Frankfurt School UNEP Collaborating Centre for Climate & Sustainable Energy Finance

Global Trends in Renewable Energy Investment 2017, published on April 6th by UN Environment, the Frankfurt School-UNEP Collaborating Centre, and Bloomberg New Energy Finance, finds that all investments in renewables totaled $241.6 billion (excluding large hydro). These investments added 138.5 gigawatts to global power capacity in 2016, up 8 per cent from the 127.5 gigawatts added the year before.

The Microfinance for Ecosystem-based Adaptation measures (MEbA) project aims to provide vulnerable and peri-urban populations in the Andean region of Colombia and Peru with microfinance services and products that will allow them to invest in activities related to ecosystem sustainability, improving their income and resilience towards climate change effects. 

This paper aims at answering the question whether crowdfunding represents an instrument that can make a significant contribution to financial development and inclusion in developing countries from a financial system perspective. Essentially, we argue that financial underdevelopment does not enhance but hamper crowdfunding’s potential in developing countries.

In 2015, global investment in renewables grew about 5 percent relative to the previous year and reached an all-time high of US$ 286 billion (bn). And there are more interesting trends: Investment in renewables’ based electricity generation capacity in 2015 has been more than double the investment in the major fossil fuels (renewables: US$ 266 bn versus US$ 130 bn for coal and gas stations). This also leads to added capacity in terms of Gigawatts in 2015 in renewables (134 GW) outstripping all other technologies combined (conventional coal, gas, and nuclear).

Across the globe, climate policy is increasingly using investment support instruments, such as grants, concessional loans, and guarantees – whereas carbon prices are losing importance. This development substantially increases the risk of inefficient public spending. In this paper, we examine the ability of finance instruments to effectively and efficiently address market failures related to clean energy investments.

This report focuses on investigating the SLCP mitigation technologies offering the highest mitigation potential of the three major SLCPs: black carbon, hydrofluorocarbons (HFCs), and methane, and each of the sectors identified by the CCAC sector initiatives. The report assesses the barriers to expediently mobilise private financial flows towards SLCP mitigating technologies in a number of key sector and markets; analyse the financial profiles of the key technologies.

Generating electric power based on geothermal energy is attractive (i) because of the low CO2 emissions and (ii) because electricity can be produced constantly, independent of the availability of wind or sunlight. These characteristics make geothermal energy an important option for safe, cost-effective and climate friendly power production. The main caveats are that geothermal energy is not available everywhere and that it is uncertain whether the resource will actually be found at a given site.

Renewable power has significant potential to reduce the cost of electricity in rural and island settings across the developing world. In areas distant from main power grids, regional isolated grids – often referred to as mini-grids – are often the main source of electricity to industry and households. Power generation usually relies on diesel fuel, often imported over long distances. Yet genera­ting costs can be reduced by hybridising these mini-grids with solar photo­vol­taic (PV) or other renewable power sources.

The main objective of this publication is to provide a reference framework for the key themes and concepts involved in the MEbA project, particularly those related to climate change, adaptation, ecosystems and microfinance. It also aims to provide background information on the Andean region, its ecosystems and the agricultural activity practised there. Finally, it highlights the role of the microfinance sector in promoting climate change adaptation, with a particular emphasis on sustainable approaches.

The MEbA project recently published its first systematisation effort to identify adaptation measures that could be promoted through microfinance products and services. The 40 selected principles may be implemented independently or in conjunction to support small-holder producers in adapting to Climate Change effects. The measures are organised in descriptive fact sheets that contain the required information to put each EbA option into practice. The ultimate goal of this exercise was to integrate EbA options within the microfinance context.

The publication outlines the minimum fiduciary standards and direct access requirements of the AF and GEF and describes the details of their application processes. It shows potential accredited institutions (Project Agencies; National, Regional and Multilateral Implementing Agencies) the minimum requirements that must be fulfilled, and provides examples of demonstrating compliance with these requirements in order to become accredited for direct access.

The National Environment Fund of Benin (Fonds National pour l'Environnement – FNE) was originally designed to mobilise and blend national and international funding sources for national environment projects.

n 2009 the Governments of Guyana and Norway signed a Memorandum of Understanding and a Joint Concept Note pledging that the countries will “work together to provide the world with a relevant, replicable model for how REDD+ can align the development objectives of forest countries with the world’s need to combat climate change.” The result of this cooperation is the Guyana REDD-Plus Investment Fund (GRIF).

In 2003 the Government of Thailand launched the Thai Energy Efficiency Revolving Fund (EERF) as part of its Energy Conservation Programme. The EERF works to overcome barriers within the Thai financial sector to stimulate adequate financing for energy efficiency and reduce the country's greenhouse gas emissions. This case study offers a sufficient background to the development of the EERF and provides an overview of the macroeconomic situation and the evolution of climate change policies in Thailand.

The Indonesia Climate Change Trust Fund (ICCTF) is designed as a National Climate (Trust) Fund (NCF), which aims to develop innovative ways to link international finance sources with national investment strategies. This case study provides an initial insight into the institutional set-up of a National Climate Finance Institution. It furthermore gives an overview about the macroeconomic and evolution of Indonesia's climate change policy. Last but not least it introduces the ICCTF, including the funding sources, design, governance, administration and current operations.

This paper outlines the minimum fiduciary standards and direct access requirements for the Adaptation Fund and Global Environment Facility and presents details of the required supporting documentation from two case studies.

This case study has been prepared as part of the Frankfurt School - UNEP Collaborating Centre for Climate & Sustainable Energy Finance project entitled the National Climate Finance Institutions Support Programme (NCFISP). This Project is funded by the German Federal Ministry for the Environment, Nature Conservation and Nuclear Safety in the framework of its International Climate Initiative (ICI). The information presented was compiled through desk research and interviews with the Indonesia Climate Change Trust Fund (ICCTF) Secretariat as well as a review of the literature.