- The 7th Asia Forum for Clean Energy Financing (AFCEF-7) was held on 10 Feb 2017 in Singapore
- PFAN events at the COP 22 in Marrakesh
- CTI PFAN Organized the AFCEF-7 Project Development & Financing Workshop
- International climate community discusses how to unlock the Paris Agreement’s potential for market-based approaches
- CTI side event at UNFCCC Forty-fourth meeting of the Subsidiary Bodies – SB44 Bonn, Germany May 26, 2016
CTI Side Event at UNFCCC COP18 Doha, Qatar: November 26 & 30, 2012
The CTI held two side events relating to its work on the Private Financing Advisory Network (PFAN) during the UN Climate Change Conference in Doha, Qatar. These events brought together over 70 participants from a broad range of prominent stakeholders including national delegates, private sector, and multilateral organizations for panel discussions.
- November 26, 2012 Side event at the US Center – Agenda and Presentations
- November 30, 2012 Joint side event with REEEP – Agenda and Presentations
At the first side event held at the US Center, the CTI facilitated in-depth discussion on how adaptation related projects could attract private investment, drawing upon the experiences of project developers and developing country representatives in financing adaptation related projects.
Following the introduction of all panelists by Ms. Ashley Allen, USAID Climate Change Specialist, Mr. Elmer Holt, the Chair of CTI Executive Committee and the CTI PFAN Manager, gave a brief overview of CTI PFAN, as follows. CTI PFAN facilitates private project developers’ adequate communication of the merits of their project to the international financing communities. Since the start of CTI PFAN, 164 projects have been inducted into CTI PFAN development pipeline with 7 million tonnes of annual CO2 equivalent reduction potential, of which 34 projects have achieved financial closure with over USD 412 million of private sector investment raised.
Mr. Peter Storey, CTI PFAN Global Coordinator, gave details on CTI PFAN’s engagement in adaptation related projects as follows. At the exploratory workshop, most promising adaptation sectors were identified as access to energy, agriculture and agri-business, water and sanitation, and forestry and eco-system services. It is important to deliver adaptation related services and products at the cost local communities can afford, hence microfinance has a role to play in facilitating adaptation activities. The challenges facing adaptation related projects include lack of financing expertise, development capacity, seed capital, hard collateral and guarantees and land tenure, complexity in legal process and difficulty in project identification. So far five adaptation related projects have been inducted into CTI PFAN project pipeline for developmental assistance and further induction is expected by January 2013.
Mr. Peter Odhengo, Executive Coordinator of the Greening Kenya Initiative, introduced Kenya’s perspective on adaptation and its relationship with CTI PFAN as follows. Kenya is addressing adaptation challenge through the enhancement of multi-stakeholder and multi-sectoral processes, enabling policy and regulatory framework, and research and development activities. With the support of CTI PFAN, over $US4.6 billion was mobilized to enable projects under Green Entrepreneurial Transformation (GET) of Greening Kenya Initiative (GKI). The challenges facing the country are lack of financial, institutional and technological capacity, but opportunities exist in innovation and improved livelihoods.
Mr. David Ebong, Chairman of Clean Energy Partnership Africa, introduced a hybrid agro-processing project in Uganda, which was inducted into CTI PFAN adaptation related project development pipeline, as follows. This project in northern Uganda will construct an agro-processing industrial park based clean technology options to address the issues of lack of electricity and post-harvest processing facilities. Once realized the proposed agro-processing industrial park will increase farmers’ ability to adapt to changing climate through improving their access to market with value-added products and resource utilization.
Ms. Felistas Coutinho, Executive Director of Tujijenge Afrika Ltd, highlighted the role of microfinance in supporting adaptation related activities as follows. Giving consideration to microfinance is logical when pursuing adaptation because it serves people with low income who are dependent on the land and vulnerable to climate variability. Microfinance with an element of education can facilitate sustainable adaptation practices through increasing awareness. For example, in Tanzania, initial subsidies to microfinance companies to encourage investment in solar projects made those companies realize such projects are profitable, which encouraged them to carry on with further investment.
Moderated by Ms. Allen, the panelists answered questions and discussed issues further as below:
In response to a question regarding the interest rate of microfinance companies that is higher than one of the commercial banks, Ms. Coutinho explained that the interest rate is high because microfinance companies borrow from banks and the transaction cost is high due to its inherent labor intensiveness, but the rate is still lower than that of money lenders.
With regard to a comment on how women should be involved in adaptation related activities, Mr. Storey noted that measurement tools are being developed to address such social issues, and also pointed out that the assignment of Ms. Coutinho as the country coordinator of Tanzania would have a great impact in this respect. Mr. Odhengo stated that the recipients of the GKI’s programmes are mainly women, who are considered to have a major role to play in the transition plan initiated by Kenyan government. Mr. Ebong also noted that women are heavily involved in his project in northern Uganda.
In response to a question on the role of clean development mechanism, Mr. Storey noted that CDM currently plays a relatively small role, i.e. 30-40% of mitigation type projects under the CTI PFAN pipeline generally having minor impacts on profitability at around 3-4%.
CTI and the Renewable Energy and Energy Efficiency Partnership (REEEP) hosted the second side event in which ideas and proposals for technology deployment were presented in relation to the UNFCCC Climate Technology Center and Network (CTCN).
Mr. Holt made an introductory speech and introduced CTI & CTI PFAN as follows. CTI PFAN was founded to facilitate structuring of clean energy projects and development of fundable business plan in order to enable project developers access the private capital market. CTI PFAN has an extensive global network that is constantly growing with a variety of projects in terms of technology and region. CTI PFAN has a financial leverage rate of more than 1:100.
Dr. Emmanuel Tachie-Obeng of Environmental Protection Agency of Ghana presented the climate change initiatives of Ghana and the need for involvement of private sectors as follows. Ghana has established climate change policy and adaptation strategy, enhancing community outreach, technical capacity, fiscal resilience and indigenous knowledge. More financial input from private sector and support from CTI PFAN are required to realize the ban on importation of used and inefficient refrigerators, further deployment of renewable energy technologies, waste recycling and waste to energy projects.
Mr. Mark Radka, Energy Programme Coordinator, Division of Technology, Industry and Economics, UNEP, shared the information on the CTCN and the possible relationship with CTI PFAN as follows. The mission of the CTCN is to stimulate technology cooperation and to enhance the development and transfer of technologies and to assist developing country Parties at their request. The Conference of the Parties to the UNFCCC established a Technology Mechanism which consists of a Technology Executive Committee and a Climate Technology Centre and Network. The CTCN is accountable to the Conference of the Parties through an Advisory Board that provides guidance and approves certain functions of the CTCN. The consortium led by UNEP made a proposal to host the CTC with an intention to provide a wide pool of diverse technical knowledge and a broad range of expertise. The concept of the CTCN is for a small and cost-effective Core Center, led by UNEP in partnership with UNIDO, which is supported by a flexible Technical Resource Pool of experts constituted by eleven leading international institutions, or the consortium partners. Network members should have competence, experience and reliability with sound legal, technical and financial bases, and in this latter respect CTI PFAN has the characteristics that are required to function as one of the CTCN network members.
In response to a question regarding the CTCN’s envisioned connection with the private sector, Mr. Radka noted that there are two possibilities; participation in the Advisory Board, which is currently discussed at COP and TEC, and participation as Network members. CTCN will seek guidance from the Advisory Board on this matter to avoid any exclusivity of the Network.
Mr. Storey presented the ideas for mobilizing private finance through the CTCN using the CTI PFAN model as follows. The key function that CTI PFAN can bring to the CTCN is financial review and filtering of projects to decide whether a particular project is capable of attracting private financing, must resort to public funding, or requires public / private approach. The projects that are determined to be capable of receiving private sector funding will be inducted into CTI PFAN project development pipeline for providing necessary coaching and advisory services. If CTI PFAN is selected as a Network member of the CTCN, it will be able to function as a Network member beginning in the 2nd or 3rd quarter of 2013.
Mr. Martin Hiller, Director General of REEEP, introduced REEEP’s initiatives on supporting small and medium enterprises (SMEs) as follows. REEEP has a large implementers’ network providing solid management base which enables rapid deployment. REEEP and CTI PFAN shares common interests in expanding the renewable energy and energy efficiency market. Accordingly the two mechanisms should be able to make a successful linkage by REEEP initially locating the business ideas and CTI PFAN then taking over to support the projects at the project development and financing stage. REEEP also provides knowledge and data through reegle, a portal for open energy data. REEEP expects that the CTCN will build a specific focus on SME development, involve partners to harness key strengths, focus on sharing, avoid unnecessary repetition, use knowledge, information and data tools, and think multicultural in terms of languages, accessibility and relevance.
Moderated by Mr. Holt, the panelists answered questions and discussed issues further as below:
A question was asked as to why public funds should not be spent for clean energy projects, because the use of public funds could ensure that the return will be used further on more local clean energy projects. Mr. Storey responded that CTI PFAN’s activities is not displacing the ability of public sector to invest in viable projects to earn money to pay for public services. CTI PFAN helps mobilize private sector finance when private sector project developers have an idea for clean energy projects and there is not sufficient public funds available to realize such ideas.
In response to a question regarding the issues of enabling environment and regulatory framework, Mr. Storey emphasized that CTI PFAN can feed into the policy dialogue through CTI countries, REEEP and other funding partners while citing a case in Mozambique where a project achieved financial closure a day after the biofuel mandate was enacted. CTI PFAN also facilitates capacity building through workshops involving representatives of local government agencies and local financial institutions to help them understand the investment structure when private sector is involved.