Ecosystems, Infrastructure and the Environment: Emerging Markets Considerations
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Transcript of Ecosystems, Infrastructure and the Environment: Emerging Markets Considerations
Ecosystems, Infrastructure and the Environment: Emerging Markets Considerations
June 9, 2006
Motoko Aizawa
International Bank for Reconstruction and Development, 1945
International Finance Corporation, 1956
International Development Association, 1960
Multilateral Investment Guarantee Agency, 1988
IFC: Part of theWorld Bank GroupIFC: Part of theWorld Bank Group
IFC is owned by its 178 member countries, which collectively determine policies.
International Centre for Settlement of Investment
Disputes, 1966
World Bank Group Institutional RolesWorld Bank Group Institutional Roles
IBRD lends to governments of middle-income developing countries.
IDA provides concessional loans to governments of the poorest developing countries.
ICSID facilitates the settlement of investment disputes between governments and foreign investors.
MIGA provides guarantees to foreign investors against noncommercial risk.
IFC’s Mission IFC’s Mission
To promote sustainable private sector investment in developing countries, helping to reduce poverty and improve people’s lives
IFC Sustainability Policy Framework
Sustainability Policy
• 8 Guidance Notes • Environmental, Health &
Safety Guidelines• Good Practice Materials
Disclosure Policy
IMPLEMENTATION
Environmental and Social Review
Procedure
IFC
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INS
TIT
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ION
AL
CL
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PR
OJ
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REQUIREMENTS
8 Performance Standards
Overview Performance Standards
PS 1: Social & Environmental Assessment and Management System
PS 2: Labor and Working Conditions PS 3: Pollution Prevention and Abatement PS 4: Community Health, Safety & Security PS 5: Land Acquisition and Involuntary Resettlement PS 6: Biodiversity Conservation and Sustainable Natural
Resource Management PS 7: Indigenous Peoples PS 8: Cultural Heritage
Key Features of Performance Standards
Principles based, not rules based Outcomes oriented, not procedure based PSs / GNs refer to relevant international agreements Human rights relevant to private sector operations are
embedded in the standards Most comprehensive set of social standards for the
private sector New climate, ecosystems and natural resources
features
Climate, Ecosystems and Natural Resources under the Performance Standards
PS 1 requires project sponsors to assess all potential adverse risks to the environment and people
PS 6 requires particular attention to threats to biodiversity, including ecosystems services
PS 3 requires:― Incorporation of resource conservation and energy efficiency
measures―GHG quantification and monitoring for projects with potential GHG
emission over 100,000t annually PS 4 requires projects to have emergency preparedness and
response plans PS 1 requires assessed risks to be managed through an
appropriate social and environmental management system IFC reviews project proposals for compliance; also provides
technical and financial assistance
Expected Impacts on the Market
Easier for lenders to communicate & for business people to apply requirements
Modular structure is adaptable to various business models―Adoption of the Performance Standards via the Equator
Principles Levels the playing field for lenders Helps developers prepare projects for financing Multiplier effect beyond projects financed by IFC – 80% of
global project financing arranged
World Bank Group’s Clean Energy & Development Investment Framework
Following the Gleneagles Communiqué:Three-prong structure of an Investment Framework:
1. Meeting the challenge of clean energy needs with no carbon constraints for developing countries
2. Investments to realize low carbon economy and reduce GHGs
3. Actions needed to adapt to climate change
Clean Energy for Development
IEA estimates: from 2003 to 2030, $8 trillion capital investments (average of $300 billion annually) needed for developing / transition country energy needs
Much needed are energy sector reform & mobilization of energy demand and supply technologies
Climate change presents an urgent and additional challenge―Poorest countries and people are the most vulnerable
Financing Options for Clean Energy
Clean Energy Financing Vehicle―A mechanism to transfer high efficiency technology for
mitigation Power Rehabilitation Facility for rehab of inefficient
power plants Project development fund for public and private sector
participation Venture capital funds for technology adoption
―For financing and clean energy technologies for market penetration
Adaptation to Climate Change
Priority areas = countries with highest % of population affected by climate change―Zimbabwe, Malawi, Samoa, China, Cambodia and
Swaziland Transfer of existing and new technologies; revision of
planning standards & systems Development of information and tools Disaster preparedness R&D Private sector considerations