OECD Climate Change Expert Group Global ForumBreakout Group 2

Scale-up and replication of climate finance interventions

Chizuru AokiCoordinator, Climate Change Mitigation Team

19 March 2014

Scale-up and Replication of Climate Finance: GEF Perspectives

Key Questions

• What are broad lessons from replication and scaling-up experiences to date?

• What are implications for the balanced provision of climate finance between mitigation and adaptation?

Snapshot of GEF

Adaptation• Since 2002 through

SPA, LDCF and SCCF• 230 projects• Total GEF grant of

~$1.2 billion• Co-financing of ~$5.5

billion

Mitigation• Since 1991, through

GEF Trust Fund • Over 750 projects• Total GEF grant of ~ $3

billion• Co-financing of ~ $25

billion

Tailor support to specific needs of each project and country Facilitate partnerships among international organizations, authorities, private

sector and other actors to create conditions for successful climate finance

Impact of GEF Interventions Progress towards impact: assessed through extent of broader adoption

of interventions by stakeholders Replication and scaling-up: two “pathways” for broader adoption GEF Climate Mitigation projects showed progress towards broader

adoption, as assessed by GEF Independent Evaluations Office (IEO): 77% of projects in 4 emerging economies (Impact Evaluation, 2013) 66% of recently completed projects (5th Overall Performance Study, 2013)

1. Sustaining

2. Main-

streaming

3. Replication

4. Scaling-up

5. Market change

Key Evaluation Findings and Lessons Successful projects adopted comprehensive

approaches to address market barriers with targeted supportive policy frameworks

Project relevance to stakeholders and demonstration of technology applicability, effectiveness and feasibility are important

Projects with large greenhouse gas impact had replication factored into project design

Profitability & cost-effectiveness are key for replication needed for private sector engagement

Roles of countries as regional leaders are important for scaling-up, if facing comparable challenges

Technical standards and national support policies are effective for scaling-up (GEF IEO, 2013)

GEF Approaches to Enhance Cooperation in Climate Finance

Transforming policy and regulatory environments

Demonstrating innovative approaches

Strengthening institutional capacity

Building multi-stakeholder alliances

De-risking partner investments

Pursuing complementarity in climate finance is key to facilitate replication and scale-up

GEF invests in individual and across focal areas to deliver global environmental benefits, through five approaches

Example: Demonstrating Innovative Approaches

Source: Fraunhofer-ISI, “Assessment of the World Bank/GEF strategy for the market development of concentrating solar thermal power” (2006);

Concentrating Solar Power (CSP) in Egypt, Morocco, Mexico

Co-financing: 7.7x

$142M in grants to support four large-scale projects in Egypt, Morocco, Mexico and India to push concentrating solar power down the cost curve

Source: MSNBC

Partner roles & contributions

▪ World Bank: engaged with different partners across countries depending on policy and market context, and provided key loans

▪ GEF: supported demonstrations and shared information among countries; facilitated scale-up investments by CTF & others

▪ Governments: provided significant funding, policy support▪ Private sector: catalyzed development of an industry & technology where there

previously had been little global activity

▪ Even projects that were less than fully successful provided key lessons learned for future GEF and industry investments

Example: Building Multi-Stakeholder Alliances

Partner roles & contributions World Bank: Soft loans integrated into

regional program (TerrAfrica); loans supporting Building Resilience through Innovation Communication & Knowledge Service at country-regional level

GEF: Facilitating integration of climate adaptation, mitigation, land degradation and biodiversity priorities

Governments: policy reforms on forest, agriculture, land management sharing of traditional knowledge and best practices

Map by John Kappler, National Geographic

Great Green Wall Initiative

Co-financing: 18x

Support regional program with 12 countries to address national priority challenges of desertification + climate vulnerability in an integrated manner

Example: Building Multi-Stakeholder Alliances

Partner roles & contributions GEF: public-private

partnership to develop and promulgate best practices

Governments: Over 60 countries committed to phase-out of inefficient lighting and policy reforms/incentives

Private sector: providing key technical expertise and corporate leadership

Some Thoughts towards GEF-6

1. Enhance synergy among institutions: Complementing each other and leveraging private sector, towards higher impact together

2. Thematic integration is happening: More projects that address mitigation and adaptation, multi-sector projects across Conventions

3. Differences exist in mitigation and adaptation financing: Flow of finance, types of co-financing, etc.

Pursue complementarity in climate finance: Key theme for proposed GEF mitigation and adaptation strategies

Enhance impact on the ground: Five approaches to be used to inform GEF-6 project development

GEF’s Unique Value for Climate Financing

1. Facilitating innovation & technology transfer

2. Catalyzing systemic impacts through synergistic multi-focal initiatives

3. Building on Convention obligations for reporting & assessments

towards mainstreaming

Assisting developing countries in defining and implementing mitigation measures towards 2015

agreement

Thank you for your attention

Please contact us at :

Chizuru Aoki: caoki@thegef.org

1818 H Street, NW, Mail Stop P4-400 Washington, DC 20433 USA

Tel: (202) 473-0508 Fax: (202) 522-3240/3245

Proposed GEF-6 Climate Mitigation Strategy

• Program 1: Low carbon technologies and mitigation options

• Program 2: Innovative policy packages and market initiatives

1. Promote innovation &

technology transfer

• Program 3: Integrated low-carbon, urban systems

• Program 4: Forests and other land use, and climate smart agriculture

2. Demonstrate systemic impacts

of mitigation options

• Program 5: Convention obligations for planning and mitigation targets

3. Foster enabling conditions to mainstream mitigation

concerns into SD strategies

Goal:

To support developing

countries to make transformational

shifts towards

low emission, resilient

development path

GEF scaling up models for energy efficiency

GEF leveraging private sector investments in energy efficiency

• 2006, $16.9 million GEF grant, $200 million IFC loan for EE marketing, development and financing services

• 2012, leveraged about $800 million local bank loans for 170 plus EE/RE projects

• Now, mitigates over 19 million tonnes CO2 pear year = total annual emissions of Mongolia

• CHUEE 3 is currently under implementation in China

15

Case study of GEF/IFC CHUEE

GEF support to transforming China’s renewable energy (REDP and CRESP)

Recent Analysis:Impact Evaluation

77 % of 18 projects from 4 emerging economies reviewed in depth showed high, significant, or moderate progress towards broader adoption

• Replication– Activities replicated in 15 projects, traced back to GEF projects– Types of replication: private sector replication; with support by national institutions,

strategies, or policies; through national, GEF, or ODA support; decentralized public sector replication

• Scale-up– Scale-up with causal links to GEF projects in 11 projects; 6 projects working on scale-up

with or without GEF or government support– Types of scale-up: within project countries; in other countries; national support policies

with causal relationship with GEF project, product and technology standards and specifications developed in GEF projects (GEF IEO, 2013 a, Climate Change Mitigation Impact Evaluation)

Recent Analysis:Fifth Overall Performance Study of GEF

66% of 113 completed climate change mitigation projects had broader adoption initiatives adopted or implemented

• Mainstreaming: most common mechanism of broader adoption– Policy, legislative, and regulatory measures– Mainstreaming of financing and promotion of energy efficiency and renewable

energy, such as lease purchase agreements, funds, ESCOs

• Replication– Technologies and infrastructures most commonly replicated

• Scale-up and Market Change– Not common among project cohort– Technologies and infrastructure most common measures (GEF IEO, 2013b, Fifth

Overall Performance Study of the GEF)