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Climate strategies - Mitigation
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Contents & Objectives
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• Objective of this session
• LEDS and NAMA overview
• NAMA Facility
• Country examples
• Key questions
Content
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What you can expect to learn from this session:
• Get familiar with the importance of strategies in the field of climate change mitigation and for future climate finance
• Understand the concepts of
• Low Emission Development Strategy (LEDS) and
• Nationally Appropriate Mitigations Actions (NAMAs)
and their relevance for climate finance
• See examples of countries who developed or are implementing their NAMA
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Why do we need strategy & planning?
Strategy & plans can help to…
set concrete objectives, ideally based on rigorous data assessment and forecasts
outline how to achieve the objectives in the most cost-effective way and with which co-benefits through specific short- and mid-term actions
give guidance as
to with what kind of policy mix these objectives should be achieved,
what climate finance resources are needed and
what kind of international support is necessarySource: http://mitigationpartnership.net/
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Overview Low-Emission Development Strategies (LEDS) and
Nationally Appropriate Mitigation Actions (NAMA)
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Low-Emission Development Strategies (LEDS)
LEDS …
are generally used to describe forward looking national economic development plans or strategies that encompass low emission and/or climate resilient economic growth;
first emerged under the United Nations Framework Convention on Climate Change (UNFCCC) in 2008;
can advance national climate change and development policy in a more coordinated, coherent and strategic manner, e.g. by enhancing coordination across different ministries;
can improve communication with other stakeholder groups such as businesses and civil society, and increase public awareness of climate change science and policy;
can help guide the diversification of an economy (e.g. away from fossil fuels); inform the international community in a variety of ways, e.g. by identifying priority actions
for funding to the international community.
Source: UNFCCCAdelphi
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Low-Emission Development Strategies (LEDS)
Essential LEDS elements are …
A long-term strategic vision Baseline GHG emissions analysis and projections Mitigation opportunities and costs / Prioritization of key mitigation sectors and measures Identification of policies and measures and definition of targets Cost and financing of the LEDS
Source: OECD
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Development of NAMA concept
Nationally Appropriate Mitigation Actions (NAMA) are “voluntary actions taken by developing countries to reduce GHG emissions” (UNFCCC)
201120102009 2012 2013
…voluntary (not legally binding!) …nationally determined
NAMAs are…
The NAMA concept has been gradually developed
Source: UNFCCCAdelphi
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Connection of LEDS and NAMA
NAMA should be… …embedded in an over-
arching low emission development strategy (LEDS)
…in line with economic development and poverty eradication priorities
…in accordance with the capabilities and social and economic conditions of the country
…measurable, reportable and verifiable
Source: GIZUNFCCCAdelphi
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NAMA and CDM
NAMA are… diverse in nature, e.g. they
may be National goals or
strategies Sectoral policies or
programmes Projects/actions
from this perspective, NAMA may even comprise CDM-like activities
CDM are … …defined in Article 12 of the
Kyoto Protocol. It allows a country with an
emission-reduction or emission-limitation commitment under the Kyoto Protocol (Annex B Party) to implement an emission-reduction project in developing countries.
Such projects can earn saleable certified emission reduction (CER) credits, each equivalent to one tonne of CO2, which can be counted towards meeting Kyoto targets.
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Co-benefits of NAMA
Economic co-benefits: Jobs generated Infrastructure investment Development or diffusion of technology Financial co-benefits
Environmental co-benefits: Protection and efficient utilization of natural resources Reduction of noise, odours, pollutants
Social co-benefits: Improvement of labor conditions and human rights Promotion of education Improvement of health and safety Poverty alleviation Engagement of local communities Empowerment of women
Source: Sustainable Development Impacts of NAMAs: An integrated approach to assessment of co-benefits based on experience with the CDM, UNEP Riso Center 2013
Benefits of the Clean Development Mechanism 2011, UNFCCC 2012GIZ 2013
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Developing NAMA in 10 steps: GIZ Tool
Source: GIZ
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Financing NAMA: Key resourcing questions
Identifying the financing needs of the NAMA:
• What are the barriers to be addressed regarding the proposed action under the NAMA? What are the key elements of finance to achieve the objectives of this activity?
• What financing mechanisms in existing budget may be utilised to finance NAMAs? Will NAMA require funding in addition to existing public finance budget?
• Which elements are commercially viable, which elements require additional support?• What are the funding gaps and what kind of instruments are needed from bilateral and
multilateral, domestic public and private sector?
Source: Harnessing the potential of NAMA Financing, E3G presentation 2014Resourcing NAMAs – Stepping stones in a national climate financing strategy, E3G 2014
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Financing NAMA: Key resourcing questions (cont.)
Various types of NAMA finance available from international partners to gov’ts
• Project level financing as part of a programme e.g. green credit lines• Budget support and development policy loans• Multi-donor trust funds, pooled funds• Grant / technical assistance for project and programme development
Source: Harnessing the potential of NAMA Financing, E3G presentation 2014Resourcing NAMAs – Stepping stones in a national climate financing strategy, E3G 2014
19Source: UNFCCC NAMA database
Financing NAMA: some current funding optionsSectors Support type Funding typeTitle Regions
All NAMA preparation • Grants• Loans
International Climate Initiative (IKI)
All
All NAMA preparation • Grants• Concessional loans
Climate-related ODA funding
All
All NAMA preparation and implementation
• Grants Global Environmental Facility (GEF)
All
All NAMA implementation
• Grants• Concessional loans• Guarantees
NAMA Facility All
Energy supply and transport
NAMA implementation
• Grants• Guarantees• Equity
EU-Africa Infrastructure Fund (ITF)
Africa
All NAMA implementation
• Grants• Loans
Green Climate Fund All
Energy, industry, forestry, transport, waste
NAMA preparation • Grants• Guarantees• Equity
Neighborhood Investment Facility
Eastern Europe, Middle East, North Africa
Energy supply, buildings
NAMA preparation • Grants• Carbon finance
Austrian NAMA Initiative
Africa
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Financing NAMA: some current funding options (continued)
Sectors Support type Funding typeTitle Regions
All NAMA preparation • Loans, guarantees, equity, carbon finance
Spanish NAMA Platform
All
All NAMA preparation • Grants• Carbon finance
NEFCO Carbon Finance and Funds
Asia Pacific, Latin America & Caribbean
All NAMA preparation • Grants• Concessional loans
ODA for Climate Change Measures
All
All NAMA preparation and implementation
• Grants, loans, concessional loans, guarantees
Inter-American Development Bank (IDB)
Latin America & Caribbean
Energy supply and transport
NAMA implementation
• Grants• Loans
Latin American Investment Facility (LAIF)
Latin America and the Caribbean
Source: UNFCCC NAMA database
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Supported NAMA
Source: UNFCCC NAMA database
From Country NAMA Type of support
Supported Amount
Support for Activities related to sustainable Management of Forests
Georgia Adaptive Sustainable Forest Management in Borjomi-Bakuriani Forest District
Financial 1,940,492
Global Environment Facility (GEF)
Azerbaijan Nationally Appropriate Mitigation Actions for low-carbon end-use sectors
Financial 100,000
Kazakhstan Nationally Appropriate Mitigation Actions for Low-carbon Urban Development
Financial 5,930,000
ODA for Climate Change Measures (Japan)
Serbia Introduction of metering system and billing on the basis of measured consumption in district heating systems
Capacity building
0
Use of Solar energy for domestic hot water production in one heat plant
Capacity building
0
Expansion of existing city heating network Technology 960,000NAMA Facility Colombia Colombia TOD NAMA Financial 18,500,000Spanish NAMA Platform
Uruguay High Integration Program of Wind Energy Financial
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NAMA Facility
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Financing NAMA: International German-British NAMA Facility
Founders: Germany and the UK (2012)Denmark EU (2014)
Total commitment: 2012 - $70 million
2013 - $50 millionProjects supported: implementation of transformational
NAMAs in developing countriesSupport instruments: financial (grants, concessional loans and guarantees) and technical cooperation Calls for proposals: see http://www.nama-facility.org/Next Call: April 2015
Source: http://nama-facility.org/
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Financing NAMA: International German-British NAMA Facility
Projects under appraisal:
• Chilean Self-supply Renewable Energy (SSRE) NAMA • Costa Rica Low Carbon Coffee NAMA• Indonesia NAMA SUTRI• Peru Sustainable Urban Transport NAMA• Tajikistan Forestry NAMA• Thailand RAC NAMA and Burkina Faso Biomass Energy NAMA
Source: http://nama-facility.org/
Projects supported: • Colombia Transit-oriented Development (TOD) NAMA• Mexico Sustainable Housing NAMA
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NAMA Facility project criteria
Eligibility criteria
Source: http://nama-facility.org/
Ambition criteria Feasibility criteria
• Formal requirements• Submission by a qualified
institution• Endorsement by national
government• Cooperation with qualified
delivery organization• Readiness for starting
NAMA implementation • Adequate time-frames• Financing €5-15 million• Concept for phase-out of
international support• Qualification as ODA given
Potential for transformational change
National and international
embeddedness
Mitigation ambition
Financial ambition
Sustainable developments co-benefits
Project structure
Long-frame and monitoring and
evaluation
Project finance
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NAMA Facility project criteria: transformational change
Source: http://nama-facility.org/
Projects are considered as conducive to transformational change if they: contribute to enabling either a significant evolution in terms of scope (e.g. scaling-up or
replication), or enabling a faster and/or a significant shift from one state to another; have a catalytic effect and include mechanisms to ensure the sustainability of the
impacts, local ownership and political will, the involvement of the private sector and the use of innovative technologies and approaches, and;
allow for systematic learning processes.
The concept of transformational change towards sustainable low-emission development is a rather new concept it will likely be adjusted as knowledge evolves..
Further reading: NAMA Facility (2014): Potential for Transformational Change, NAMA Facility factsheet Wuppertal Institute (2014): Capacity Building for Transformational Change in
International Climate Finance
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Country examples
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Colombia example: Transit-oriented Development NAMA
Short description
Transformation of urban development in Colombia through transit-oriented urban development (TOD) to reduce growth in car traffic by 25–36%
Linking climate, transportation and housing investment and policies Financial and technical assistance instruments, public-private partnerships to
address market barriers and attract to private TOD investment Duration: 2014-2016
Institutions Partner ministries: Ministry of Transport,Ministry of Environment & Sustainable
Development,Ministry of Housing
Delivery organizations: Financiera de Desarrollo Territorial S.A. (FINDETER),
Center for Clean Air Policy (CCAP)
Accessed finance
NAMA Facility: €14.9 million FINDETER: $20 million
Source: http://nama-facility.org/http://ccap.org/
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Mexico example: NAMA for Sustainable New Housing
1 Ministry of Environment and Natural Resources (SEMARNAT), Ministry of Agrarian, Territorial and Urban Development (SEDATU), Secretariat of Finance and Public Credit (SHCP)Source: GIZ, CONAVI
Mexican climate change
policy
Special Climate Change Programme: reduce 51 Mt CO2e per year by 2012, including “efficient housing and green mortgages”
Mexican Sustainable Housing NAMA
Sector: New residential housing for low-income familiesInvestors targeted:
• Households• Housing developers
Financial incentives:
• Low-cost loans• Grants
Objective: Emission reductions through facilitating private investment into sustainable housing
Mexican housing policy
National Housing Programme: construct 6mn homes by 2012, 1mn of which must be sustainable
Institutional set-up:
International donors
National Housing Commission
(CONAVI)
Unified Housing Registry (RUV)
Trust fund for grants
Mexican government1
NAMA Fund
Federal Mortgage Company (SHF)/
Subsidized loans revolving fund
Financial intermediaries
Financial intermediaries
Housing developers
Households Information flowFinancial flowMonitoring
More info here
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Mexico example (cont.): financing structure of the Housing NAMA
1 Inter-American Development Banks (IDB), Clean Technology Funds (CTF), Latin American Investment Facility (LAIF)Source: www.perspectives.cc
Investment Grants (EUR 6.5m)
Technical Assistance Component(EUR 2.3m)
Grant Component (EUR 6.5m)
Financial Intermediaries
Households Green Mortgage
Housing developers
Loan Component(EUR 159.2m)
Green Mortgage(EUR 39.8m)
Bridge Loans(EUR 119.4m)
Financial Intermediaries
TA Ecocasa(EUR 1.8m)
TA Passive House(EUR 0.5m)
Low Carbon Housing Passive Houses
Inputs
Instruments
Outcomes
Implementation
Ordinary loan from the IDB1
Concessional loans from CTF
and KFW
Grants from CTF
Grants from LAIF
Grants from LAIF
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Chile example: Self-Supply Renewable Energy (SSRE) NAMA
Key sectors: • Agro-industry: livestock, dairy, fruit and wine
• Retail: supermarkets, shopping centers
• Tourism: hotels
Regions: Entire country
Investors targeted:
• Private sector• Public sector (hospitals, schools,
universities, large public buildings)• ESCOs
Financial incentives:
• Low-cost loans• Grants
Objectives: • Uptake of self-supply renewable energy systems
• Contribute to national emission reduction targets and energy security
Source: Development of a NAMA proposal for Self-supply renewable energy (SSRE) in Chile, Ecofys 2013
Outreachcomponent
Pre-investment grant for pre-feasibility studies
Technical support component
Financial component
Outreach and awareness raising• Public
awareness campaign
• Technology shows and demonstrations
• Regional and local events
Self-Supply Renewable Energy Systems NAMA in Chile
Training and capacity building
Fund for renewable energy investments• Subsidized loans
at favorable rates and repayment terms
• Grants of up to 20% installation cost
Knowledge exchange
Technical help desk
Grid connection support
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Chile example (cont.): financing structure of the SSRE NAMA
Source: Development of a NAMA proposal for Self-supply renewable energy (SSRE) in Chile, Ecofys 2013
International donors
Center for Renewable Energy (CER)(approves all projects, disburses
grants)
Chilean economic developmentagency (CORFO) + International
development banks(contribute senior debt)
+
Financial Institution(contributes senior debt, disburses
loans)ESCOs and vendors(engineering and
construction)
End investors in target sectors
NAMA Grant Fund NAMA Guarantee Fund
Project loans
ESCOs
Technical warranty
Insurance company
Grants
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Key questions
• What is the status of LEDS in your country?
• Which NAMAs have been or are being developed in your country?
• What financing sources do you envisage for implementation?
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Thank you for your attention!!!
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List of references and recommended readings:
CCAP, 2013. Identifying Potential Sources for NAMA Finance
Ecofys, 2013. Annual Status Report on Nationally Appropriate Mitigation Actions (NAMAs)
Ecofys, 2013. Development of a NAMA proposal for Self-supply renewable energy (SSRE) in Chile
E3G, 2014. Strategic National Approaches to Climate Finance Report on scoping work in Peru, Chile and Colombia on national climate finance pathways and strategies
E3G, 2014. Resourcing NAMAs. Stepping stones in a national climate financing strategy
GIZ, 2013. Low-Emission Development Strategy (LEDS). Factsheet
GIZ, 2013. LEDS tool
GIZ, 2013. NAMA tool
GIZ, 2013. Nationally Appropriate Mitigation Action (NAMA). Factsheet
GIZ, 2012. The Climate Finance Cascade: A NAMA financing mechanism in a nutshell
GIZ 2011. Supported NAMA for Sustainable Housing in Mexico. Mitigation Actions and Financing Packages
IISD, 2013. Developing Financeable NAMAs. A Practitioner’s Guide
UNEP Riso Center, 2013. Understanding the Concept of Nationally Appropriate Mitigation Action
UNFCCC, 2013. Guidance for NAMA Design. Building on Country Experiences