70075 March 18–19, 2010 Manila, Philippines Asian Development Bank Headquarters Climate Investment Funds Asian Development Bank Inter-American Development Bank WORLD BANK GROUP March 18–19, 2010 Manila, Philippines Asian Development Bank Headquarters Proceedings of the Climate Investment Funds 2010 Partnership Forum March 18–19, 2010 Manila, Philippines Asian Development Bank Headquarters Production by Stakeholder Forum for a Sustainable Future in collaboration with the Climate Investment Funds Administrative Unit. Design by The Word Express, Inc. Photos by Francis Dejon, International Institute for Sustainable Development Earth Negotiations Bulletin (ENB). Thanks also to Leila Mead and the ENB team for their essential input. Climate Investment Funds Administrative Unit World Bank headquarters 1818 H Street NW, Washington DC 20433 www.climateinvestmentfunds.org  iii LIST OF ABBREVIATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . v INTRODUCTION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 Contents OPENING PLENARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Voices of Stakeholders: Looking Ahead for Lessons Learned in the Climate Investment Funds: Emerging Themes for Learning . . . 4 Voices of Stakeholders: Panel Discussion of CIF Stakeholders . . . . . . . . . 5 Voices of Stakeholders: Plenary Discussion . . . . . . . . . . . . . . . . . . . . . . . . 7 Session outcomes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 CIF PROGRAM SESSIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 Clean Technology Fund: Enabling Environment: Incentives, Consistency and Transparency . . . . . . . . . . . . . . . . . . . . 11 Session outcomes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 Forest Investment Program: Institutional Collaboration for REDD+ at the Country Level . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 FIP and scaling-up activities for REDD+ at the country level . . . . 17 Session outcomes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 Implementing the Pilot Program for Climate Resilience: Building Alliances for Climate Resilience . . . . . . . . . . . . . . . . . . . . . 20 Session outcomes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 Scaling Up Renewable Energy Program in Low Income Countries: Overcoming Barriers for Renewable Energy Deployment and Attracting Finance for Investments in Low Income Countries . . . . . 22 Understanding the challenges facing renewable energy scale-up in low income countries . . . . . . . . . . . . . . . . . . . . . . 23 Addressing renewable energy �nancing: new opportunities and success stories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 Session outcomes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 SYMPOSIUM ON CLIMATE SCIENCE AND TECHNOLOGY . . . 29 Energy Technology Roadmaps: Charting a Course for a Low Carbon Future . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 Carbon Benefits of Sustainable Land Management – Science, Technology and Economics of Modeling, Measurement and Monitoring . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 CLOSING PLENARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 Annex 1: Attendance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37 Annex 2: Survey Responses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39  v ADB CCS CDM Asian Development Bank Carbon capture and storage Clean Development Mechanism List of CIF CSO Climate Investment Funds Civil Society Organization Abbreviations CTF Clean Technology Fund DFID Department for International Development (United Kingdom) FAO Food and Agriculture Organization FCPF Forest Carbon Partnership Facility FIP Forest Investment Program GEF Global Environment Facility LULUCF Land use, land-use change and forestry MDBs Multilateral Development Banks MRV Measurable, Reliable, and Verifiable NGO Non-Governmental Organization PPCR Pilot Program for Climate Resilience R&D Research and Development REDD Reducing Emissions from Deforestation and Degradation REDD+ Expanding the scope of REDD to include forest restora- tion, rehabilitation, sustainable management and/or afforestation and reforestation SCF Strategic Climate Fund SREP Scaling Up Renewable Energy Program in Low Income Countries UK United Kingdom UN United Nations UN-REDD UN Collaborative Programme on Reducing Emissions from Deforestation and Forest Degradation in Developing Countries UNDP UN Development Programme UNEP UN Environment Programme WRI World Resources Institute  1 The second Climate Investment Funds (CIF) Partnership Forum took place at the Headquarters of the Asian Development Bank (ADB) in Manila, Phil- ippines, on March 18–19, 2010. The objective of the 2010 Partnership Fo- Introduction rum was to share lessons learned from the CIF design process and from early implementation of CIF-funded programs. The Forum was hosted by the ADB in cooperation with other multilateral development banks (MDBs). Over the two days approximately 400 partici- pants gathered at the Forum including representatives of the CIF stakeholder groups, which are: country governments, MDBs, United Nations (UN), Global Environment Facility (GEF), UN Framework Convention on Cli- mate Change (UNFCCC), Adaptation Fund, bilateral development agencies, civil society, indigenous peoples, private sector entities, and scientific and technical experts. The Forum aimed to provide an open, transparent and constructive platform for dialogue on knowledge gained to date and to extract practical lessons learned by which to inform further implementation of the CIF. In particular, the Partnership Forum aimed to provide an opportunity to share early imple- mentation lessons drawn from country-level activities of the Clean Technol- ogy Fund (CTF) and programs under the Strategic Climate Fund (SCF), particularly the Pilot Program on Climate Resilience (PPCR), the first SCF program to advance to implementation stage. The following is the agenda of the 2010 CIF partnership Forum. The pro- ceedings provide highlights of the presentations and discussions for each ses- sion. 2   •   P r o c e e d i n g s   o f   t h e   c l i m at e   i n v e s t m e n t   f u n d s THURSDAY, MARCH 18, 2010 8:30 – 9:30am Opening Plenary 9:30am – 1:00pm Plenary presentation: “Looking Ahead for Lessons Learned in the Climate Investment Funds: Emerging Themes for Learning� Professor James Radner, University of Toronto Voices of Stakeholders Dialogue – Reflections on Lessons Learned Plenary-level dialogue with stakeholder groups: NGOs, Private Sector, Indig- enous Peoples, Governments, UN and other groups 1:00 – 2:00pm Lunch 2:00 – 5:30pm CIF Program Sessions Clean Technology Fund Forest Investment Program Clean Technology Investment: Collaborating for REDD+: Creating an Enabling Environment The Forest Investment Program and and Ensuring Access to Financing its Partners at the Country Level 5:30pm Partnership Forum Reception Hosted by the Asian Development Bank FRIDAY, MARCH 19, 2010 9:00am – 12:45pm CIF Program Sessions Pilot Program for Climate Resilience Program for Scaling Up Building Alliances for Climate Renewable Energy in Low Resilience: Implementing the Pilot Income Countries Program for Climate Resilience 12:45 – 2:00pm Lunch 2:00 – 4:30pm Climate Science and Technology Update Symposium organized by UN Environment Programme (UNEP) 4:30 – 5:45pm Reports from Voices of Stakeholders and CIF Program Sessions Presentation by Rapporteurs of results from Voices of Stakeholder session and four program sessions (CTF, PPCR, FIP, SREP) 5:45 – 6:00pm Closing Plenary  3 The Opening Plenary, moderated by CIF Partnership Forum Co-Chair Katherine Sierra, World Bank Vice President for Sustainable Development, was addressed by Haruhiko Kuroda, President of the ADB, Heherson T. Al- Opening varez, Commissioner and Vice President of the Philippine National Climate Change Commission, and Preety Bandari, speaking on behalf of the UN Framework Convention on Climate Change (UNFCCC) Secretariat. Plenary Haruhiko Kuroda welcomed participants to Manila and the ADB. Noting the common concern of climate change, he said climate change will have im- pacts on the achievement of the Millennium Development Goals (MDGs). He commented that the climate challenge will require responses that are bold and carefully crafted, innovative, but acceptable and understood by those who will implement them. He further stressed that responses need to be technically sound but break knowledge barriers, and that they require strong wide-ranging and creative partnerships. He said the CIF Partnership Forum presents a vision how the work can embrace low carbon development paths around the world, stressing that Asia and the world have an opportunity to fundamentally restructure financial flows to development. He underscored the CIF’s unique features, in particular that the investment plans are led by the recipient countries and tied directly to national strategies. He said the CIF are an important piece of the finance puzzle, but only a single piece, and hopefully progress will be made in fundraising and the development of a global architecture on climate finance, among other issues on the road to Mexico. OPenInG Plenary. l-R: katherine sierra, Vice President, the World Bank group, in a conversation with CIF key speakers haruhiko kuroda, President, asian development Bank; heherson alvarez, Commissioner and Vice Chairman of the Philippine national Climate Change Commission and Preety Bandhari, UnFCCC. 4   •   P r o c e e d i n g s   o f   t h e   c l i m at e   i n v e s t m e n t   f u n d s Heherson T. Alvarez welcomed participants to Manila. Katherine Sierra outlined the various elements of the He said it was inspiring that public financing insti- CIF. She underscored that the CIF were designed to tutions are dealing with the issues of climate change. demonstrate how to build responses to climate change He noted that the Philippines was the recipient of by helping countries initiate transformation towards US$400 million CTF funding and the country was in low carbon and climate resilient development. She the process of preparing a framework for confronting noted that the Partnership Forum is a crucial element climate change that would instruct national responses in making this a reality. She said the CIF were con- to climate change. He said the magnitude of the prob- ceived as a unique mechanism, being a partnership lem presents a challenge to public finance institutions among the MDBs. She stressed that in the conceptu- and welcomed the Partnership Forum as a transforma- alization of the CIF, it had been very clear that mak- tional undertaking pursued by the ADB and the other ing them effective would require a balanced and broad MDBs. In conclusion he expressed hope for greater engagement across a range of stakeholders, with both and more fruitful partnerships in the future. the CTF and SCF having equal representation from developed and developing countries, and other non- Preety Bandari welcomed the Partnership Forum governmental bodies being represented as observers as one of the first gatherings to address the finance via a unique self-selection process. discussion since Copenhagen. She noted that while Copenhagen responded only partially to the high Noting that the CIF were entering the second year of expectations, it was a crucial event because it raised work, Sierra commented that the endorsement of four climate policy to the highest level, where it belongs, new CTF investment plans, bringing the total to thir- it advanced the negotiation on infrastructure for well- teen, has achieved a critical mass in the CTF for low functioning climate cooperation, and it narrowed carbon growth. In terms of the PPCR, she said nine options and clarified choices on key issues in the nego- countries and two regions are moving ahead to build tiations. She said the Copenhagen Accord was a clear climate resilience in their own development plans. letter of political intention to constrain carbon and Under the Forest Investment Program (FIP), she not- deal with climate change and also includes pledges for ed that five pilot countries have been endorsed and a short-term and long-term finance. She noted that in process has been approved for design of a special grant order for Parties to conclude with agreement in Mex- mechanism for indigenous peoples and local communi- ico the expectations and objectives need to be realistic ties. She said progress is being made on making the Pro- and take into account political realities, and should gram for Scaling Up Renewable Energy in Low Income focus on: clarifying the future of the Kyoto Protocol; Countries (SREP) fully operational, with financial encouraging clear leadership by industrialized coun- modalities and operational guidelines being developed. tries; and endorsing a fully operational architecture She highlighted the need to get the balance right be- that makes it possible for developing countries to act tween engaging the concerns of all stakeholders, captur- on climate change. She stressed the need for decisions ing knowledge, and embedding these lessons in project that could set in place a fully operational architecture action. She stressed the importance of sharing lessons to deliver on adaptation, mitigation, capacity build- with other countries on how to make climate resilient ing and technology transfer. She further stressed the and low carbon development a reality. She concluded by need for coherence and coordination among the mul- saying that the Partnership Forum is a keystone in the tiple climate finance mechanisms. quest for balance and scaling-up of knowledge, and the  oPening Plenary  •  5 role of participants was to listen and to learn from each other, share learning and identify the next steps. She finally noted that the outcomes of the Forum would be taken up by the various CIF governing bodies. VOICES OF STAKEHOLDERS Looking Ahead for Lessons Learned in the Climate Investment Funds: Emerging Themes for Learning The objective of the session was to share perspectives and experience about CIF design and early operation- alization, and to exchange ideas on how to use stake- holder experience in further advancing the work of the CIF. The session consisted of three components. First, James Radner, University of Toronto, said the CIF are a presentation was made by James Radner, University trying to do big things quickly, and that knowledge must be of Toronto, Canada, in which he outlined a summary “usable� for those working on climate and development. of a study he undertook on the lessons learned from CIF design and early activities. This was followed by a panel discussion, which was guided by short discus- vide climate resilience. Radner detailed how the CIF sion inputs from representatives from the Govern- emerged via a multi-stakeholder dialogue process and ments of the United Kingdom (UK) and South Africa were approved on July 1, 2008. and other stakeholders to reflect and discuss the key lessons from CIF design and early implementation. The presentation moved on to describe the basic func- This was then followed by an open discussion with tions of each of the funds and programs. The CTF’s stakeholders present at the Forum. Ann Quon, Prin- purpose is the demonstration, deployment and trans- cipal Director, ADB Department of External Rela- fer of low carbon technology through a multilateral tions, moderated the session. financing mechanism which can attract private invest- ment. The SCF encompasses three separate programs: In his presentation, Radner outlined the nature and 1) the PPCR, designed to build climate resilience into purpose of the CIF, specifically, that they are based development planning; 2) the FIP, designed to reduce on the recognition that climate change is also a de- emissions from forest degradation and deforestation; velopment issue and aim to build on the advantages and 3) the SREP, designed to demonstrate viability of MDBs working with countries for investment in of low carbon development pathways and increased development. He explained that the CIF serve as an energy access through renewable energy use in low- interim measure to plug an immediate financing gap income countries. and also display what can be achieved through scaled up financing. The CIF also provide an opportunity Radner went on to detail the background of the CIF’s for low carbon technology to be showcased and pro- governance approach. The decision-making bodies 6   •   P r o c e e d i n g s   o f   t h e   c l i m at e   i n v e s t m e n t   f u n d s are built around equal representation of contribu- tor and developing countries. The work is based on consensus-building and there is a self-selection pro- cess for observer representative seats on the gover- nance bodies. Radner talked about his learning experience and the goals he set himself in undertaking his study. His main aim was not to evaluate but to inquire, explore, create dialogue and learn lessons from the CIF to date that VoICes oF sTakeholdeRs dIalogUe Panel. can be used in the area of climate finance. His goal l-R: The session panel with Zaheer Fakir, south africa; Bhola in this process was to report back to stakeholders in Bhattarai, Federation of Community Forestry Users, nepal; Juan Carlos Jintiach, Coordinating Body for the Indigenous order for them to build on what he has learned. The organizations of the amazon Basin (CoICa); Vicky seymour, process is a cycle of feedback, interviews, meetings United kingdom; Barbara Black, World Business Council for sustainable development (WBCsd); smita nakhooda, World and discussion papers, which feeds back into itself. Resources Institute (WRI) and Warren evans, World Bank The two main messages that Radner wanted to relay and the consensus-based decision-making processes. to the audience were: ‘We are all in this together as However, he noted that the challenge of consensus is partners’; and ‘connect to the global via the local’. He ensuring a process that would manage to provide CIF stressed that it is important to engage with others to funding in a manner in which all countries feel as if explore common concerns and different perspectives they have the largest slice of the cake. He said one of and to try to harmonize those views. He also high- the main issues is addressing concerns regarding loans lighted the importance of making progress through and grants under the CIF. In terms of South Africa’s joint discovery and connecting with people in the CIF process, he said it was used as a vehicle to go be- CIF network who have relevant knowledge. In terms yond investment, not just in clean technology but in of connecting to the global via the local he explained stimulating downstream investments, green jobs and that the first step is to scope the global territory and green growth in small-scale businesses. understand a range of views, then look for clues on the ground as to what the reality is and bring the re- Bhola Bhattarai, Federation of Community Forestry sults to the regional and global forums. Users (FECOFUN), Nepal, expressed doubts regard- ing the CIF’s support to civil society and communities and noted that there was still a lack of clarity regarding VOICES OF STAKEHOLDERS the role of non-governmental organizations (NGOs) Panel Discussion of CIF Stakeholders in the CIF programs. He welcomed the process to dis- cuss the establishment of a special grant mechanism Following Radner’s presentation, Zaheer Fakir, South under the FIP, and expressed hope that this will be a Africa, welcomed the 2010 CIF Partnership Forum move ahead in favor of supporting local communities. as contributing to clarification of the notion that the He further noted that the CIF should focus on the CIF are a donor driven process. He said their unique- most vulnerable countries and ensure that the funds ness is based on the balanced governance structures are distributed equally.  oPening Plenary  •  7 Juan Carlos Jintiach, Coordinating Body for the In- Smita Nakhooda, World Resources Institute, under- digenous Organizations of the Amazon Basin (CO- scored the need for an honest conversation and dia- ICA), said the UN Declaration on the Rights of logue on the CIF in order to find solutions, based Indigenous Peoples should provide the basis for en- on the provision of transparency and inclusiveness. gagement, particularly with regard to prior informed She stressed that the CIF are setting a precedent on consent and consultation. He called for more oppor- the link between climate change and development tunities for indigenous communities to interact with and that the lessons learned are important for both MDBs. He stressed the importance of recognizing in- climate and development finance. She also stressed digenous peoples as part of the traditional forest man- the need for an ambitious interpretation of the Trust agement system, and underscored the importance of Fund policies. indigenous peoples’ participation at all levels. Warren Evans, Director, Environment Program, Vicky Seymour, UK Department for International World Bank, stressed that the CIF have approached Development (DFID), underscored the need to focus climate change as a development issue with the aim on continuous learning and said that the CIF can only of ensuring co-benefits for the development process. be judged to have been successful if they have a record He suggested that the CIF address their engagement of work on the ground, as well as being able to show with the UNFCCC processes, particularly in rela- what works and what does not work. She said the Part- tion to reach a final agreement on the post-2012 fi- nership Forum is not a means to an end, but a contin- nancial architecture. He suggested that the fast track uous process, and it is important that the Trust Fund money pledged under the Copenhagen Accord could Committees listen to the Forum and take the views benefit from the lessons of the CIF process, and simi- expressed by participants forward. She stressed that larly these lessons could inform the design of the Co- lessons learned must go beyond the CIF, and should penhagen Green Climate Fund. He also stressed the be replicated in any future climate financial architec- importance of learning lessons from the process to en- ture. She stressed the need to ensure wider stakeholder gage indigenous peoples in the CIF decision-making engagement in country and real-time feedback. process. He said the climate agenda has brought the MDBs together to work as a more effective collective. Barbara Black, World Business Council for Sustain- able Development (WBCSD), noted the importance of engaging the private sector in developing countries VOICES OF STAKEHOLDERS in the CIF process and stressed the need for the con- Plenary Discussion sistency of this engagement particularly in the coun- try investment plans. She suggested a discussion on a In response to Radner’s presentation and the panel precise definition of what it means to be an ‘active ob- discussion, the following key points were made in the server’ on the CIF Trust Fund Committees. She said plenary by participating stakeholders. there was a growing interest from the private sector, but said there were large knowledge gaps that disable Regarding the balance between mitigation and adap- their full engagement. On knowledge management tation, concerns were raised about the CIF focus on and learning, she noted that the private sector has lots mitigation rather than adaptation, where it was sug- of experiences that can be brought into the process. gested that larger and more urgent investment was 8   •   P r o c e e d i n g s   o f   t h e   c l i m at e   i n v e s t m e n t   f u n d s needed. It was noted that the issue of adaptation re- need for communities to be able to access the CIF, quires more engagement and it was suggested that the which would require a policy to ensure the equitable CIF could come up with early learning experiences, flow of funds to the local level. A point was raised particularly from the PPCR which is targeting ways about the need for clarity about which organizations of mainstreaming climate resilience into national de- would be able to access CIF funding, with some sug- velopment plans. It was noted that the challenge of gesting that regional bodies and trans-boundary or- including climate resilience in development is not just ganizations should also have access. It was also noted an adaptation issue per se. Governments would need that a means to ensure full country ownership rather to make investments in terms of the known impacts than specific ministry ownership was missing from of climate change. In this regard the approach to de- the CIF process, and that there was also a need for a velopment projects needs to be transformed in order real conversation among governments and non-gov- to take climate change into account. It was further ernmental bodies. noted that since knowledge about how to respond to climate change impacts is less advanced than mitiga- Regarding the relationship between the CIF and the tion knowledge, it is necessary to quickly understand GEF as the operating entity of the UNFCCC finan- what actions governments want to take. In this regard, cial mechanism, it was suggested that the CIF be the PPCR is working with governments and vulner- guided by the principles of the Convention, namely able countries to build climate change considerations that funding would be grants and concessional loans, into the development process and assess how much which is an option under the CIF. It was further not- money is needed to adapt. ed that grant finance is seen more through a devel- opment lens, and that CIF debates should reflect the The role of enabling relationships between the CIF, UNFCCC Party-based discussions regarding climate civil society organizations (CSOs) and other stake- finance. Concerns were also raised regarding the low holders was also addressed. Concerns were raised about level of ambition of the current emission reduction the need for a clear system to ensure community- pledges by developed countries under the Copenha- level and national-level engagement in the design of gen Accord. The lack of focus on issues of climate CIF projects in each recipient country. The need to justice, including the need to protect indigenous ensure that the CIF interventions lead to changes in peoples, was seen as a missing question in the debate. people and community behavioral patterns, particu- larly in relation to consumption and production, was Questions were also raised regarding the World Bank’s also raised. It was suggested that in order for this to role in climate finance. It was noted that the World happen, CIF investments need to be grounded at the Bank was trying to solve problems it helped create, local level and ensure maximum participation, own- particularly when it came to finance and policy related ership and active involvement. It was noted that the to the forestry sector and indigenous peoples’ liveli- current experience relates to country-by-country ex- hoods. It was stressed that CIF interventions were not amples, but that in future more dialogue could take being undone by the lack of coherence between the place at the regional level between governments and CIF and the policies of the MDBs. In this regard, it CSOs, and that such forums could also be an oppor- was noted that the MDBs see the sustainable develop- tunity for CIF countries to share their experiences ment and climate change agendas as the driving force with other countries. Discussions also focused on the for related financial investments. It was noted that in  oPening Plenary  •  9 the past energy investments were driven by the need low carbon technologies. It was noted, however, that in to increase access and reliability at the lowest cost and the design of the CTF it was decided to focus on specif- as a consequence many of these investments did not ic countries rather than a broader spread, and similarly adequately take into account different technologies, to do a smaller number of high impact projects rather particularly low carbon options. However, the current than many projects with limited impacts. It was gener- CIF investment plans aim to consider how to meet ally agreed that the future climate finance architecture the access and reliability issues in the most efficient would need to ensure a balance between middle and and clean manner, which is notable by the MDBs’ low income countries and their needs. increased spending on renewable energy and energy efficiency. Session outcomes JamaICan delegaTes hopeton Peterson and Vilma mcnish discussing session documents. In the closing plenary on Friday, March, 19, Patricia Bliss-Guest, Program Manager, CIF Administrative Unit, presented the following summary outcomes of On the choice of technologies, it was noted that the Voices of Stakeholders Dialogue which can fell many developing countries are still uncomfortable into five key areas: climate change as a development with addressing access and reliability issues using new issue; governance and inclusion; financing; CIF on technologies. It was suggested that the CIF govern- the ground; and learning and capacity development. ing bodies and technical committees discuss how to address more controversial technologies such as There was widespread recognition that climate change geo-engineering and ocean fertilization. The need to is a development issue for low income countries, par- address the impact on indigenous peoples of reduc- ticularly for countries such as the Small Island De- ing emissions from deforestation and forest degrada- veloping States (SIDS), and responding to climate tion (REDD) and REDD+ (expanding the scope of change is an issue of survival as well as of justice and REDD to include forest restoration, rehabilitation, equity. It was noted as critically important that the sustainable management and/or afforestation and re- CIF keep high standards in order to show what is pos- forestation) was highlighted. Issues related to the lack sible. The session also recommended that the MDBs of capacity in developing countries were also raised. It strive for coherence within their programs. It was sug- was also noted that the CIF process could draw on the gested that if the MDBs truly learn the lessons gen- upcoming UN Conference on Sustainable Develop- erated through the CIF, those lessons should inform ment, the so-called Rio+20 meeting, in particular by and change the MDBs’ regular portfolios. highlighting lessons learned in relation to the theme of the green economy. In relation to the issues of governance and inclu- sion, which had prompted a great deal of discussion Concern was raised that a number of low income coun- and different perspectives from the diverse group of tries could be left out of the CIF because of the eligibil- stakeholders, the CIF’s balanced governance struc- ity criteria, particularly with the CTF’s focus on middle tures and consensus-based decision-making processes income countries. It was therefore suggested that the were welcomed, and participants stressed that consen- CIF focus on how to ensure that finance flows to low sus requires compromise and cooperation. While civil income countries, particularly in relation to cleaner and society representatives recognized the opportunity to 1 0   •   P r o c e e d i n g s   o f   t h e   c l i m at e   i n v e s t m e n t   f u n d s express their voice in the deliberations, it was noted holders expressed the need to develop trust so that that there was still a great deal of uncertainty as to what CSOs and local communities are able to benefit from being an ‘active observer’ means in practice. The ses- the CIF funding as key stakeholders. They stressed sion also highlighted the need to ensure that gender that learning was best done through active participa- dimensions and issues be incorporated into the CIF tion and ownership, hence the need to engage CSOs governance and operations. Representatives of indig- and local communities. In that respect, there was also enous peoples’ organizations welcomed CIF efforts to the need to build the capacity of local communities to provide opportunities for transparent and real partner- address climate change. ships, which they stressed would require respect for the rights, cultural diversity and traditions of indigenous In reference to the topic of learning, stakeholders peoples. The session also highlighted the need to en- underscored the necessity for continuous learning sure that the private sector is more engaged in design throughout the process based on feedback and ideas and implementation. It was suggested that potential from a broad range of stakeholders, such as those tools to facilitate their involvement included increased gathered at the Forum and the CIF governing bod- formal consultations, meetings on specific themes, and ies, who should ensure that problems within the engagement of the private sector in country missions. system were identified, shared and resolved. It was again stressed that on-the-ground activities provide On the issue of financing, stakeholders had identified invaluable insight into the learning process and the two major themes in the discussions. First, the cur- CIF should seek to find the right incentives to pro- rent funds alone would not provide sufficient fund- mote stakeholder engagement, knowledge generation ing to achieve what was necessary. Second, the session and learning on-the-ground. Stakeholders had also identified the need to re-examine the use of loans in stressed the necessity for more effective and accessible climate financing, particularly as many developing communications, which should also enable country- countries feel that climate financing should only be to-country exchanges and region-to-region commu- in the form of grants. It was also noted that the goal nications. The session suggested that CIF lessons need of scaling-up in a limited number of pilot countries to feed into UN processes, including UNFCCC and has led to gaps in the number and type of countries the 2012 review of Agenda 21 and “green economy� covered by CIF programs. planning. Finally, it was recommended that learning inform the design of any future climate financial ar- With regard to the topic of the CIF on the ground, chitecture. which generated a lot of conversation, many stake-  11 CLEAN TECHNOLOGY FUND Enabling Environment: Incentives, Consistency and CIF Program Transparency The CIF Program Session on “Building Effective Private Sector Engagement Sessions in Clean Technology Investments: Creating an Enabling Environment and Ensuring Access to Financing,� took place in the afternoon on Thursday, March 18, 2010. CLean teChnOLOGY FUnD PaneL. L-r: Gary Pienaar, Institute for Democracy in africa; Jean-Pascal tranié, aloé Private equity Fund; Shilpa Patel, International Financel Corporation (IFC); Marcondes Moreilla de araujo, Brazil; and Frank Faas-Metz, Germany. The first session consisted of a panel presentation on the theme “Enabling Environment: Incentives, Consistency and Transparency.� Panelists included: Frank Fass-Metz, Head of Division, Environment and Sustainable Use of Natural Resources, Federal Ministry of Economic Cooperation and Develop- ment, Germany; Jean-Pascal Tranié, Co-Founder, Aloé Private Equity Fund, France; Marcondes Moreira de Araujo, Ministry of Science and Technology, Brazil; and Gary Pienaar, Senior researcher, IDASA, South Africa. The panel discussion focused on: the types of incentives governments could provide in terms of regulations, fiscal incentives, financial incentives such as tariff struc- ture, decoupling volume from price, technology requirements, feed-in-tariffs, and dispatching order; the consistency of government support in terms of clear rules, a coherent regulatory structure aligned with a low carbon strategy, consistency and durability; and dealing with transparency issues in a sector that is not fully regulated and is moving dynamically in technological innova- tions and financial products in terms of securing permits, bidding processes for developers/sponsors, transparent creation or change of rules. 1 2   •   P r o c e e d i n g s   o f   t h e   c l i m at e   i n v e s t m e n t   f u n d s Frank Fass-Metz outlined the key dimensions to en- ronment for meaningful stakeholder engagement for sure the participation of the private sector. He said shared learning and decision-making and a profitable that that while governments can provide certain investment environment. He identified the need for amounts of public resources to move forward with a clear policy environment, and said policy inconsis- clean technologies through development cooperation, tency was not conducive for long-term capital invest- in the end solutions will need the major participation ments. of the private sector. He stressed the need to engage with the private sector in investing in developing During the discussion, participants highlighted the countries. He said the CTF could support the mo- following key issues: bilization of private capital by addressing the overall regulatory environment, developing sectoral policies, Ç Concerns regarding attracting investors into and developing a framework for long-term stability to emerging areas, particularly issues related to the international and national investors. He stressed the scale of investments needed to move to low car- CTF’s role in raising awareness among investors, as bon pathways; well as showcasing opportunities, and supporting the Ç Capacity among investors to identify investment private sector to overcome knowledge barriers related opportunities in emerging markets; to investing in developing countries. Ç Having policy stability that sets market condi- tions, particularly related to regulatory conditions Marcondes Moreira de Araújo provided an overview and their enforcement; of Brazil’s climate change and renewable energy and Ç Having the necessary regulatory processes to science and technology policies. He said there was a support low carbon technologies, particularly in large opportunity for clean technologies, renewable countries that are predominantly reliant on fossil energies in a climate change framework that relates to fuels; social inclusion and poverty eradication. He said there Ç Assessing the costs of low carbon technologies, was room for the private sector to engage in the pro- particularly related to deployment, the high level cess via national business associations and federations. of tariffs, subsidies, externalities, regulator dilem- mas, and ensuring that the costs are reflected for Jean-Pascal Tranié identified a number of urgent mat- the consumer; ters that need to be addressed in terms of stimulating Ç Addressing the scale of low carbon technologies, growth in the private sector, such as those related to in terms of on-grid or off-grid approaches, par- human, regulatory and technical challenges. He said ticularly as it relates to rural and decentralized the sector is not growing fast enough and called for options; increased efforts to stimulate growth. He also indicat- Ç Clarifying the role of the MDBs in relation to ed that quality management and good technologies working with local banks and micro-finance are primary criteria for success in clean technology organizations to identify local investment op- investments. portunities, particularly in relation to emerging opportunities in the renewable energy sector. It Gary Pienaar outlined a national process to map the was noted that the MDBs have substantial experi- electricity sector in South Africa. He stressed that pol- ence with local banking sectors, as well as micro- icy and regulatory features provide an enabling envi- loans targeted at local homeowners, but that it  cif Program sessions    •  13 takes a while to develop these relationships and approaches. In this regard it was important to un- derstand how local banks could get involved in order to develop a range of sustainable products; Ç Addressing long term sustainability of invest- ments and projects, with the goal of ensuring that the end user benefits from investments, particu- larly in relation to localized societal benefits; Ç Ensuring that investments lead to the transforma- tion of consumption and production patterns at all levels, in particular at the level of the private sector; Ç Addressing behavioral changes by educating consumers to identify and recognize choices re- masaTsUgU asakaWa, Japan, stressed the need to garding low carbon technologies, noting the im- mobilize private financing to promote low carbon technologies portant role of small scale business; by providing incentives such as concessional loans. Ç Being realistic regarding the different role of the public and private sectors. It was noted that the private sector role is not to focus on providing Affairs, Japan; Ozgur Pehlivan, Deputy Director access in developing countries—where public General, General Directorate of Foreign Economic sector finance will play a bigger role—but rath- Relations, Under Secretary of Treasury, Turkey; Jean- er that the focus would be on middle income Pascal Tranié, Co-founder, Aloé Private Equity Fund, households rather than the more vulnerable sec- France; and Michael Gurin, CEO of Sol Xorce LLC, tors of society; USA. Panelists discussed the role of concessional fi- Ç Ensuring the value of country ownership in plans nance in addressing barriers and issues of real risks supported by the MDBs. Observations were and perceived risks, high cost for early entry, high cost made that some of the CIF-related investment financing associated with innovative technologies. plans are owned by only some parts of govern- Panelists also addressed the role of the CTF country ment, not the entire State and other stakeholders investment plans in effectively integrating financial in civil society, and often discussions do not go mechanisms used in developed countries and else- beyond the focal ministries involved in securing where in the world in building growing clean technol- investments; ogy investments. They also addressed the role of CTF Ç Addressing the urgent need to create more sus- financing in addressing these market failures. tainable energy markets in Africa, particularly in the absence of technical and regulatory capacity. Masatsugu Asakawa emphasized the importance of mobilizing private finance to popularize low carbon The second session consisted of a panel discussion on technologies. He said there was a need to establish a the theme “Access to Financing: Creating Financially solid framework for public finance to play a catalytic Sustainable Models.� Panelists included: Masatsugu role in developing sustainable economies. He said Asakawa, Deputy Vice Minister for International public finance can improve the returns on the basis of 1 4   •   P r o c e e d i n g s   o f   t h e   c l i m at e   i n v e s t m e n t   f u n d s concessional financing and thereby reduce the risks. Ç Reflecting country diversity and financial condi- In sum, if return is a problem, concessional or grant tions in the CTF process, particularly in relation money or risk sharing facilities might be a solution. to the country investment plans; He welcomed the role of the CTF in filling the gap, Ç Ensuring that country investment plans are leveraging public funding and mobilizing financing country-owned and based on existing national from private sector and other sources. development plans; Ç De-linking the economics of proposed projects Ozgur Pehlivan identified several market barriers for from the regulatory environment; clean technologies and renewable energies, such as Ç Addressing concerns that carbon credit/market lack of finance and proper knowledge of the technolo- mechanisms are not sufficient to cover the gap in gies, limited technical capacity to identify and process the transition from traditional fuels to low carbon projects, and high preparation costs. He said banks technologies; and investors often under-appreciate the benefits and Ç Ensuring more effective technology transfer to over-estimate the risks. He said the CTF should pro- recipient countries, particularly in relation to the vide an incentive for the first movers, combined with distinct role of public and private finance, as well a concessional track of finance needed to overcome as addressing local availability of resources; the market barriers. Ç Using concessional financing as an instrument to provide incentives for start-ups and early market Michael Gurin said the private sector would only fi- investors; nance viable technologies with a long track record. He Ç Addressing concerns that CTF investments do said private sector finance requires regulatory incen- not create an enabling environment or provide tives, and stressed the need to look at barriers from sufficient access to finance; technical and financial viewpoints. He noted that his Ç Addressing the need for secure and binding com- company has concentrated on solar thermal, which he mitments to public finance, rather than being re- stressed is more scalable and cost-effective. liant on the private sector; Ç Understanding that while the regulatory environ- Jean-Pascal Tranié emphasized that most development ment is important, it should not be the primary projects have been successful without strong regula- requirement for all low carbon technologies to at- tion, but stressed the importance of having some kind tract private sector investment and participation; of protection for the first movers and the importance Ç Developing differentiated methodologies to en- of positioning the technology within an appropriate sure technological interdependence locally and market context. nationally. During the discussion, participants highlighted the Session outcomes following key issues: In the closing plenary on Friday, March 19, Claudio Ç Ensuring the discussions present an opportunity Alatorre, Inter-American Development Bank (IDB), for recipient countries and MDBs to share reflec- presented the following summary outcomes of the tions on the process of designing the country in- CTF session on ‘Enabling Environment: Incentives, vestment plans and of addressing barriers; Consistency and Transparency’.  cif Program sessions    •  15 In relation to the need for a stable, predictable, en- FOREST INVESTMENT PROGRAM abling environment, he highlighted the following Institutional Collaboration for REDD+ at the recommendations: an adequate country-specific reg- Country Level ulatory framework; strong regulations for planning long-term investments; transparency in regulatory The CIF Program Session on ‘Institutional Collabo- procedures; a clear mandate and division of respon- ration for REDD+ at the Country Level’ took place sibilities; and adequate enforcement. With regard to on Thursday afternoon, March 18. Panelists included the need for multi-stakeholder buy-in for successful Werner Kornexl, FCPF World Bank, Kaveh Zahedi, program design, he highlighted the following recom- UN Environment Programme (UNEP), Gustavo mendations: private sector viewpoints and limitations Fonseco, GEF, Juan Carlos Jintiach, COICA, Hadi need to be considered; government buy-in; involve- Pasaribu, Indonesia, and Andreas Dahl-Jørgensen, ment of all relevant agencies/ministries; civil society Norway. The session sought to discuss two key areas: organizations should participate; and public engage- the challenges and opportunities for FIP to imple- ment needed for behavioral change. In relation to ment REDD+ at the country level; and the need to knowledge and capacity building, he highlighted the allow space for an exchange of ideas on FIP collabora- following recommendations: building the capacity tion for scaled up REDD+ initiatives. across all stakeholders (including ministries, techni- cians, financial institutions, industries, consumers); Andrea Kutter, CIF Administrative Unit, presented and making room for knowledge dissemination and an introduction to the Forest Investment Program. sharing, especially to private sector about opportuni- The session was moderated by Hosny El-Lakany, Uni- ties and incentives. On the use of country-appropriate versity of British Columbia. He stressed that REDD+ technologies, he highlighted the need to develop do- was gaining much international attention from gov- mestic research and development (R&D) capacities ernments and NGOs, and the coordination and col- and build up local supply chains, and training and laboration across forest financing mechanisms would domestic procurement. require an inclusive approach across all stakeholder groups. He asked participating stakeholders to tackle In relation to ensuring financial sustainability, he the question of how FIP activities might complement identified the need to kick-off interventions that re- other REDD+ efforts at the country level while maxi- move entry barriers and suggested that when there mizing partnerships and collaboration among all the are long-term additional costs (e.g. renewable energy various stakeholder groups. for electricity) the cost could be borne from: consum- ers (social impacts in low-income areas); government The session went on to introduce comments from Wer- subsidies; development assistance grants; and carbon ner Kornexl, World Bank, who drew attention to the credits. The stakeholder discussion had stressed that fact that the FIP has a lot of synergy and coherence with consumers in low income countries should not be the Forest Carbon Partnership Facility (FCPF) in con- made to bear the extra costs for renewable energy sup- tributing to readiness, capacity building and providing plies. Finally, on the CTF architecture, he stressed that enhanced carbon payments. As a multi-million dollar risk mitigation through CTF finance can overcome platform, the FCPF aims to identify opportunities to private sector investment barriers and stressed that reduce emissions and build institutional capacity and links to UNFCCC could enhance government buy-in. frameworks. The FCPF monitors the readiness phase 1 6   •   P r o c e e d i n g s   o f   t h e   c l i m at e   i n v e s t m e n t   f u n d s via a series of interrelated steps but overall looking at the possibilities of opportunities to reduce emissions under REDD+, and to build trust and confidence that is required to move forward. Thirty-seven countries are preparing themselves in this context, which is similar to the requirements for funding under the FIP. He cited an example from Indonesia where the readiness grant is already providing funds to help forest reserves. He noted that it would be important for the FCPF and the FIP to learn from one another wherever possible. Kaveh Zahedi provided an overview of the UN- REDD Programme, which is a collaborative pro- gram between the Food and Agriculture Organization gUsTaVo FonseCa, geF, suggested that FIP can (FAO), the UN Development Programme (UNDP) provide lessons to be learned with respect to: scaling up and UNEP and was established two years ago after the forest protection over a broad area; constraints to capacity building; possible impacts on the ground; and boosting Bali negotiations. He noted that there are now readi- private investments.. ness programs in nine pilot countries. The three major donors are Spain, Norway and Denmark. He went on to outline four key points relevant to the FIP invest- in Brazil, where a more robust regulatory framework ments and REDD+. First, comprehensive national was now under consideration. He went on to outline a strategies need to be formulated which are nationally number of areas whereby the FIP can provide insight. owned and devised through an inclusive and open First, increased financial investments mean that con- process. Second, it is critical that REDD+ is seen in servation efforts can be scaled-up across the entire for- a broader context and must include issues around de- est sector and thus encourage a wider integration into velopment, biodiversity and climate change. This will national sustainable development programs. Second, it require strong and mandated national bodies in order should be recognized that in many parts of the world to ensure the highest level of political support. Third, governance structures are weak and fragile, and the large scale investments will only be successful if the implementation stage will require time and capacity relevant groundwork has already been put in place. Fi- building. He also stressed that the public sector should nally, Zahedi noted that FIP investments are a natural not carry the financial burden alone, and wherever pos- second phase in the process, but will only be successful sible, the private sector needs to be enabled and incen- if pre-investment requirements, such as the removal of tivized. In conclusion, he noted that he would like to barriers to effectively address REDD+, are fully met. see strong links develop between the GEF and the FIP to reap multiple benefits for the forests and livelihoods. Gustavo Fonseco outlined that the GEF would be launching a new funding cycle in July 2010 to bring Juan Carlos Jintiach reiterated that REDD+ offers robust support for REDD in order to respond to the significant opportunities for collaboration with indig- real threats to global forests. He noted that there were enous peoples. He noted that there needs to be an en- already a number of forest programs underway, such as hanced understanding and recognition of indigenous  cif Program sessions    •  17 peoples’ rights, roles and knowledge, as they are the which integrates all forest functions including groups who have traditionally cared for forests as a water, biodiversity and land-use; natural resource. As such, the respect, recognition and Ç Requiring the need for greater levels of coordi- utilization of indigenous peoples is more important nation and collaboration within countries, par- than money alone. He praised indigenous peoples for ticularly in reference to different government their knowledge-sharing efforts and suggested that ministries working together; their traditional knowledge base may provide the key Ç Noting the need for transparency in financing for preserving forests in the future. and sharing benefits from REDD+, particularly among marginalized and indigenous communi- Hadi Pasaribu addressed the session by describing some ties who may have less access to information; of the lessons that he had learned from the Indonesian Ç Noting the need for sub-national coordination; experiences in sustainable management of forests in- Ç Recognizing the need for increased monitoring, cluding the need for delivery on education, conserva- tracking and leveraging private investments; tion and forest carbon stocks. He noted that for those Ç Requiring greater facilitation between the private countries where forest management systems have al- sector and other stakeholder groups, particularly ready been in place, the FIP can help to fill the gaps and indigenous peoples and local community groups; support activities that are effective on the ground, but Ç Supporting forest-based economic activities and noted that a key challenge was creation of channels by integrating smaller projects into a wider policy which available REDD+ funding could be effectively and implementation framework; absorbed and utilized. He stressed that the Indonesian Ç Recognizing the use of the FIP as a coherent na- experience has demonstrated the importance of coor- tional coordinating mechanism across the differ- dination among government bodies and with all rel- ent financing initiatives such as the UN-REDD evant stakeholder groups and he hoped that the lessons Programme and FCPF. learned so far could inform other countries’ efforts. Fip and scaling-up activities for redd+ A legitimate and transparent process was called for by at the country level Andreas Dahl-Jørgensen, Norway. He stressed that this process must include interested countries, civil The second session focused on scaling up activities society and indigenous peoples. for REDD+ at the national level. Panelists included Bhola Bhattarai, FECOFUN, Donald Kanak, World The session then split up into breakout sessions and Wildlife Fund (WWF), Thaís Linhares Juvenal, Brazil outlined a number of key challenges and opportuni- and Marco Antonio Fujihara, Key Associados. Mod- ties for implementing REDD+ at a country level: erator El-Lakany requested that all participants dis- cuss the ways by which FIP can leverage its efforts to Ç Recognizing the instrumental role that local com- promote additional activities from other sources for munities and indigenous peoples should have in scaled-up impact at the national level. all stages of the design and drafting of national FIP strategies; Bhola Bhattarai, FECOFUN, opened the discus- Ç Calling for a holistic and integrated REDD+ ap- sion by outlining his experiences of creating a multi- proach, and a clear understanding of REDD+ stakeholder forum on REDD+ in Nepal which had 1 8   •   P r o c e e d i n g s   o f   t h e   c l i m at e   i n v e s t m e n t   f u n d s change we are going to require more reliable and scaled up financing. He noted that they have already seen an appetite among private sector investors for forest in- vestment; however, since there is also hesitation due to the complexity of the issues and the existing mech- anisms, efforts are required to ensure collaboration among the different mechanisms, harmonize REDD+ readiness approaches, and match country needs with appropriate funding initiatives. He stressed that insti- tutional investors require certainty in demand; how- ever, in this period that still involves uncertainty, there are alternative structures to encourage private sector investments such as loan guarantees and insurance mechanisms that should be considered. Thaís Linhares Juvenal, Brazil, reminded stakeholders Thaís lInhaRes JUVenal, Brazil, said achieving the that REDD+ aims to support sustainable forest man- diverse objectives of Redd+ requires different forms of funds agement, reduce deforestation, conserve forests and and financial instruments, and proposed that the FIP can play a fundamental role in blending public and private funds. enhance carbon stocks, all of which involve different objectives and will require different financial schemes. Brazil has had some recent success in reducing de- brought together representatives from the private sec- forestation but is only now developing a REDD+ tor, government and civil society. He noted that his strategy that aims to bring together the national and organization had needed to develop sufficient capac- sub-national approaches, improve monitoring and ity to ensure collaboration and trust between different measuring mechanisms, and consolidate forest man- institutions and stakeholders, and to support indige- agement approaches. Finally, she noted that achieving nous peoples in organizing themselves so that they are the varied objectives of REDD+ will require different better equipped to participate in the FIP process. He forms of funds and financial instruments. also stressed that the most important aspect of imple- menting a REDD+ initiative in the context of a coun- Marco Antonio Fujihara, Key Associados, outlined a try such as Nepal was to ensure that the community number of challenges for leveraging private sector in- forest managers, who are the carers and the protectors vestments, including the lack of rules and regulations of forests, can better understand the conversations be- for REDD+ investments at both the national and in- ing held at the global level on how to preserve their ternational levels; the lack of protocols for monitoring own resource base. and measuring forest cover; and the difficulties asso- ciated with public-private-partnerships particularly Donald Kanak, WWF, outlined that the FIP mecha- with the many risks involved in forest investment. nism should be seen in transformational and holistic terms. It will involve social, political, economic and In response to the panel discussions, a number of environmental change. In order to affect the scale of points were raised by participating stakeholders refer-  cif Program sessions    •  19 ring to the challenges and opportunities for scaling sions on the FIP, which he noted had produced a very up REDD+. The UN-REDD Programme asked how lively discussion among all participating stakeholders to ensure that major investments from the FIP would and had gathered momentum due to the FIP Sub- not crowd out the private sector or subsidize invest- Committee having approved the process for moving ments that would have taken place regardless. On this forward with five countries and a further six reserve point, Juvenal stated that the crowding out of the pri- countries (still to be identified). vate sector was not an issue in Brazil due to the lack of private sector involvement in its native forests. One First, the discussions had demonstrated the critical participant raised the question as to whether Nepal need for collaboration at the national level. REDD+ had integrated climate change concerns into com- was seen as a source of collaboration and inclusive- munity forestry and included monitoring indicators ness which would help to fit each country’s existing for these projects. In response, it was noted that the policy structures, plans and institutional arrange- aim of implementing REDD+ into community for- ments. Stakeholders had also highlighted the com- estry issues was to enhance forests, but also to help parative advantages of learning from partners who local communities develop and generate their own are already active on the ground. In reference to the democratic institutions. A further question was raised five countries that have now been selected for sup- from the floor to determine how REDD+ would be port under the FIP, it was stressed that a cohesive, implemented in forest land that was already consider- country-owned planning process was necessary. This ably degraded given that it was much less likely that may take some time, as few expect the FIP to move the private sector would be willing to invest in such forward as swiftly as the CTF. The particular role of areas. In response, it was stressed that such scenarios indigenous peoples was recognized at several points were already in existence and it was critical that we and there was a call for the FIP to create a conflict identify new methodologies and techniques to ensure resolution mechanism to ensure that all voices are that degraded forests are also attractive for invest- heard and grievances can be brought to light. In ref- ments, which will require the active involvement of erence to the role of partnerships, it was stressed that communities and indigenous peoples. Panelist Ju- the FCPF, the UN-REDD Programme, bilateral and venal commented that although conversion projects multilateral donors and work under the voluntary are attractive to investment, the opportunity costs of carbon market will all need to be brought together to conversion should also be considered. She also sug- exchange information. Finally, the need for enhanced gested that payments should be made for units of car- levels of south-south cooperation and communica- bon stocks instead of units of emission reductions. A tion were noted. representative from Haiti raised the issue that small island countries, which often have a very high forest The second key area raised by stakeholders was the cover, are struggling to generate investments to pre- area of resources and financing. Stakeholders noted serve their natural resources. the need for strengthening the links between forest issues and climate politics, especially with regard to Session outcomes newer issues such as land-use change. Stakeholders also emphasized that there is need for greater clarity On Friday, March 19, David McCauley, ADB, pre- and less complexity regarding the role of the private sented the key points to have emerged from the ses- sector in order to attract financing. Participants ac- 2 0   •   P r o c e e d i n g s   o f   t h e   c l i m at e   i n v e s t m e n t   f u n d s knowledged that the private sector already engages in forest investments and there are a number of ways in which they can be further incentivized to bring new resources to the table, either through equity invest- ments or through providing direct financing in public- private partnerships. Finally, it was reiterated that the private sector still required greater stability and clarity in terms of the rules, which are still being developed under the UNFCCC process. Participants broke into small group discussions to share experiences and lessons learned on alliances for transformational change and climate resilient development IMPLEMENTING THE PILOT PROGRAM FOR CLIMATE RESILIENCE Building Alliances for Climate Resilience Daniele Ponzi, ADB, noted the emerging viewpoint that climate adaptation strategies are often multi- This session took place on Friday morning, March sectoral and that inter-ministerial coordination is 19, with the objectives of exchanging ideas on build- necessary to ensure comprehensive adaptation strate- ing partnerships and alliances for climate resilient gies. He stressed the importance of building on and activities and discussing issues on mainstreaming reinforcing existing institutions and processes such as climate resilience in national development strategies. National Adaptation Programs of Action (NAPAs), The session, moderated by Habiba Gitay, World Bank and the involvement of finance and planning minis- Institute, consisted of an introduction to the PPCR, tries to support effective mainstreaming. He stressed a panel discussion on building alliances for climate the importance of ensuring the integration of PPCR resilience, an audience dialogue, group discussions on with Disaster Risk Management and welcomed the integrating climate resilience in national development involvement and engagement of CSOs as a positive strategies, and a summary and wrap-up session. Pan- movement for the PPCR process. He underscored the elists included Daniele Ponzi, ADB, Neranda Mau- need to increase engagement with women and other rice, St. Lucia, Ilhomjon Rajabov, Tajikistan Climate vulnerable groups as well as private sector. He stressed Change Centre, Essam Nada, Arab Network for En- the need for better donor coordination on climate vironment and Development, Joyce Yu, UNDP, and change adaptation in the PPCR to avoid government Ancha Srinivasan, ADB. The panel discussion on fatigue. He said the level of transformation achieved ‘Building Alliances for Climate Resilience’ focused would be a measure of success. on four key questions: How can different stakehold- ers engage in the PPCR process? What are the op- Neranda Maurice, St. Lucia, outlined the process portunities and challenges? Is the PPCR different to undertaken to consult stakeholders on the PPCR other processes dealing with climate resilience or ad- country investment strategy. She said the process was aptation? Should it be different? Following the panel multi-sectoral and carried out under the auspices of discussion, participants broke into smaller groups of the national climate change committee. She noted 10 and engaged in focused discussions on issues raised that the process allowed St. Lucia to influence the by the panelists. global climate challenge with local concerns felt by  cif Program sessions    •  21 people on the ground. She said they aimed to ensure that their climate response was nationally owned and addressed the needs of the vulnerable, such as wom- en, youth and the poor. She stressed that the process provided an opportunity to identify priority projects and address critical issues of PPCR pilot countries, as well as the needs of the region. In this regard, she highlighted the importance of hydrological monitor- ing, community level water monitoring, coastal zone issues, forestry and deforestation, and health and dis- ease monitoring systems. She underscored the need to align the PPCR with other priorities and programs on the ground and ensure linkages rather than dis- jointed parallel programs. In relation to challenges of implementing a regional project, she noted that coun- tries have different levels of preparedness and capac- ity and stressed the need to get to an equal baseline. neranda maurice, st. lucia She voiced concern regarding the PPCR concessional loan modality, saying that it raises issues with the UN- Essam Nada, Arab Network for Environment and FCCC process. Development, provided an overview of work done by the Network to build alliances and partnerships and Ilhomjon Rajabov, Tajikistan Climate Change Cen- stressed their convening power to bring stakehold- tre, welcomed the opportunity provided by the PPCR ers together. Michael Schwarz, Swiss Re, provided platform to share challenges and concerns regarding an overview of public sector risk transfer solutions climate change adaptation. He outlined the process to and application of a systematic risk management ap- develop Tajikistan’s investment strategy. He empha- proach. He noted the need to identify and assess risks, sized the need for participative and inclusive processes followed up by systematic risk mapping and the de- and noted that the PPCR is about applying a climate sign of prevention, mitigation and adaptation strat- lens to what we are doing in our countries, with the egies. He said that that public-private partnerships aim of understanding in-country vulnerability. He (PPPs) in risk management can provide innovative stressed the important role of scientists and national instruments to better absorb the financial risk. experts in order to provide the science basis on which decisions need to be made. He further noted the role Kenzo Ikeda, Japan International Cooperation Agen- of the MDBs in providing help to access and lever- cy (JICA), provided an overview of JICA’s bilateral age funds and stressed the role of stakeholders work experience in the Philippines. He stressed the impor- together in partnership to address priority needs tance of donors providing vulnerability assistance and and program priorities. He emphasized following a mainstreaming climate into development strategies. “learning-by-doing� approach and said it was crucial He said JICA was working to complement other do- to overcome institutional barriers that may hinder nor and national stakeholders at the national level on successful adaptation. climate adaptation. 2 2   •   P r o c e e d i n g s   o f   t h e   c l i m at e   i n v e s t m e n t   f u n d s Joyce Yu, UNDP, outlined UNDP’s work at the coun- reported that the focus of their discussions was on try level, coming together as country teams and con- how to engage youth in the CIF processes. Their dis- ducting stock-taking exercises drawing on the UN’s cussions stressed the need for youth to be active par- in-country assistance framework (UN Development ticipants in the PPCR and identified the youth sector Assistance Framework (UNDAF)). She said the UN as one of the major stakeholders. They expressed con- system was involved in adaptation before the creation cern that the youth voice and role had been missing of the PPCR, and concluded that the PPCR should in the Partnership Forum deliberations. The group therefore draw upon the UN system’s adaptation underscored the importance of using existing youth work and lessons learned from the development pro- networks to broaden the consultation process around cess under the UN. She stressed the need for deeper, the country and regional investment plans. They also longer-term consultation and bringing stakeholders stressed the need to engage youth representatives from in as part of the design of the country strategies. She beyond the education system, as well as incorporating suggested the creation of consultative markers for the climate change and adaptation response into school PPCR as a more formalized manner for addressing curricula. The group further urged creating spaces for stakeholder consultation. She said it would be useful young people in decision-making, and noted that this should move beyond a symbolic arrangement to en- PPCR. essam nada, civil society and ngo representative sure a clear and real role for youth and children. to use national MDG targets to inform the MRV for The second group reported that the focus of their dis- the PPCR. She highlighted the need to ensure sustain- cussion was on coordinating mechanisms and creat- ability, which she said related directly to the adaptive ing alliances, in particular creating partnerships and capacity of institutions across the board, and stressed overcoming barriers in relation to climate resilient de- the need to build economies beyond subsistence. She velopment. They stressed the need to create national expressed hope that the PPCR could also be an insti- alliances with the involvement of grassroots actors, as tutional strengthening mechanism. well as addressing the role of women and youth in building climate resilience. They further stressed that Ancha Srinivasan, ADB, said the PPCR would bring funding should be considered for these national alli- many opportunities but these would only be realized if ances. They noted the importance of strengthening these activities build on strengthened institutions. He existing institutions in order to ensure that the PPCR said the MDBs’ relationship with finance ministries can work in synergy to build resilience. Finally, they would be an important catalyst for climate and devel- suggested further discussions on the need to further opment, and underscored the important role of the define climate resilience. PPCR in bringing the private sector into a more effec- tive adaptation role. He said the PPCR and CIF pro- The third group reported that their deliberations vide a good model for cooperation in any new financial focused on bringing existing institutions together. mechanisms under the UNFCCC and would help en- They underscored the importance of building trust able more effective global learning and networking. with the community and ensuring their sustainable engagement in the process. They suggested that lo- Following the break-out session, several groups were cal action plans would be a useful start or basis to asked to report on the deliberations. The first group scale-up the mainstreaming of local community par-  cif Program sessions    •  23 ticipation. They also identified the need to ensure the underscored the need for certainty in relation to the involvement of high-level leadership such as ministe- allocation of resources for pilot countries, particularly rial bodies. in relation to the need for planning. In relation to regional allocations, the session identified the need The fourth group said their deliberations focused to clarify how the allocation between countries and on how to engage the private sector and create more regions was being managed. It was suggested that awareness around the PPCR. It was noted that the guidance and clarity on this issue was needed. On ac- private sector often speaks a different language to cess to PPCR funding by local governments and com- other stakeholders and that this should be reflected munities, the session identified the need for a better in efforts to improve the PPCR’s relationship with the understanding of how financing could flow to the na- private sector. The group noted their discussion relat- tional and sub-national levels. Finally, in relation to ing to regulatory interventions and asked whether cli- effective communication of PPCR, the session high- mate change legislation would help the private sector lighted the need for the MDBs and donors to improve engage in climate finance discussion and investments. their communication related to the PPCR’s objectives They also noted the need to address climate related and activities, particularly to governments and other insurance issues. stakeholders. The final group reported on the discussion related In relation to the overarching theme of national level to engaging NGOs in the PPCR. They highlighted issues, the session identified three key issues: data col- the importance of early engagement as well as en- lection for baseline; institutional strengthening; and gagement at the highest level, such as participation clearer understanding of climate resilient develop- on national climate change committees. They noted ment. On data collection, the session noted that since the need to address issues of selection and legitimacy reliable data is often lacking, this component needs and stressed the importance of national NGO coor- to be part of the PPCR process. On institutional dination. Finally, they questioned whether issues of strengthening, it was suggested that climate relevant engagement would be better dealt with at the local issues should be part of the school and other educa- authority or national level. tional institutions’ curriculum. In relation to gaining a clearer understanding of climate resilient develop- Session outcomes ment, the session suggested further discussions and a deeper understanding of what climate resilient devel- In the closing plenary on Friday, March 19, Joyce opment means for an economy. Thomas-Peters, Grenada, presented the following summary outcomes of the PPCR session that focused On the overarching theme of how to build alliances, on ‘Building Alliances for Climate Resilience’. the session identified six key issues: engaging various stakeholders early in the process and in decision mak- Regarding financing issues, the session highlighted ing; using existing networks and plans and creating a concerns related to finance being provided as loans platform for ongoing engagement; providing incen- rather than grants, with participants expressing con- tives and facilitating key networks to work together; cern regarding loans being used as the basis of finance re-establishing or developing trust and respect for ac- adaptation and climate resilience. The session also tive engagement; recognizing that governments have 2 4   •   P r o c e e d i n g s   o f   t h e   c l i m at e   i n v e s t m e n t   f u n d s a major role to play; and building several alliances Brigitte Cuendet, SREP Sub-Committee member and rather than one big alliance. In relation to using exist- Co-Chair from Switzerland, provided an overview of ing networks and plans and creating a platform for the SREP. She noted that when we think of climate ongoing engagement, the session stressed the need to change we too often think of developed countries engage with community-based organizations, the pri- and large emitters and of preparing vulnerable com- vate sector, schools, youth and social networks. On re- munities for the effects of climate change. She indi- establishing or developing trust and respect for active cated that we require a shift in thinking so that we engagement, the session identified the need to share can also focus on the energy requirements of develop- and accept the specific terms, values, languages and ing and low income countries who need to raise their approaches of different stakeholders, particularly if energy output to meet the demands of their growing there was to be a shared and common understanding. populations. She noted a number of common stum- Finally, the session underscored the major role gov- bling blocks, including weak enabling environments, ernments have to play in terms of actively engaging a lack of capital, and the need to engage the public different stakeholders in the agenda setting process, and the private sectors. She noted that the purpose of as well as facilitating dialogue and understating more the SREP was to help address and partially overcome fully the roles of different stakeholders. these challenges by creating new economic opportuni- ties and provide reliability. Institutionally, the SREP is committed to taking a country-centric approach to be SCALING UP RENEWABLE ENERGY integrated into national development plans and target PROGRAM IN LOW INCOME COUNTRIES proven technologies such as wind, solar, small hydro, Overcoming Barriers for Renewable Energy biomass, and geothermal. She also stressed that com- Deployment and Attracting Finance for munity services such health, education and communi- Investments in Low Income Countries cation will also be significant. The SREP will aim to build on the experiences from pilot countries and was The CIF Program Session ‘Overcoming barriers for currently reviewing others for the programme. renewable energy deployment and attracting finance for investments in low income countries’ took place Understanding the challenges facing on Friday morning, March 19. It sought to identify renewable energy scale-up in low and understand the challenges facing large scale de- income countries ployment of renewable energy technologies at the country level and to identify success stories and new Anthony K. Ng’eno, Winafrique Technologies Limit- opportunities for addressing renewable energy financ- ed, provided an overview of some of the challenges for ing. Panelists included Anthony K. Ng’engo, Win- the role of the private sector in scaling up renewable afrique Technologies Limited, Naceur Hammanmi, energy supplies in low income countries. He pointed Rwanda, Elsia Paz, Honduras, Jesus T. Tamung, the to a lack of skills and awareness among key practi- Philippines and Takao Shiraishi, Newjec Inc. The ses- tioners, such as engineers, who are more accustomed sion was moderated by Bart Edes, ADB who asked to dealing with traditional technology. He also noted that panelists describe their experiences, and any chal- that designing systems based on cost is a challenge, as lenges or obstacles encountered, in promoting renew- if you compromise on a single component you risk able energy on the national level. compromising the entire system.  cif Program sessions    •  25 Naceur Hammami, Rwanda, identified several ele- ments needed for successfully scaling up renewable en- ergy, including a regulatory framework that supports development and investment, incentivizing the private sector and availability of sufficient levels of financing. Elsia Paz, Honduras, pointed out that civil society can help to remove some of the major barriers and ob- stacles to renewable technologies. She noted that the demand for energy in low income countries is so great that it was natural for the market to seek to meet that demand with short term but high yield fossil fuels. Furthermore, in some regions, such as South Amer- ica, renewable technologies have a poor reputation due to examples whereby projects have not been fully or correctly implemented, thus leaving local commu- nities with irregular and inadequate energy supplies. elsIa PaZ, honduran Renewable energy association for Paz noted that South America had witnessed a growth small scale Projects and a diversification of energy supplies into wind, so- lar and biomass, but it is not living up to the potential plies. He underlined the point that electricity must that it has as a region. This can partly be attributed remain affordable. He also noted that financing re- to governance problems and corruption, and as such, mains a critical concern for all organizations, compa- the MDBs could potentially play an important role nies, institutions and CSOs. in providing seed money and helping to put in place appropriate financial mechanisms. Takao Shiraishi, Newjec Inc., briefly outlined his ex- periences working with a member company of the E8, Jesus T. Tamang, the Philippines, discussed the fact an NGO working with energy companies developing that moving away from a dependence on oil was one renewable energy supplies. He noted that it was not of the top priorities for the Department of Energy sustainable to rely only on the skills and expertise of in the Philippines and they are now the world’s sec- technicians from abroad. He stressed the importance ond largest consumer of geothermal energy. A num- of capacity building in developing countries, pointing ber of lessons can be drawn from their experiences, out that indigenous communities and local commu- including, among other things, the involvement of nities often lack the skills to maintain the technology local communities in the maintenance, ownership, and do not have the channels to acquire the neces- and operation of energy facilities, the need for capac- sary skills. Local NGOs should provide a key role in ity building among local stakeholders, the need for the capacity development of communities and local strong legal frameworks, the necessity of feed in tar- populations. He went on to stress that another of his iffs, the importance of incentives for private sector major concerns regarded the price of energy in low in- investment, and the role that households and compa- come countries, particularly in rural areas. Finally, he nies could play in developing renewable energy sup- noted that as renewable energy technology becomes 2 6   •   P r o c e e d i n g s   o f   t h e   c l i m at e   i n v e s t m e n t   f u n d s more widely available, it is likely that it will become green technologies because of the many conditions more affordable. He cited the example of Japan, where attached. He asked the panelists how we might be construction costs of solar energy have decreased to able to move from loans to grants for poorer nations. US$4,000 per kilowatt of capacity. Shiraishi responded that, in his belief, the answer will lie in large scale private sector investments by a sin- In response to a question by the World Harmony gle company that covers both rural and urban areas. Foundation about the impact of tropical storms on the Ng’engo noted that in the case of his company in development of renewable energy in the Philippines, Kenya they had had some success in attracting private Tamang noted that natural hazards can prove very sector investments. Paz argued that the public sector damaging, and tropical storms appear to have risen in will need to play a bigger role than private companies number and intensity. He explained that the Philip- in countries like Nicaragua if they are to progress due pines now has wind farms in place but storms could to the fact that the private sector is primarily motivat- also disrupt these energy supplies. He also noted that ed by profit. She suggested that governments backed they are currently drawing up two service contracts by grants from international institutions may provide for ocean power, but exactly how the technology will the way forward. function is still uncertain. Such factors impinge on the nation’s ability to develop renewable energy supplies. The representative from Tanzania asked the panelists if UNEP asked the panel if they believed the SREP can the cost of renewables should be considered a barrier in be used for demonstrations to attract private sector light of the fact that the environmental costs of fossil investments, particularly in reference to the need to fuels are so much greater. In response, Ng’engo con- remove barriers and create an enabling environment. ceded that we have yet to have achieved a level playing Ng’engo noted that in Kenya demonstrations of new field in terms of renewable technologies. Policy devel- technology are key to encouraging investments. Paz opment should try to take into consideration the ‘inter- stressed that existing models should be recognized nalization of externalities’, meaning that the economics and governments should not waste time reinventing of supplying energy do not yet take into consideration successful green technology projects that already exist environmental damage, climate change and health im- in the region. She cited Costa Rica as a good example pacts. Paz noted that in Latin America they have begun of a country that has invested in renewable sources of to take into consideration the environmental impacts energy and today 90% of their supplies come from in the decision-making process. Tamang explained hydropower. Such examples should provide a useful that in the Philippines they have a one-grid one-price model for the region. Tamang noted that between policy so energy from renewable sources is the same 2008 and 2028 the Philippines will be attempting to price as energy from traditional sources. They have double its renewable energy production capacity from also implemented a priority dispatch system whereby 5,300 to 10,600 megawatts. energy is drawn from the renewable sources wherever available. Shiraishi responded with the comment that The representative from Nicaragua asked the panel- the Clean Development Mechanism (CDM) is a good ists what kind of financial sources they had in mind mechanism to encourage private sector investment in when discussing financial barriers. He mentioned renewable energy projects but it can depend on size, that Nicaragua has not been able to generate fund- and that smaller projects can prove difficult to make ing from the international community to develop commercially viable. He noted that feed-in tariffs are  cif Program sessions    •  27 very useful but that their effectiveness can differ be- financing does not just mean funds for technology tween developed and developing countries. In particu- but it also means resources for capacity building, de- lar, in developing countries it is critical to ensure that veloping policy frameworks in low income countries, the tariffs are priced correctly. stimulating local markets and promoting end-user access to technologies. He noted that the financing Addressing renewable energy financing: of technology development required partnerships New opportunities and success stories across the public and private sectors. He noted that governments need to be sensitized to the issues and The next session focused on renewable energy and convinced of the merit of providing some contribu- financing. Panelists included Georg Grüner, KfW tion. For example, in Nepal the government is sub- Banking Group, Govind Raj Pokharel, SNV Nether- sidizing 14% of the financial investments required lands Development Organization, Donald Morales, for solar energy systems. He stressed that it was also Nicaragua, and Ambachew Fekadeneh Admassie , important to provide incentives to commercial banks Ethan Biofuels and Carbon Finance Working Group. to reduce interest rates. Finally, he emphasized the im- Bart Edes, moderator for the session, invited panelists portance of capacity building among both the private to comment on how the SREP can be used to leverage sector and civil society. He cited the example of Paki- additional co-financing. stan, which now has the potential to supply 5 million homes with biogas, but is struggling to convince the Georg Grüner, KfW Banking Group, noted the key public of its benefits. Thus, investment in longer term challenge was to move from testing pilots to a systematic capacity building is essential to ensuring sustainable approach towards implementation. He described how patterns of energy supply and demand. the KfW Banking Group could provide some positive experiences from their projects in Germany where they The next question was directed at Donald Morales, have been financing renewable energy projects for al- Nicaragua, regarding the approaches Nicaragua had most two decades. In less developed countries they have adopted in order to deploy renewable energies. Mo- also been looking at off-grid renewable energy sources as rales explained that the country was undergoing a access to clean energy technology is so critical. Grüner transition because until 2007 the government had asserted that it requires innovative institutional frame- shown little interest in renewable energy sources, and works and not just innovative technology to deliver re- the population had become accustomed to blackouts newable energy solutions. He went on to stress that, in and energy rationing as the government and the pri- particular, rural areas require huge investments in in- vate sector so rarely invested in energy plants. The frastructure development and distribution channels in national development plan had now diversified and order to make investments more attractive to private included investments in renewable energy supplies. investors. He highlighted the possibility of setting up Nicaragua has the potential to produce 2000 mega- viable business models for the private sector and aggre- watts of hydropower energy even though they are cur- gating demand to allow for private sector investors. rently only using 100 megawatts. He noted that the chief concerns were to ensure that the population had Govind Raj Pokharel, SNV Netherlands Develop- reliable access to energy, and also to change the bal- ment Organization, addressed decentralized and ance of the energy matrix so that they could become small-scale renewable energy solutions. He noted that less dependent on oil. He stressed that energy efficien- 2 8   •   P r o c e e d i n g s   o f   t h e   c l i m at e   i n v e s t m e n t   f u n d s cy can also help a nation and its businesses become more financially competitive. Another question, directed to Ambacheew Fekan- deneh Admassie, queried what measures Ethiopia had adopted to help leverage private sector investment and what kind of incentives and motivations were required to boost investment. Admassie responded by saying that the most important factor, as with any investment, is to ensure an enabling environment which would always be specific to any given country. He stressed that ‘no-one-size-fits-all’, thus programs under the SREP will need to be custom made to ad- dress very specific scenarios. He also mentioned that the financial instruments available under the SREP should be made available for public and private ven- tures without discrimination. The use of other funds or programs to address renewable energy issues, such geoRg gRüneR, kFW Banking group as using the PPCR to address both energy access and climate resilience, was also suggested. ing developing nations, such as concessional loans or guarantee structures, particularly in view that for many The next question, directed to George Grüner, re- MDBs anything short of grants would not be consid- garded the role that concessional financing from bi- ered feasible. The World Resources Institute (WRI) lateral and multilateral development agencies should raised the issue that many low income countries faced play. Grüner provided an example of a program in when trying to simultaneously combat climate change Nepal which aimed to provide biogas plants in rural and address energy access, stressing that the SREP areas designed specifically for households. With the was in a strong position to try and combat some of assistance of KfW’s additional investment to cover the these issues. It was also emphasized that there are a upfront subsidies, the program was scaled up. Such number of community-based energy projects already grants can help make a transition from public subsidy in existence from which lessons could be learned. In to private finance. response, the panelist Pokharel pointed to the ADB ‘energy for all’ initiative which is aiming to provide Moderator Edes then opened up the floor to discussion. clean energy to an additional 100 million by 2015. In the subsequent discussions, the Pro-Environment The initiative aims to provide a soft credit mechanism Consortium argued that the funding provided by with a capacity building fund. He went on to describe the MDBs is, in many cases, channeled through lo- how it was the role of CSOs to generate the demand cal agencies, such as banks, which then pass it on to and make users aware of quality issues in order to en- investors at much higher costs and with less favorable sure that the private sector delivers a good quality ser- conditions. UNEP was keen to find out which were vice. In response to the question related to community the most appropriate financial mechanisms for fund- based projects, Pokharel remarked that the response  cif Program sessions    •  29 would depend on the technology in use. For example, which represents a significant barrier because the pre- micro-hydropower programs have been shown to be development costs for any project, such as the writing very effective on the community level, while a number of technical, financial and legal papers, can be costly. of biogas projects have failed at the local level. Panelist Grüner agreed that there was a lack of seed funding and Admassie picked up on the issue of the duel challenge risk-guarantee funds. He noted that the KfW were in of combating climate change while addressing energy the process of setting up a guarantee fund for geother- access in low income countries by pointing out that mal energy projects in Indonesia and Kenya. In the case climate change needed to be seen as an opportunity as of the Olkaria geo-thermal power plant the first two well as a problem because it can prompt countries to blocks of funding were provided by soft loans, the third skip the traditional energy phase and instead to invest by a private sector loan on commercial terms, and the in green energy technology. Investing in a green devel- fourth was to be provided almost entirely by the private opment pathway would allow low income countries sector on commercial terms. Such a model could pro- to use their lower emissions to leverage finance from vide an example for involving the private sector. higher emitter countries, and would provide another stream of revenue via carbon offsets. Another participant from the floor asked how the SREP might work for small scale projects that had Moderator Edes asked the panelists how the recent the potential to be replicated. Panelist Admassie ex- economic downturn had affected financing and new plained that in order for a project to be funded by approaches in renewable energy. Panelist Pokharel ex- the SREP it must be included in the country devel- plained that the crisis was being felt and it was more opment plan. He noted concern that the organizing challenging to generate funds from donors. At a mi- government agencies might only approve public sec- cro level, interest rates have risen which is in turn im- tor projects, thus the SREP will need to ensure more pacting end-users and reducing demand. The point diversity in the national development plans. Japan was also taken up by the National Council of Climate added to this point by noting that if the MDBs were Change, Indonesia, who noted that loans to small included in the formulation process for the country scale project developers are often channeled thorough development plan, it is more likely that private sector commercial banks and need to be personalized. Panel- projects would also be selected. ist Gruner noted that it was a challenge to introduce tailored investment loans for renewable energy proj- The IDB went on to comment that an important ects. He noted that the loans are set at variable rates part of the CTF is the support between the public which are set at levels they believe necessary to make and private sectors in terms of how they complement the project a success. He went on to explain that he and leverage each other and share knowledge. It is also was not a supporter of grants because they do not nec- important to ensure that the private sector can feed essarily provide the incentives for the end-consumer if back to the policy-makers to help them create an en- the company or the government were to receive the abling environment. In the case of the SREP it will be technology for free. vital that the country development plans include both public and private investment activities. The Pro Environment Consortium raised the con- cern that seed finance mechanisms are often not sup- In the closing statements for the session, Georg ported by commercial banks or development banks, Grüner underlined the importance of establishing vi- 3 0   •   P r o c e e d i n g s   o f   t h e   c l i m at e   i n v e s t m e n t   f u n d s able business models for the private sector. Govind In order to achieve the overarching objectives of the Raj Pokharel noted that there are already numerous SREP it was clear that successful experiences of re- good examples in countries that should be collected newable energy development and implementation and replicated wherein governments, stakeholders, the should be identified as potential models in order to private sector and NGOs have all been involved. Don- build national capacity. Such examples should also ald Morales agreed with the previous points and noted help to locate further partnerships with the private that a strong link between the public and private sec- sector, other development partners and civil society, tors is required to move investment plans forward. and should be replicated at the local, national, re- Ambachew Fekadeneh Admassie commented that the gional and indeed global levels. It was further stressed SREP should strive to link into leveraging existing cli- that governments play an integral part in facilitating mate change instruments, such as the UNFCCC. private sector involvement through the introduction of positive incentive structures and innovative finan- Session outcomes cial instruments. The private sector also plays a criti- cal role as partner in creating markets and providing In the closing plenary on Friday, 19 March, Jiwan sustained investments in renewable energy projects. It Acharya, ADB, commended the level of dialogue held was also noted that establishing financial intermediar- during the SREP discussions. He noted how the ses- ies can be an effective tool to manage and leverage sion had focused on the main barriers to scaling up re- resources, and grant money should be used to catalyze newable energy and the ways in which these relate to renewable energy interventions. institutional and technical capacity, regulatory frame- works and financial issues. He presented the following summary outcomes of the SREP session.  31 The Symposium on Climate Science and Technology, organized by UNEP, aimed to promote learning and knowledge sharing on cutting-edge climate change science and technology. The session consisted of: welcoming remarks Symposium from Kaveh Zahedi and Gemma Shepherd, UNEP; objectives and structure of the Symposium; a discussion on Energy Technology Roadmaps: Charting on Climate a Course for a Low Carbon Future with a presentation from Thomas Kerr, International Energy Agency (IEA) and response from Amal-Lee Amin, IDB; Science and and discussion on Carbon Benefits of Sustainable Land Management, with a presentation from David Skole, Michigan State University, and a response Technology from Reiner Wassman, International Rice Research Institute, Philippines. Kaveh Zahedi chaired the session. Energy Technology Roadmaps: Charting a Course for a Low Carbon Future Thomas Kerr, Senior Energy Analyst, IEA Office of Sustainable Policy and Technology, presented on Energy Technology Roadmaps: Charting a Course for a Low Carbon Future. In identifying the priority near term actions, Kerr highlighted the importance of technology incentives, technology specific bar- rier identification and removal, R&D funding, including private and public sectors and technology diffusion trends. He said the IEA’s work on roadmaps has focused on the need to identify technology opportunities for countries and sectors with the aim of identifying what is needed from 2010–2020 UneP Symposium on Climate Science and technology 3 2   •   P r o c e e d i n g s   o f   t h e   c l i m at e   i n v e s t m e n t   f u n d s and upwards to 2050. Kerr stressed the usefulness of national and local level. She noted that the Copenha- technology roadmaps in relation to: identifying and gen Accord called for the establishment of a technol- addressing technology-specific barriers; highlighting ogy mechanism and underscored the importance of necessary deployment policies and incentives; direct- an early discussion on what such a mechanism could ing increased R&D funding for new technologies; achieve and how it could enable greater technological and supporting technology diffusion and knowledge cooperation. sharing among countries. He then outlined the steps in IEA’s roadmap approach, which generally included Some participants said it would be useful for some the following steps: engaging cross-section of stake- of the roadmaps to feed into the country investment holders; identifying a baseline; using ETP BLUE Map plans. In response to issues raised regarding sustain- results for deployment pathway to 2050; identifying able transport measures, Kerr said the IEA used barriers such as technical, regulatory, policy, financial, electric vehicles and biofuels as a starting point, but public acceptance; and developing implementation stressed the importance of mobility shifts and the need action items for stakeholders. He noted the status for a sustainable transport approach that looks at all of completed and upcoming roadmaps: 2009 – car- urban transport systems, including non-technology bon capture and storage, electric vehicles, cement transport solutions. Several participants expressed sector, wind energy; 2010 – solar photovoltaic (PV) concern regard the use of the 450 parts per million and Concentrating Solar Power, nuclear power, en- option used in the scenarios, and noted their prefer- ergy efficient buildings: heating and cooling, smart ence for a 350 parts per million scenario in which we grids, biofuels, vehicle efficiency, and geothermal see temperate increases limited to below 1.5 degrees power; and 2011– iron & steel sector, hydrogen & Celsius. In response to questions on how to reduce fuel cells; clean/high-efficiency coal; energy efficiency the cost of solar energy in order to make it afford- in buildings: design & operation; biomass combus- able to the rural poor, Kerr recognized this as a critical tion for heat and power. On the next steps he said the future challenge, but said they have not focused on IEA would continue with the development of road- traditional development challenges of the solar sec- maps; ensure a linkage between IEA roadmaps and tor. Other participants highlighted the importance UNFCCC Technology Mechanism; ensure the use of of bringing renewable energy technologies to com- roadmaps at international, regional, sectoral and do- munities without access to modern energy services, mestic levels; and identify and document best practice and stressed the need to address affordability and the energy technology policy. ability of engaging women and children. Some par- ticipants expressed concern about inclusion of carbon In response to Kerr, Amal-Lee Amin said the chal- capture and storage (CCS) in the technology road- lenge of climate change is urgent and requires a trans- map and stressed that money spent on CCS would be formation of the energy system at all levels, combined better spent on renewable energy. Kerr noted the high with a continuum of actions required to bring new costs of CCS, but stressed that over time costs would technologies to market. She identified two main chal- decrease and that it would not be possible to reduce lenges at the international level: rapidly scaling up emissions with CCS technologies. In relation to the and accelerating in existing low carbon commercial UNFCCC process, participants noted the need for or near commercial demonstration; and institutional coherence between the CIF and the proposed tech- capacity development and skills development at the nology mechanism under the Copenhagen Accord, as   s y m P o s i u m   o n   c l i m at e   s c i e n c e   a n d   t e c h n o l o g y     •   3 3 well as coordination among existing technology pro- framework for organizing spatial data; carbon models cesses and mechanisms. provide ex ante calculations and detailed accounting; web-enabled geospatial information systems to pro- vide local and global access; and C2M Agro-forestry Carbon Benefits of Sustainable Land model adds a “green carbon� value chain to provide Management – Science, Technology and livelihood co-benefits. Economics of Modeling, Measurement and Monitoring In response, Reiner Wassman, Coordinator, Rice and Climate Change Consortium, International Rice Re- In his address, David Skole, Professor of Global search Institute, Philippines, said there was a need to Change Science, Department of Forestry, Michigan look at the issue more from the viewpoint of agricul- State University, outlined approaches for measur- ture rather than just forestry. He also questioned the able, reportable and verifiable (MRV) carbon ben- focus on carbon sequestration and highlighted the efits in agriculture and forestry. He identified three need to look at non-carbon sources, such as methane MRV opportunities. Emission reductions through and nitrous oxide. conservation of existing carbon stocks; for example, avoidance of deforestation or improved forest man- In the discussion, participants agreed that there should agement, including alternative harvest practices such be a process to learn more about the carbon and ni- as reduced-impact logging or fire and pest control; trogen cycles. Participants noted the discussion held carbon sequestration by the increase of carbon stocks: at Forest Day in Copenhagen, and stressed the pos- for example, afforestation, reforestation, agro-forestry, sibilities of involving communities as forest stewards. enhanced natural regeneration, re-vegetation of de- Many said that REDD+ provides an important oppor- graded lands, reduced soil tillage and other agricultural tunity to ensure the involvement of local communities practices to increase soil carbon or extend lifetimes of in MRV, as well as channeling finance. In this regard, wood products; and carbon substitution; for example, they underscored the importance of making the mech- the use of sustainably grown biofuels to replace fossil anism a bottom-up process, as well ensuring that the fuels or biomass to replace energy-intensive materi- mechanism included both carbon enhancement and als such as bricks, cement, steel and plastic. He said livelihood issues. Furthermore, participants noted the there were three core applications, namely: carbon ac- growth of new technologies, in particular low-cost counting for land use, land use change and forestry small-scale satellites that could assist community- (LULUCF); carbon monitoring and evaluation and based MRV. In relation to the use of Jatropha being carbon risk assessment; and tropical forest monitor- encouraged rather than growing food crops, it was ing. Among the key measurement elements he iden- suggested that communities remain with traditional tified the following: ground measurements provide agriculture but look to augment this with options to calibration and detailed sample frame analysis; re- enhance carbon stocks, as well as options for harness- mote sensing takes the ground samples to extrapolate ing renewable energy, such as agricultural residues. spatially to the landscape; GIS provides the data base  35 Closing Plenary CLOSInG PLenarY. L-r: Patricia Bliss-Guest, Manager, CIF administrative Unit; Claudio alatorre, IDB; Co-Chair naderev Saño, the Philippines; Co-Chair Katherine Sierra, World Bank; David Mcauley, aDB; Joyce thomas Peters, Grenada; and Jiwan acharya, aDB. The closing plenary, which took place in the afternoon on March 19, was chaired by Katherine Sierra, World Bank and Naderev Sano, the Philippines. The panel included Patricia Bliss-Guest, CIF Administrative Unit; Claudio Alatorre, IDB; David McCauley, ADB; Joyce Thomas Peters, Grenada; and Jiwan Acharya, ADB. Each panelist was invited to present a summary of the discussions from the CIF program sessions. Patricia Bliss-Guest presented the report from the ‘Voices of Stakeholders Ses- sion’. She noted that the discussions fell into five key themes which included climate as a development issue, governance and inclusion, financing, CIF on the ground and learning. A summary of the key points follows: Ç Agreeing that the climate change challenge risked undermining the gains that have already been made in development, and should be seen as an equity and justice issue. Ç Welcoming the balanced governance infrastructure and consensus based decision making process that has been adopted by the CIF, but also rec- ognizing that consensus requires compromise and cooperation. Ç Noting the opportunities for stakeholders to participate in the CIF deci- sion making process and urging all decision makers to respect the rights and cultures of indigenous peoples. 3 6   •   P r o c e e d i n g s   o f   t h e   c l i m at e   i n v e s t m e n t   f u n d s Ç Emphasizing that increased funds are required in extra costs to transfer to more renewable energy order to combat the challenge ahead of us, and sources. stressing that the use of loans should be re-exam- ined. David McCauley, ADB, presented the report from the Ç Noting the importance of linking the CIF to ac- FIP sessions. A summary of the key points follows: tions on the ground, which requires active par- ticipation, capacity building and building trust Ç Valuing the role of REDD+ as a source of collab- with local CSOs and communities. oration which would help to fit into the individ- Ç Underscoring the need for continuous learning ual needs of a country’s existing policy structures, throughout the process based on the feedback plans and institutional arrangements. from all stakeholders at all levels, and the need Ç Calling for a cohesive, country owned planning for more effective and accessible communica- process in which the role of stakeholders, and in tions strategies to enable country-to-country and particular indigenous peoples, are recognized. region-to-region exchanges. Ç Recognizing the need for collaboration between bilateral and multilateral donors, and also the Claudio Alatorre, IDB, presented the report from the need for south-south cooperation. CTF session. A summary of the key points follows: Ç In reference to leveraging resources, recognizing the need for private sector investment which will Ç Noting that to encourage private sector invest- require stable and enabling environments, and ment it was critical to generate stable and pre- also additional clarity on the institutional ar- dictable environments, adequate regulatory rangements and financing structures already in frameworks, strong and transparent regulations use. for institutions, and adequate division of respon- Ç Emphasizing that the approach must be country- sibilities. specific. Ç In reference to the program design stage, stake- holders underlined the need to involve stake- Joyce Thomas Peters, Grenada, presented the report holders at all levels and also to encourage a from the CIF program session on the PPCR. A sum- cross-department approach from governments. mary of the key points follows: Ç Recognizing the need for country-specific tech- nologies by increasing R&D capacity through the Ç Underlining the issue of loans versus grants for development of local supply chains and industrial investment in climate resilience. development. Ç Underscoring the need for certainty in relation Ç In reference to the need for financial sustainabili- to the allocation of resources for pilot countries, ty, recognizing the need for targeted interventions particularly in relation to the need for planning. that can remove entry barriers and open the door Ç On access to PPCR funding by local governments to more sustainable mechanisms in the future and and communities, the session identified the need also valuing and internalizing externalities such as for a better understanding of how financing could environmental damage. flow to the national and sub-national levels. Ç Underlining the fact that consumers in low in- Ç Suggesting that climate relevant issues should be come countries should not be the ones to bear the introduced into the curriculum of schools and  closing Plenary   •  37 educational institutions in order to strengthen their responses. Ç Recognizing the role of ongoing and continuous engagement with community organizations, the private sector, schools, youth and social networks, and the importance of building on existing net- works rather than trying to create new ones. Jiwan Acharya, ADB, presented the report from the SREP session. A summary of the key points follows: Ç Recognizing the need to identify potential mod- els and experiences on the ground for renewable energy development and implementation. Ç Realizing the importance of strong partnerships between the private sector, other development partners and civil society. Ç Underscoring the role that the government can play in providing sufficient incentives for private KatherIne SIerra, Co-Chair, Partnership Forum sector involvement. Ç Recognizing the role of financial intermediaries as a tool to manage and leverage resources. learned, she stressed the need to identify emerging problems, re-group, change and reflect on what is Naderev Saño, the Philippines, went on to outline most effective in different situations. She noted that how the level of engagement and dialogue witnessed the Partnership Forum provides an opportunity for during the Partnership Forum is unprecedented, and the World Bank Group to listen to the voices of those called on participants to remain critical and con- involved in implementing projects. structive as well as realistic and optimistic. He said the continued participation of all stakeholders would In her closing address, Ursula Schäfer-Preuss, Vice- lead to transformational change both on the ground President, Knowledge Management and Sustainable and within institutions. He expressed the wish that Development, ADB, said the Partnership Forum was the collective dialogue will be translated into robust a dynamic and inspiring process and had generated solutions and actions that can permeate into all levels many critical inputs and dialogue. She thanked all of society. participants for their feedback and contributions. In particular she welcomed the participation of indig- Katherine Sierra, World Bank, noted that when the enous peoples’ organizations and said the MDBs will World Bank Group set out to design the CIF they build on the many suggestions and proposals in their wanted to demonstrate action on the ground. She said future work with the CIF, and expressed hope that the they wanted to move and move big. With the knowl- international community can come to a good agree- edge that there would be mistakes made and lessons ment in Mexico and beyond.  39 The following governments were represented at the Partnership Forum: Armenia; Australia; Azerbaijan; Bangladesh; Benin; Bolivia (Plurinational Annex 1: Attendance State of ); Brazil; Cambodia; Cameroon; Canada; Chad; China; Colombia; Côte D’Ivoire; Democratic Republic Congo; Denmark; Dominica; Ecuador; Egypt; France; Georgia; Germany; Ghana; Grenada; Guyana; Haiti; Hon- duras; India; Indonesia; Jamaica; Japan; Jordan; Kenya; Kosovo; Kyrgyz Re- public; Maldives; Mali; Mauritania; Mexico; Morocco; Mozambique; Nepal; Netherlands; Nicaragua; Niger; Nigeria; Norway; Palau; Papua New Guinea; Philippines; Romania; Rwanda; Samoa; Senegal; South Africa; St. Lucia; St. Vincent And The Grenadines; Sweden; Switzerland; Tajikistan; Tanzania; Thailand; Timor Leste; Togo; Tonga; Tunisia; Turkey; United Kingdom; United Republic of Tanzania; United States; Vietnam; Yemen, Republic of; and Zambia. The following United Nations (UN) bodies, programmes and funds were represented at the Partnership Forum: United Nations Convention to Com- bat Desertification; United Nations Development Programme; United Na- tions Environment Programme; United Nations Framework Convention on Climate Change; United Nations Children’s Fund; United Nations Program on Reduced Emissions from Deforestation and Forest Degradation (UN REDD); and the World Health Organization. The following multilateral development banks were represented at the Part- nership Forum: African Development Bank; Asian Development Bank; European Bank for Reconstruction and Development; Inter-American De- velopment Bank; International Bank for Reconstruction and Development; International Finance Corporation; Forest Carbon Partnership Fund; and the Global Environment Facility. The following non-governmental and civil society organizations were repre- sented at the Partnership Forum: Save the Humanity; Society for the Empow- erment of the People; FECOFUN Nepal; PRODENA; Nile Basin Discourse Forum in Rwanda; Greenpeace; IIRR; Spire; International Cameroon; Ac- tion en Faveur de l’Homme et de la Nature (AFHON); NGO Forum on the ADB; IBON Foundation; EMI; NESDA-CA, Cameroon; Halcrow Group Ltd; Transparency and Economic Development Initiatives; Transparency In- ternational; Insituto Natura; Plan International; APREC Coastal Ecosystems; Planète Urgence; Catholic Bishops‘ Conference of the Philippines Caritas, Philippines; Khazer Ecological and Cultural NGO; World Resources Insti- tute; Dhaka Ahsania Mission; International Copper Association; Ashoka Trust 4 0   •   P r o c e e d i n g s   o f   t h e   c l i m at e   i n v e s t m e n t   f u n d s for Research in Ecology and the Environment; Gram Peoples and Tribal of Tropical Forests; International Bharati Samiti (GBS); World Agroforestry Centre Economic Cooperation and Self-Development with (ICRAF); KEHATI Indonesia Biodiversity Founda- Identity of COICA; Indigenous Information Net- tion; Care Nepal, Nepal; Association for Country- work (IIN); International Alliance of Indigenous and wide Afforestation (ACA); Freedom from Debt Tribal People of the Tropical Forest (IAITPTF), West Coalition (FDC); Resource Conflict Institute (REC- African focal region / Ethnic Minority and Indigenous ONCILE); Grace Peter Charitable Trust; AHPPER; Right of Africa (EMIROAF); Organizacion De Los CBNet Business Consultancy Services; KFI; OXFAM Pueblos Indigenas De La Amazonia; Gayatra Store Philippines; Projonma Academy; Asian Women’s Enterprises; Ethan Bio-Fuels Ltd, Carbon Finance Network on Gender and Development (AWNGAD); Working Group ;World Business Council for Sustain- Global Forum on Women and the Environment; Save able Development; Enecore Carbon; Uganda Carbon the Earth Cambodia; GGS Institute of Information Bureau; Paulista ; Sol Xorce, LLC; PricewaterhouseC- Communication Technology India; Action Aid; The oopers; Timber Research and Development Associa- Nature Conservancy, North Asia Region; Asia NGO tion (TRADA);World Harmony; BEA International; Coalition for Agrarian Reform; Philippine Movement Institute for International Development (IID); Hare- for Climate Justice ; Environment Protection for Ru- welle International; Climate Business Network; G ral Development Organization (EPRUDO); Interna- Spiller Associates; International Copper Association tional Alliance of Indigenous and Tribal Peoples of Southeast Asia; Frontier Finance International Inc; the Tropical Forests; Ole Siosiomaga Society Incorpo- Debub University; and Michigan State University. rated (OLSSI); International Alliance of Indigenous  41 A survey was distributed to all participants at the end of the 2010 Partner- ship Forum in order to generate responses on the level of satisfaction with the format and content of the two days. Annex 2: Survey Responses The following provide a summary of the responses. Figure 1 • Respondents to have completed the survey 5% Country governments 2% 2% MDB UN and UN agencies 29% 21% NGO and IP Private sector 10% Scientific and technical institutions 29% 2% Bilateral development agencies Others Figure 2 • Respondents were asked to rate their overall experience of the 2010 Partnership Forum 30 25 20 15 10 5 0 Opening Lessons Voice of Moderated Reports from Wrap-up Plenary: Welcome Learned Stakeholders: Plenary Voices of and Key and Introduction Study Reflections Discussion Stakeholders Messages (JamesRadner) from Panel and CIF Program Sessions Little or no value Some value Great value Excellent value 4 2   •   P r o c e e d i n g s   o f   t h e   c l i m at e   i n v e s t m e n t   f u n d s Figure 3 • Respondents were asked to rate their experience of the 2010 Partnership Forum special sessions 18 16 14 12 10 8 6 4 2 0 CTF Panel FIP Session PPCR Session SREP Panel UNEP Science and Technology Update Little or no value Some value Great value Excellent value www.climateinvestmentfunds.org/cif/partnership_forum_2010