Accessing GCF Private Sector Financing

1. Andreas Lunding
Senior Structured Finance Specialist
Private Sector Facility (PSF)
Brussels, 30 June 2017
Accessing GCF Private
Sector Financing

2. 2010 20162014
Established by 194
countries (UNFCCC
Conference of
Parties)
Began operations in
Songdo, South Korea
2013 2015 2017
Over USD 10 billion
pledged to GCF
from 43 countries
First project approvals
Project portfolio
crosses USD 2 billion
PSF launches first
pilot programme
on MSME
GCF’S Mission
PSF Expands
GCF is a new global fund created under the UNFCCC to combat climate change by investing in low-
emission and climate-resilient development with the aim to keep global temperature increase <2° C

3. Encourage innovation
Develop public-private climate-
resilient infrastructure
De-risk investments
Bundle small projects into larger
portfolios
Support capacity building
PSF provides concessional debt,
equity, guarantees, and grants
through a range of financing
structures (project-based, funds,
structured finance vehicles etc.)
PSF is a dedicated facility within
GCF with the mission to:
 Finance catalytic mitigation and
adaptation projects and
programmes that mobilize
private sector funds
 Unlock private climate finance
in developing markets
GCF’S Private Sector Facility (PSF)

4.  We understand the value of investing in climate
finance in developing countries
 We have a special focus on Least Developed
Countries (LDCs), Small Island Developing States
(SIDS), andAfrican states
 We engage institutional investors, local financial
intermediaries and corporates to co-invest with
GCF in projects
 We offer long-term funding through various
instruments and can structure in concessionality to
achieve results
 We are a strategic and flexible investor and partner
PSF’S Value Proposition

5. How Do We Do It?
A Collaborative Approach
PSF
PE
Funds
Local /REG
Financial
Intermediaries
Local/INT
Corporates
FP DAEs RfP
NOTE: If a non-accredited entity’s project is selected
through an RfP they will either work in partnership with
an accredited entity or become accredited alongside
the funding proposal.
NDAs: National Designated Authority
AEs: Accredited Entities
FP: Funding Proposals
DAEs: Direct Access Entities
RfP: Request for Proposals
REG: Regional
INT: International
AEs
RFPs: GCF issues Requests
for Proposals based on
specific private sector
initiatives and funding gaps
FPs: Funding Proposals
are received on an open,
continuous basis
AEs: GCF works through Accredited
Entities (AEs/DAEs) to channel its
resources to projects

6. Mandate & track record
 Alignment with GCF’s objectives
 At least three years of operations
Project size
 Micro (<USD 10M)
 Small (USD 10-50 M)
 Medium (USD 50-250M)
 Large (>USD 250M)
Fiduciary functions
 Basic
 Specialized
• Project management
• Grant award
• On-lending/blending (loans,
equity and/or guarantees)
Environmental & social safeguards
 A (potential high impact)
 B (medium impact)
 C (minimal or no impact)
Accreditation Approach
The accreditation process ensures our partners share our objectives, and that they have the necessary
experience and financial/managerial infrastructure.

7. GCF Accredited Entities
We work with a growing range of leading investors and changemakers within global climate finance.

8. GCF Strategic Results Areas
With a focus on…
 Impact and paradigm-shift potential
 Crosscutting adaptation-mitigation benefits
 Sustainable development co-benefits
 Minimum concessionality for private sector deals

9. GCF Project Review Cycle
Performance against investment criteria
 Impact potential
 Paradigm shift potential
 Sustainable development potential
 Needs of the recipient
 Country ownership
 Efficiency and effectiveness
Consistency with GCF policies
 Environmental and social safeguards
 Gender policy
 Results management and reporting
 Risk – risk-sharing structures where relevant
 Legal
 Private sector: minimum concessionality /
minimizing market distortions

10. AFRICA 45.3%
ASIA PACIFIC 29.1% LATAM & CARIBBEAN 22.2%
EASTERN EUROPE 3.4%
GEOGRAPHIC
DISTRIBUTION
Where We Have Invested
42%
39%
1%
18%
TOTAL FUNDING AMOUNT
GCF PORTFOLIO (45 projects): USD 2.240 B
PRIVATE SECTOR (PSF) (11 projects): USD 1.187 B
GRANTS CONCESSIONAL
DEBT
GUARANTEES EQUITY Status as of April 2017
TOTAL
OF
WHICH
PSF
9% 80% 90%
97%

11. Examples of Private
Sector Projects
Investment goals:
 Provide early and growth equity capital to strong
renewables and energy efficiency companies in
developing markets.
 Catalyze institutional investors into renewable
energy and energy efficiency investments in
developing countries, resulting in a large
multiplier effect for climate investments.
 Emissions reduction of 769M tCO2e.
GEEREF NeXt
Countries:
 Multiple Countries – Global.
GCF Investment:
 USD 250M in equity and USD 15M in
grants.
Description:
 An innovative fund-of-funds with the aim
of being the first private equity backed
investor in renewable energy and energy
efficiency projects.

12. Examples of Private
Sector Projects
Investment goals:
 Mainstreaming energy efficiency and renewable
energy in the financial sector.
 Promoting local capacity and aligning with the
notion of country ownership.
 Emissions reduction of 29.1M tCO2e.
Sustainable Energy
Financing Facility
Countries:
 Armenia, Egypt, Georgia, Jordan,
Moldova, Mongolia, Morocco, Serbia,
Tajikistan,Tanzania.
GCF Investment:
 USD 344M in loans and USD 34M in
grants.
Description:
 On-lending programme and climate
finance at scale through partner Financial
Institutions.

13. Examples of Private
Sector Projects
Investment goals:
 Investment under GCF’s USD 100M pilot MSME
RFP programme launched in 2016.
 At least half of the financial support will go
towards women-led MSMEs.
 Emissions reduction of 1.2M tCO2e.
MSME RFP
ProgrammeCountries:
 Mongolia.
GCF Investment:
 USD 19.5M in loans and USD 0.5M in
grants.
Description:
 Loans to Mongolian enterprises investing
in energy efficiency and renewable energy
projects.

14. NEW: Mobilizing Private Capital
(Request For Proposal)
Greenclimate.fund/500m
TARGET COUNTRIES:
 Developing countries - Global
GCF INVESTMENT:
 Up to USD 500M in few
projects/programmes
DESCRIPTION:
 Call for mitigation and adaptation projects and bold ideas
that mobilize private sector capital at scale
 Can fund activities across a wide range of mitigation or
adaptation areas, such as climate-proof infrastructure, urban
energy efficiency, ecosystem services, and agriculture
INVESTMENT GOALS:
 Jumpstart projects that need early stage equity,
guarantees, concessional lending and grants to reach a
critical size and attract funding from private investors
 Focus on getting new entities to participate

15. NEW: Mobilizing Private Capital
(Request For Proposal)
Greenclimate.fund/500m
WHO CAN PARTICIPATE?
 Existing accredited entities
 Entities that wish to be considered for accreditation (fast track)
WHAT MAKES A STRONG RFP SUBMISSION?
 Climate impact (optimal economic efficiency)
 Leverage/multiplier effect for private sector investment
 Regulatory reform and institutional capacity building
 Innovative, scalable & sustainable solutions
 Social impact including for the poorest and for women
 Activities in most vulnerable countries
WHY PARTICIPATE?
 Change the risk-return profile of your project to encourage
private sector investor participation

16. REACH OUT
WEBSITE:
Greenclimate.fund
EMAIL:
privatesector@gcfund.orgAndreas Lunding
Senior Structured Finance Specialist
GCF, Private Sector Facility
Email: alunding@gcfund.org