1. PLENARY 1 – “Visioning the Strategic Role of DFIs” Takashi Hongo Special Advisor and Head of Environment Finance Engineering Department Japan Bank for International Cooperation 34th ADFIAP Annual Meeting April 20 to 23, 2011  Acapulco Beach Club & Resort Hotel, Kyrenia, North Cyprus Green Finance ~ Business Opportunities and Role of Financial Institutions

3. Source: IEEJ CO 2 emission reduction potential by using Japanese BAT (‘000 ton/Y ) Reduction Potential of Proven Technology （ Commercially Viable Best Available Technology) 1.5 Billion ton CO2 saving per year > 1.3 billion ton CO2 emission a year in Japan

4. Energy saving and CO2 reduction 18,410Kwh 120,000 ton/y (China, 5000ton X2 units) Cooling Tower PH Boiler Demineralizer building AQC Boiler Turbine / Generator Building Source Kawasaki Heat Recovery System of Cement Plant

5. Low Carbon Investment 0 200 400 600 800 1 000 1 200 2015 2020 2025 2030 Billion dollars (2008) Other Countries Other Major Economies OECD+

6. Financial Institutions Investors Investment Projects Affluent society Mission of Financial Institutions Mission of Financial Institutions Financial Institutions should support economic growth to realize affluent society under environment constraint. Balancing economy and environment is crucial.

7. Risk Mitigation Improve economic return Improve investment climate Role of Public Finance for Climate Change Mobilizing private funding is a key role Guarantee/Insurance Co-financing Low cost funding for co-financing Mezzanine Interest subsidies Policy dialogue for incentive/regulation Information service/business matching

8. Green Growth and Technology Cycle Green Growth R&D Investment Commercialization Economic Return Diffusion

9. “ Emission” or “Reduction”? Reductions Emission from invested projects Emission from invested projects Emission from Existent facilities

10. Green and ＬＩＦＥ ＬＩＦＥ ＧＲＥＥＮ Date March 2009 March 2010 Amount USD 5 billion (2years) USD 4 billion (3years) Eligible area ・ Clean Energy ・ Energy Efficiency ・ Water Infrastructure ・ Urban transportation JBIC reviews the followings 1. Climate change policy of the host country 2. Technology to be used 3. Reduction amount by J-MRV Remarks Japanese involvement is a precondition Government or financial institutions shall be borrower

11. ・ Scaling up low carbon investment ・“ simple, practical and internationally acceptable” guideline ・ Following investor’s decision-making process Baseline amounts = Emissions in the case without investment Option of Baseline a/ Actual emissions before investment, b/ Emissions from similar installations in operation in the country or in the region c/ Emissions from similar installations recently invested in the country or in the region Reduction amounts = Baseline emissions - Emissions from projects Taking into account: ・ investment climate such as economy, energy, technology, regulation. ・ availability and reliability of data Sampling and theoretical value may be applicable http://www.jbic.go.jp/en/about/news/2010/0730-01/100730_mrv_guideline.pdf J-MRV

14. Project Preparation Construction Project Implementation JBIC Retained Consultant Advisory Committee J-MRV For Financial Due Diligence Operation phase ( 1 year after commissioning) At Commissioning J-MRV Process

15. Structure of Green Credit Line J-MRV J-MRV Advisory Committee JBIC Retained Consultant Bank Project Finance Finance Data Data ( Planned and actual, Energy consumption, Power generation) Data CO2 reductions CO2 reductions Opinion Share of J-MRV CO2 reductions

16. Benefit of MRV for Financial Institutions Reputational benefit (CSR) Preparation for regulatory framework Better Funding Investment on the opportunities Future Carbon Market

17. Green Finance Alliance Voluntary Participation Sharing Good Practice MRV and Disclosure Message to Industry and Regulators New Market Mechanism

18. MRV as International Public Goods Finance Carbon Market Stake Holder Rating Industry Policy May, 2010 Cologne, Germany Dec, 2010 Cancun, Mexico June, 2010 Tokyo, Japan Nov, 2010 Siam Reap, Cambodia

19. Public Sector (Improvement of investment climate) Private Sector (Driving force) Financial Sector (Push last one mile) Capacity of Our Planet Change of Lifestyle Better investment climate, More investment Use of Technology Public Private Financial Partnership