Steve GormanProgram Manager

Global Environment ProgramEnvironment Department

The World Bank Group

World Bank provided $46.9 billion for 303 projects in developing countries worldwide in 2008;

Available Resources for Climate ChangeAvailable Resources for Climate Change

FY09 estimates are projections

Resourcesto address

Climate Change

Mitigation(Total Needs est.$170bn+ / year) Both M&A

Adaptation(Total Needs est. $28-67bn / year)

UNDP$ 0.09- 0.12 blln for adaptation

GFDRR $ 0.07 blln

Adaptation Fund

$ 0.3-0.5 blln

GEF $ 0.25 b

Adaptation funding

Other MDBs$3 billionfor FY09

EUGlobal Climate

Change Alliance€ 0. 3 blln

Bilateral Donors

$ ?

PrivateDonors

$ ?

FCPF$0.2 bREDD

GEF$ 0.25 bllnfor FY09

WBG RE & EE Progam(IBRD/IDA/IFC/MIGA)

$3.4 billionfor FY09

Carbon Market: CDM&JI

~ $ 8 billionfor FY09

Climate Investment

Funds (MDBs)$6.1 billion

MLF $2b since inception

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?

GEF: Global Environment Facility Allocated $2.4b to CC mitigation from 1991-2008 Current GEF-4 Replenishment $1b for CC, $250m per year GEF-5 Replenishment beyond 2010

CIF: New funds, esp. Clean Technology Fund (CTF) Pledges of $6.1b across all components of CIF Pledges of $5.2 b especially for CTF

CF: Newly established Carbon Partnership Facility (CPF) Existing funds of $2b for period up to 2012 largely committed CPF pledges of $200m will open first tranche for operation

World Bank Group’s own resources FY08 Approvals of $2.7b for renewables and energy efficiency,

including GEF, IFC, MIGA, IBRD, and IDA Target of $3.3 billion for FY’09 to EE and RE

How to utilize the above for HCFC phase-out and maximize the impact of the limited resources

available?

Year

Cash Flow

(-)

(+)

Baseline development project—BAU—no GHG mitigation

Year

Cash Flow

(-)

(+)

Redesigned project—higher costs & benefits

Year

Cash Flow

(-)

(+)

GEF/MLF

Year

Cash Flow

(-)

(+)

CTF

Year

Cash Flow

(-)

(+)

CF

Year

Cash Flow

(-)

(+)

GEF/MLF

CF

CTF

Each must be used in a manner consistent with its objectives and approaches GEF: Focus on barrier removal—source of grant

funding to establish conditions for market sustainability

CTF: Focus on investment support—providing investment support in form of loans, grants or guarantees

CPF: Performance reward to provide extra revenue to scale-up carbon-reducing investments

MLF: Identify applications of strategic importance to phase-out and find intersection with above

May be linked simultaneously in same project structure or sequentially through a consistent programmatic approach

MLF provided $1m grant—30 chillers Total market has 189 ODP t Given GWP, equals 378,000 t CO2 eq

GEF provided $6m—185 chillers Interested in energy savings, 4.8 TWh over 20 years Equal to 3.9 m tonnes CO2 eq plus replication

CDM-Spanish carbon fund Purchase CERs from project—revenues to revolving

fund Flows of CER’s, 982,000 CER’s valued at $12m

Private investors---$80m to make investment complete

GEF-directGEF-direct4.6 m tCO4.6 m tCO22ee

CDM CDM 982,000 tCO982,000 tCO22ee

MLF MLF 95,00095,000tCO2etCO2e

GEF-GEF-indirectindirect

8 m tCO8 m tCO22ee

CDMCDM$12 million$12 million

GEF GEF $6 million$6 million

MLF MLF $1 $1 millionmillion

Private SectorPrivate Sector$80 million$80 million

Leveraging enables MLF

Funds to achieve

greater impact and investment

Objectives are not identical, but overlap can be found To reduce growth in GHG emissions linked to HCFCs Condition markets; scale-up markets; enhance revenues

Instruments are compatible with each other—can be used sequentially or simultaneously Requires foresight, strategic thinking Building upon HCFC phaseout for greater EE & GHG reductions

Some complexities do exist Issues of eligibility Focus on larger countries Changing strategy and focus Sunset clause

Although programmatic approaches can be tailored to all four instruments, need to focus on problem at hand

IFFIm was launched in 2006 thanks to the initiative of the United Kingdom Government. IFFIm is also supported by France, Italy, Spain, Sweden, Norway and South Africa who have together pledged to contribute US$ 5.3 billion to IFFIm over 20 years.

This strong financial base enables IFFIm to have a triple-A rating from the three major rating agencies.

IFFIm raises finance by issuing bonds in the capital markets and so converts the long-term government pledges into immediately available cash resources.

The long-term government pledges will be used to repay the IFFIm bonds. The World Bank acts as financial adviser and treasury manager to IFFIm.

DonorsUp to 20-

year Grants

Financial Manageme

nt

International Facility for Ozone/Clima

te (IFFOC)

Country Driven ODS and Climate

Protection Programs

InvestorsCapital Market Funding

Carbon Revenues from Compliance

and Voluntary Markets

Opportunities do exist to utilize multiple sources of funding in projects that will replace HCFC with the most optimum ozone and climate friendly technologies

Innovative financial engineering model to monetize future commitments to support up-front investment exists and could be applied to future commitments (MLF contributions) and future revenues (CERs)

Strategic thinking is necessary to piece together puzzle and maximize global benefits

As much as strategy, patience may be even more necessary

Cooperation and synergies are necessary to leverage large impacts and benefits