional funds
FACILITATION • Direct funding to developers and indirect
funding through financing of financial institutions
• Green Bonds issuances and Credit enhancement products
• Opportunistic equity investments in RE developers
• Treasury products
INVESTMENT
Case study Anchor Investment: Yes Bank Green Bond
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Issuer Yes Bank Limited
Status Green Bond, Senior
Unsecured
Pricing Date 3 August 2015
Settlement
Date
5 August 2015
Size INR 3.15b (approx. US$
49.2m)
Maturity 5 August 2020
Tenor 10 years
Listing Bombay Stock Exchange
Governing
Law:
Indian Law
IFC’s Investment
• Fully Subscribed by IFC
• Pre-committed private placement
• IFC’s first Green Bond investment, and IFC’s
first green corporate bond investment in
Indian Rupee
Achievement
• Setting the market standard for Green
Bonds in India and EM Markets
• Stimulating the domestic capital markets
and opening the door for climate change
investments
ABOUT YES BANK FINANCIAL SERVICES
•India’s fourth largest private sector Bank
•Green Bond program to support Renewable energy infrastructure investments
•Diversify funding sources and tap into nascent Green Bond capital markets
•Green bond of INR 3.15bn (approx. US$ 49.2m) issued in Aug 2015 was the second green bond under the bank’s EMTN program and the first issued for an international investor under the Green Bond Principles
IFC ROLE
•IFC invested US$ 50 million
•Send a strong signal of support to potential investors
•Sharing IFC’s experience and expertise on Green Bonds and market
•Review of Yes bank’s pipeline of green investments
•Helped draft “Impact Reporting” and “Use of Proceeds” language
•Provided impact reporting tool and training to provide future investors environmental impact data.
CHINA GREEN FINANCE PROGRAM (CHUEE)-RISK SHARING FACILITY
As of June, 2016
231 loans disbursed by partner
FIs using IFC investment
products
Total loan amount>US$924million
Total investment US$2.3 billion
Annual GHG emission reduction:
22.8 million tons CO2 equivalent
Annual energy saved >44.2
million MWH
Kabeli A Hydroelectric Project (KAHEP) Nepal-Blended finance
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ABOUT PROJECT
•A 37.6 MW peaking run-of-river type hydropower project located in Panchthar District, Nepal developed by Butwal Power Company (BPC) and InfraCo Asia for an estimated project cost of US$100mm
IFC’S INVESTMENT
•Project part of the joint IFC – World Bank Nepal Hydropower Sector Strategy, that is being pursued with a number of strategic engagements
•IFC provided a loan of up to US$18.2mm with a tenor of 19 years
•IDA provided a loan of US$40 million for 20 year tenor
•Canada Climate Change Program (CCCP) provided US$18.2mm with same tenor as IFC
IFC ROLE
•IFC bringing in Blending Concessional finance catalyzed financing that addressed the perceived risks
•IDA and IFC (including concessional financing ) provided 80% of the project debt
Notable Advisory Projects
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Weather Index Insurance, Sri Lanka
Partnered with SANASA, to help farmers minimize the
impact of crop losses due to floods or droughts through weather based agricultural
insurance products
Expected Farmers Reach: 15000
PPCR, Nepal
Working with leading agribusiness firms to promote
improved agricultural and water management practices
and introduce new technologies among small
farmers
Expected Farmers Reach: 15000
PPCR, Bangladesh
Working with leading agribusiness and insurance
Company to provide climate smart products and services
to firms and supply chain members and to better
manage climate risks
Expected Farmers Reach: 75000
Lighting Asia
Addressing the systemic market barriers that are
impeding the development of markets for off-grid appliances
and mini-grids
Enabled energy access to 6.5 million people
Rajasthan Street Lighting PPP
one of the largest single city energy efficient street lighting project in India,
Benefitting 1.65 million people
PaCT Bangladesh
Working with ten apparel brands on harmonizing procurement guidelines
related to water efficiency in the supply chain, 200 textile
factories on the identification of resource
efficiency measures
Expected water savings: 25 million cubic meters in a year
https://www.youtube.com/watch?v=sDuH18tYL9A&feature=youtu.be