BLENDED FINANCE FOR CLIMATE PROGRAM Helsinki - Paris - Washington - - PowerPoint PPT Presentation

FINLAND-IFC

BLENDED FINANCE FOR CLIMATE

PROGRAM

Helsinki - Paris - Washington DC TC March 20, 2018

Key Objectives

• Address market barriers that prevent faster, more widespread or longer-

term sustainable adoption of low-carbon technologies and business models in least developed, low income, and lower middle income developing countries

• Support private sector clients to capture business opportunities and

avert or adapt to the risks that climate change will bring

• Leverage and bring private capital that will help developing and

emerging countries grow on a low carbon path and build resilience to climate impacts

• Catalyze investments with strong development and climate benefits that

would not happen otherwise

• Demonstrate the business case for higher-risk projects and create

markets for low carbon and climate change mitigation and adaptation solutions

• Program size: EUR 114 million
• Over a 5 year investment period, funds from the program will be used as

co-investments in the form of concessional finance

• Funds co-invested together with IFC’s commercial investments to

support private sector projects with high development impact potential

• In projects where fully commercial solutions are not yet possible

because

• The risks are considered too high, or
• The returns are either unproven, or
• Returns are not commensurate with the level of risk
• Investments in climate change mitigation and adaptation projects to

move ahead with innovative, early-stage climate projects

How does it work?

Climate Change Mitigation

• Renewable energy
• Energy efficiency in buildings
• Agriculture
• Forestry and land-use
• Water and wastewater
• Transport

Climate Change Adaptation

• Meteorology
• Water and sanitation
• Food security
• Sustainable forestry

Focus Sectors

• The program focuses on supporting projects in the least developed

countries, other low-income countries, and lower-middle income countries and territories

Focus Countries

• Equity
• Senior Debt
• Mezzanine debt
• Guarantees
• Focus on higher risk

investments to support projects with potential high development impacts

Instruments

Risks Impact

• Credit Pass

Through Swap

• Longer grace
• Longer tenor
• Sculpted

repayments

• Structural vs

Contractual

• Waterfall
• Rank
• Security
• Lower rates
• Ex-post
• Ex-ante

Pricing

Subordination

Local Currency Tenor

Levers of Concessionality

For further information, contact: Kruskaia Sierra-Escalante (or) Jussi Tapio Lehmusvaara IFC Blended Finance www.ifc.org/blendedfinance