Issues for Financing Climate Technology Project

Transcription

1 Issues for Financing Climate Technology Project CTCN Regional Forum for NDEs July 2016, Bangkok, Thailand

2 A bankable project features meets with legal and policy requirements consistent with institutional development strategy economic viable technology feasible market accessible Risk manageable Credible owner s reputation.

3 A climate technology project features Either mitigate GHG emissions or enhance resilience Economic: usually less viable Technology: advanced but risky, Market: less competition and hard acceptance Risk: usually high.

4 Some of Issues facing climate technology project Policy and regulatory risks Lack of economies of scale Weak local supply-chains and service industry Localisation and integration costs and risks High project identification & preparation costs Lack of local investment/financing expertise

5 Some of Issues facing climate technology project Climate technology project often faces higher investment risks than other type of infra projects These risks/costs are amplified in developing countries These risks/costs are often higher for smaller, distributed and less standardised projects

6 Some of Issues facing climate technology project Technical assistance may help improve the bankability of a climate technology project by helping reduce specific investment risks, and to streamline and accelerate the overall project origination & structuring process.

7 TA to improve climate technology project bankable Develop stronger entrepreneurs: Support and mentor project developers, through accelerators & incubators. Support cross-border partnerships and sharing of knowledge and experiences Facilitate networking, collaboration and partnerships between key stakeholders

8 TA to improve climate technology project bankable Reduce market risks/find suitable customers: Help identify customers/early-adopters Help aggregate and streamline demand by working with large potential adopters (government through procurement. ) Help policy-makers/regulators to reduce investment risks

9 TA to improve climate technology project bankable Reduce technology costs & risks: Help develop higher technology standards Help potential customers assess to and test new solutions Help develop local service industry/supply-chain

10 TA to improve climate technology project bankable Reduce project origination costs and financing risks: Support project identification, preparation and structuring Help investors/bank improve capacity to evaluate climate tech projects Help connect project developers with investors/banks

11 Points for discussion and thinking Climate technology: what is unique feature? Can carbon reduction have real value? Carbon finance -- a real financial instrument for low carbon technology Can resilient/adaptive benefit have real value?

12 Points for discussion and thinking Till now, no real value of climate benefits legally defined by any law Can climate benefit by project be monetized? If yes, a climate tech project would be more bankable!

13 ADB Pilot Climate Technology Finance Center (CTFC) Starting from policy for mainstreaming, direct invest climate tech project, establishing LCT Marketplace, and engaging VC/PE funds, to A system innovative solution: Climate Technology Promotion mechanism

14 Climate Technology Promotion Mechanism Policy Finance CTPM Climate Technology Selection Capacity Building Markets

15 ADB s Pilot Asia-Pacific Climate Technology Finance Center (CTFC) Asia-Pacific Summit on Low Carbon Technology October 2016 Changsha, Hunan, China

16 Thank You! Xuedu Lu Advisor Sustainable Development and Climate Change Department Asian Development Bank