FINANCING GREEN PROJECTS IN AGRIFOOD SECTOREXPERIENCE FROM THE EBRD REGION

Dana KupovaPrincipal, Energy Efficiency and Climate Change

OFFICIAL USE

What is EBRD?

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• Multilateral financing institution established in 1991 to support

transition to market economies

• Owned by 65 countries, the EU and the EIB

• €30 billion capital base

• €41 billion portfolio

• €9.2 billion average annual

business in the past 3 years

3 key operational principles

• Sound banking

• Transition impact

• Environmental sustainability

OFFICIAL USE

The EBRD has a target of 40% of its

investments to be towards green projects

by 2020.

The share of green investment in

agribusiness was 25% in 2016, equivalent

of EUR 200m.

How we differ in terms of project assessments?

3

Credit and financial risks

Environmental and social risks

Integrity analysis

Civil society engagement

Market transition impact

Green Economy Transition impact

How projects

are assessed

at the EBRD:

OFFICIAL USE

How does the EBRD support?

4

EBRD

(+OTHER) COMMERCIAL

FINANCING

CONCESSIONAL

CO-FINANCING

POLICY

DIALOGUE

TECHNICAL

ASSISTANCE

• Directly from EBRD: loans, equity

investments or guarantees

• Mobilising additional

commercial sources

• Indirectly via local partner

financial institutions:

lending, leasing

• Working with

governments on

legislation that creates

optimum conditions for

green investments

• Supporting the

development of legal

instruments and best

practice guidelines

For eligible investments which

face particular barriers:

• Targeted facilities priced

below market terms

• Selective partial investment

grants or incentive payments

• First-loss cover or guarantees

• Resource efficiency audits

• Capacity building for local

financial institutions (staff

training, marketing, green retail

lending products)

• Climate vulnerability assessment

• Project structuring support

(e.g. tendering, investment

guidelines)

• Support to adopt operational

or CSR-type standards (energy

management, buildings

certification, reporting)

OFFICIAL USE

What are the key barriers for technology deployment?

Low market

penetration of

technologies

Knowledge gaps &

capacity

Inadequate

regulatory

framework

Availability of

financial

instruments

Underdeveloped

supply chains

FINTECC provides information on climate technologies through its

technical assistance

FINTECC offers project preparation support to develop bankable

projects

FINTECC is working with governments to support frameworks that

incentivise technology transfer

FINTECC offers grants along with EBRD lending to support investment in

eligible climate technologies

FINTECC connects clients with suppliers of climate technologies

OFFICIAL USE

How we address the barriers?

Example 1: FINTECC approach

FINTECC

It supports companies to implement

advanced climate technologies that

reduce greenhouse gas emissions and/or

increase climate resilience by providing

grants and technical assistance in the

context of an EBRD investment.

EXAMPLES OF ELIGIBLE

TECHNOLOGIES – early adopters

• High-grade thermal insulation of

buildings

• Solar cooling

• Efficient irrigation systems

• Heat recovery systems

• LED lighting

• Water, fertilized management systems

SECTORS & CLIENTS

All private sector , non multinational

clients are eligible.

The programme targets primarily the

Corporate sector.

COUNTRIES

FINTECC is funded by the GEF, the EBRD

and the EU

OFFICIAL USE

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Sustainable Value Chains

Company financed directly by

the EBRD

Tier 1 suppliers

Tier 2 suppliers

EBRD financing

EBRD technical assistance

(through established donor

funded frameworks of the EBRD)

Aggregator

• Technical assistance for

innovation in operations,

productivity, management and

mitigation of environmental,

sustainability and health and

safety risks, adoption of quality

standards.

EBRD Financing Technical Assistance

How we address these barriers?

Example 2: Value chain approach

• A number of products of the EBRD already

address SMEs and assist them in becoming

more competitive and efficient, such as credit

lines or Advisory Services for Businesses

• New instruments are being piloted which leverage

the network of larger aggregators (often financed

directly by the EBRD) to strengthen the position of

SMEs in the global value chains.

Non-TC support

OFFICIAL USE

Producing sustainable agricultural products

in Morocco

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CLIENT AND PROJECTElephant Vert is a Morocco-based producer of innovative bio-fertilisers, bio-pesticides and bio-stimulants. The EBRD is supporting the company to boost research and development and to quadruple production capacity, marketing and distribution of these climate-friendly agricultural inputs.

FINANCING PLANEBRD loan € 24 million

Other financing sources € 27 million

FINTECC grant support € 0.4 million

A new bio-fertiliser production site benefits from partial grant support from EBRD’s Finance and Technology Transfer Centre for Climate Change programme. FINTECC aims to accelerate the uptake of advanced resources efficiency technologies in countries with low market penetration rates.

GREEN ECONOMY IMPACTBio-fertilisers are produced by recycling organic agricultural and municipal wastes. This reduces landfill volumes and contributes to a low-carbon circular economy.

• 2.5 tonnes of waste are recycled to produce 1 tonne of bio-fertiliser. The project will enable the recycling of 3% of Morocco’s annual municipal waste.

• Unlike chemical fertilisers which lead to loss in soil fertility and leaching, bio-fertilisers enhance soil fertility and reduce irrigation water use by 50%.

• Greenhouse gas emission reductions of over 150,000 tonnes of CO2 are estimated from avoided landfilling and the replacement of chemical fertilisers.

Photo credit: www.elephant-vert.com

OFFICIAL USE

Helping Moroccan food producer invest in

advanced efficient technologies

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CLIENT AND PROJECTA family-owned Moroccan SME producing confectionary products for local and export markets.

EBRD is providing support for the construction and operation of a new production site on the outskirts of Casablanca. The total investment value is of €15 million.

INVESTMENT PLANEBRD loan (in Moroccan Dinars) € 4.6 million

of which finance forsustainable energy measures € 2.2 million

Grant support for adopting advanced technologies € 0.3 million

Other commercial and own financing € 10.4 million

SUSTAINABLE ENERGY MEASURESAssessment funded by the EBRD Special Shareholders Fund evaluated feasibility of on-site PV generation and recommended additional energy efficiency measures (average payback of 6 years):

• Roof-mounted PV system

• Ice-based energy storage system to balance daily energy use and supply between cooling and cold storage needs

• Energy management system and ISO 50001

• Energy recovery from furnace chimney

• High-grade thermal insulation of building.

TECHNOLOGY TRANSFER SUPPORTThe project benefits from partial grant support from EBRD’s FINTECC programme which aims to accelerate the uptake of advanced resources efficiency technologies in countries with low market penetration levels and underdeveloped supply chains.

IMPACT OF PROJECT• Fuel savings of some 600 tonnes of oil and annual emission

reductions of 2,200 tonnes of CO2 (equivalent to the annual footprint from driving 500 average household cars in the UK).

• At the time of signing, the planned roof-mounted solar installation of 1.4 MW was the largest of its kind in Morocco.

OFFICIAL USE

Climate technology transfer

Increasing water efficiency in fruit plantations

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CLIENTTunisian branch of an international agribusiness specialised in producing fruits and vegetables for European and North African markets.

EBRD SUPPORTSupporting the establishment and operation of an 80ha agricultural plantation in Bizerte Governorate, focused on cultures of raspberries and other fruits.

Agricultural producers in North Africa face increasing water shortages and deteriorating water quality. Thus the investment includes advanced water harvesting and water recycling systems.

ADVANCED SOLUTIONSSome of the advanced water efficiency solutions supported with EBRD finance were:

• Rainwater drainage for collection

• UV & chlorine treatment for disinfection

• Nutrient control and computerised drip irrigation.

INVESTMENT PLANEBRD loan € 4 millionof which climate resilience finance € 1 million

PROJECT IMPACT• Rainwater harvesting reduces the company’s water

consumption by over 30%

• Reduced loss of soil fertilisers (P, Fe, K) through water recycling and introduction of hydroponic cultivation

• Wastewater treatment reduces the environmental impact caused by discharge of effluents.

OFFICIAL USE

THANK YOU

For more information:http://www.ebrd.com/what-we-do/get/knowledge-hub.html

OFFICIAL USE

Mainstreaming green financing

Results in 2006 – YTD 2017

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FINANCED

1,400projects and credit lines

1,000+ directly financed

projects with green

components, and

290 credit lines to locals

financial institutions for on-

lending to smaller projects

SIGNED

€24.7 billionof green financing

For projects with a total value

of €145 billion

In 2014-2016 green financing

represented 36% of EBRD’s

total business, up from only

15% in 2006.

REDUCED

97 million tonnes of CO2/year

Emission reductions more

than annual energy emissions

of Romania

+annual water savings of 200

mln m3 since 2013 equal to a

third of Londoners’ water use

OFFICIAL USE

Mainstreaming green financing

Green economy investments

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A green economy is a market economy where investments are made

taking account of their environmental impact and with particular

concern for the sustainable use of natural resources. Green economy

projects, or project components, can be from the following areas:

• Energy efficiency

• Renewable energy

• Water efficiency

• Resilience to climate change

• Waste minimisation and materials efficiency

• Pollution control and environmental compliance

OFFICIAL USE

The EBRD mandate and the green economy

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Credit and financial risks

Environmental and social risks

Integrity analysis

Civil society engagement

Market transition impact

Green Economy Transition impact

How projects

are assessed

at the EBRD:

OFFICIAL USE