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CTI side event at UNFCCC Climate Change Talks (SB36) Bonn, Germany May 18, 2012

The Climate Technology Initiative (CTI) held a side event at the UNFCCC, SB36 meetings. The event, entitled “Mobilizing Private Sector Financing for adapting to and mitigating Climate Change while promoting Development using CTI PFAN” was well attended by over 30 participants from a broad range of stakeholders including national delegates, private sector, international organizations, and NGO representatives. The event invited Mr. George Manful, Senior Task Manager, Climate Change Enabling Activities, Division of Technology Trade and Industry, UNEP, and Mr. Carlos Fuller, International & Regional Liaison Officer, Caribbean Community Climate Change Center (CCCCC) to share their experiences in adaptation related activities. An overview of the CTI Private Financing Advisory Network (CTI PFAN)’s activities and newly launched activity on exploring options to finance projects to implement technologies for adaptation was presented by Mr. Peter Storey, CTI PFAN Global Coordinator.

Mr. Holt opened the side event by welcoming the participants and provided an introduction and overview of the CTI as follows. The CTI’s objective is to promote more rapid development and diffusion of climate friendly and environmentally sound technologies and practices. In order to achieve the objective, the CTI works closely with various governmental and intergovernmental agencies, but the comparative advantage lies in the fact that the CTI works closely with the private sector which is the key component of the technology transfer process. The CTI also contributed expert input on preparing project proposals for private sector financing during the UNFCCC Workshops on Innovative Options for Financing the Development and Transfer of Technologies held in 2004 and 2005 out of which a key fact emerged that it is not a shortage of funds for investment and it is not a shortage of good projects, but instead, it was a shortage of good financing proposals capable of adequately communicating the merits of the projects to the international finance community. Based upon this message, the CTI worked with a core group of practicing financing professionals who agreed to work with the representatives from developing countries to showcase their efforts and see if their project financing proposals could be enhanced. As a result of these efforts, the CTI Private Financing Advisory Network (CTI PFAN) was founded. CTI PFAN connects clean energy projects seeking financing with investment sources seeking projects to invest. CTI PFAN will explore if the PFAN concept could be successfully adopted to adaptation related projects at the Exploratory Workshop planned in June 2012.

Mr. Peter Storey, CTI PFAN Global Coordinator, presented a summary of CTI PFAN outlining its mechanisms, the current activities and success stories as well as plans for the future as follows. CTI PFAN is a multi-lateral Initiative under the umbrella of CTI supported by the CTI member countries as well as ICETT, REEEP and USAID. CTI PFAN is also in discussion with other donors for additional funding of the programme. CTI PFAN is a network of experienced investors and consultants who provide professional guidance to the project developers in addressing barriers identified and helping them raise necessary financing for their clean energy projects. CTI PFAN select projects based on commercial / technical viability, GHG emission reduction potential, developmental benefits, competent management team, and replication / growth potential. CTI PFAN is technology neutral, i.e., the technology employed in the projects supported by the programme may come from any source or country. CTI PFAN currently has over 75 network members who have signed into PFAN MoU, and further 50 affiliates who are most often investor members. CTI PFAN is working with 160 projects representing USD 4.9 billion of required investment with 7 million tonnes of CO2 equivalent reduction potential per annum. CTI PFAN has successfully raised USD 384 million of investment for 30 projects representing 293MW of clean capacity installed, 94.5GWhrs of energy savings, and 1.7 million tonnes of CO2 equivalent reduction per annum. CTI PFAN has linkages with UNEP on TNAs, the Southern African Network for Accelerating Investments in Climate Technology Transfer (SANAICTT), the Climate Innovation Centres (CICs) in RSA and Kenya, the Financing Initiative of IEA Technology Platform, and the Energy & Environment Partnership (EEP). CTI PFAN intends to be a part of the UNFCCC Climate Technology Centre and Networks.

Mr. Manful noted that the first technology needs assessment was conducted under the GEF’s top-up funding using the TNA handbook developed with support from the CTI. He explained that the output of the TNA was not prioritized and as such most of the projects could not be developed further for funding. For the second round of TNAs, most countries produced not only technology needs assessment report but also technology action plan that can be developed into elaborate project concept to be used for approaching agencies and networks such as CTI PFAN. He emphasized the need to develop clean commercial energy sources in order to achieve sustainable economic development in Africa, and in the area of adaptation UNEP has invested resources in building resilience of local communities. UNEP is developing a knowledge network hubs for adaptation, which share ideas from the scientific assessments.

Mr. Fuller introduced the activities of Caribbean Community Climate Change Center (CCCCC) which is mandated to coordinate the regional response to climate change and its efforts to manage and adapt to its projected impacts. Citing an achievement of CCCCC program in Saint Lucia which installed water conservation system at a resort, he emphasized the importance of public private cooperation in adaptation related projects, and in some cases projects with both adaptation and mitigation elements.

Mr. Storey introduced the CTI PFAN’s activity to explore options to finance projects to implement technologies for adaptation, broadening the CTI PFAN activities to engage and enhance the role of private capital resources in financing of adaptation related projects. He noted that one of the findings in the background paper is that it is just as crucial to help the private sector to analyse and understand the specific risks of adaptation related projects as for any other projects. He emphasized that new public private partnership models need to be developed to help apportion and manage risk associated with adaptation related projects. He presented the proposed working definition for the purpose setting the guidance for the CTI PFAN adaptation activities as follows: “adaptation projects are projects which help reduce the vulnerability of populations, infrastructures, ecosystems, human or natural systems to the current and future impacts of climate change and climate-related risks and which help increase or maintain adaptive capacity and resilience in the targeted regions and countries of project implementation”. As one of the most promising areas the private sector can be engaged, he highlighted adaptation product or service that is delivered to a community to address a climate-related issue in such a way that community can afford it.

Presentations were followed by a lively period of questions and discussion led by Mr. Holt. In response to a question regarding intellectual property issues, Mr. Storey pointed out that IP is an asset that attracts investment, and good legislation on IPR provides incentive rather than deterrent. Mr. Holt closed the meeting with appreciation to the speakers and participants for their contribution to the useful discussion.