3rd Annual OECD Green Investment Financing Forum

1. Private Sector Engagement on Climate
Change: The ADB Experience
Preety Bhandari
Director
Climate Change and Disaster Risk Management Division

2. ADB’s Climate Finance Target

3. ADB Climate Finance

4. ADB Approaches to Climate Finance Mobilization
Internally-managed funds
• Clean Energy Financing
Partnership Facility
(CEFPF)
• Climate Change Fund
(CCF)
• Others with bilaterals
Externally-managed funds
• Climate Investment
Funds (CIFs)
• Global Environment
Facility (GEF)
• Green Climate Fund
(GCF)
• Carbon finance
 Asia Pacific Carbon
Fund (closed in 2014)
 Future Carbon Fund
• Carbon Market Technical
Support Facility
 CDM support
 domestic emissions
trading
• Supporting other market
mechanisms
Japan Fund for the Joint
Crediting Mechanism
 Renewable energy
credits; feed in tariffs
• Green and climate bonds
• Direct project finance
(lending, guarantees,
syndications), and
equity investment
• Public private
partnerships: (PPPs)
working with client
DMCs across stages of
PPPs
• New modalities
(climate bonds)
Deploying
concessional
resources
Maximizing
market mechanisms
Catalyzing
private capital

5. Initiatives to mobilize private sector
• ADB-Canada Climate Fund for the Private Sector in Asia ($81.5
million)
– ADB’s first concessional debt cofinancing facility to support
private sector operations to combat climate change
• Asia Climate Partners
– A climate PPP Fund to support equity investments
• Accessing Climate Investment Funds Dedicated Private Sector
Program
• IPEx Cleantech Asia – first low carbon technology exchange and IP
transfer platform (marketplace)
• $1.81 billion raised for green bonds (as on date)
• Proposed Asia Climate Finance Facility (ACliFF)

6. Asia Climate Partners

7. Asia Climate Finance Facility (ACliFF)
• To be established with an initial capitalization of at least $100 million,
with a contribution of up to $30 million from German Federal Ministry
for Economic Cooperation and Development (BMZ) (pending
parliamentary approval)
• Objectives:
– Assist developing countries in accessing climate finance and
overcoming barriers to scaling-up investment through new and
innovative cofinancing measures, incl. guarantees and climate risk
insurance
– Provide technical assistance and origination, structuring, and de-
risking of climate-positive investment projects; and catalyze funding
from a broad range of sources, including the private sector
• Fully established and operational by 2017

8. • $ 225 mn equivalent local currency bond, with
ADB providing credit enhancement in the form of a
guarantee of 75% of principal and interest on the
bond, and a term loan of $ 37.7 mn
• First climate bond in Asia Pacific for a single
project in an emerging market; certified by CBI
• First local currency bond in power sector & the
first credit enhanced project bond in
Philippines8
Project Sample: Innovation on Climate Financing
Climate Bond: Tiwi Makaling-Banhaw ( MakBan) geothermal
power plant complexes in the Philippines

9. Enhancing Energy Sector Innovations: New business model
Simpa Networks (“Off Grid Pay-As-You-Go Solar Project”) in India
• ADB Investment: $2 million equity investment in 2013, $5 million CTF loan in 2015
• Investee: Simpa Networks, a venture-backed technology company with a bold mission:
to make modern energy simple, affordable, and accessible for everyone.
• Strategy: Simpa offers an unique pay-as-you-go metering solution for off-grid solar
home systems in rural India by using mobile phones technology to transform recurring
energy expenditures into an eventual capital asset purchase. Scaling up of solar “leasing
as a service” model.
• Development Impacts: Increased access to affordable clean energy for base of the
pyramid (BoP) consumers in rural India, avoiding the greenhouse gas emissions by
reducing kerosene usage.
Project Sample: Innovation on Climate Financing

10. Issues & Opportunities
Predominant investments in
energy sector
Private sector and adaptation
investments? Beyond agribusiness
Leveraging policy dialogue for an
enabling environment for private
sector- beyond PPP?

11. For further information
https://www.adb.org/themes/climate-
change-disaster-risk-management/main
https://www.adb.org/site/private-sector-
financing/main