Preparing technology transfer projects for financing

Bert van der Plas UNFCCC UNFCCC workshop on Technology Needs Assessments Bonn, 1 – 2 June 2011 1

Overview

• Technology transfer under the UNFCCC • Technology Transfer framework • Innovative options for financing the development and transfer of technologies • Implementing results of TNAs • Preparing project proposals for financing • Training programme on preparing projects for financing 2

Technology Transfer under the UNFCCC

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Technology transfer guided by Article 4.5 of the Convention

“The developed country Parties … shall take all practicable steps to promote, facilitate and finance, as appropriate, the transfer of, or access to, environmentally sound technologies and know-how to other Parties, particularly developing country Parties, to enable them to implement the provisions of the Convention…”

Milestones

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COP 7

• Framework for meaningful and effective actions to enhance the implementation of Art. 4.5 of the Convention (“Technology Transfer framework”) adopted • Expert Group on Technology Transfer (EGTT) established • Provide financial support to technology transfer activities through GEF (climate change focal area and special climate change fund) –

COP 13

• Mandate EGTT extended • Enhanced technology transfer framework adopted • Technology one of the building blocks of the Bali Action Plan –

COP 14

• Poznan Strategic Programme on technology transfer adopted –

COP 16

• Technology Mechanism established 3

Technology Transfer framework

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Five key themes and areas of work

– Technology needs and needs assessments (TNAs) – Technology Information – Enabling environments – Capacity building – Mechanisms

New areas of work

– Innovative options for financing the development and transfer of technology – Technologies for adaptation to climate change 4

TNAs

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What are main barriers to technology transfer identified by country?

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Implementing TNAs

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findings?

What are main opportunities for financing the implementation of TNA

FINANCIAL MECHANISM (GEF)

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Trust Fund

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SCCF

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LDCF

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Poznan strat. programme CDM/JI

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BILATERAL ODA Export Credit Agencies

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MULTILATERAL World Bank and regional development banks UNEP, UNDP, UNIDO EU COMMISSION

Convention and KP

National sources

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Subsidies Public-private partnerships

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PRIVATE SECTOR Domestic private investment Foreign Direct Investment Private equity Clean tech and carbon funds Voluntary carbon market Philanthropy

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Innovative options for financing the development and transfer of technology

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Purpose:

Improve access to financing for technology transfer projects and programmes both from public and private sources

Activities:

– Workshops on innovative financing – A ‘disconnect’ exists among development professionals, entrepreneurs who identify projects and those who provide resources (services and funding) – Many ‘fit for purpose’ tools and many general ‘how-to’ instructions but there exists a need for a more complete, accessible, balanced, process oriented and modular guide to preparing and presenting proposals – UNFCCC Guidebook on preparing technology transfer projects for financing (“Practitioners’ guide”) – Hands-on training on preparing project proposals for financing – Private Financing Advisory Network (PFAN) 7

Implementing results of TNAs

TNA ’s ENABLING ENVIRONMENT Project ideas Project financing proposals Technical assistance: • Practitioners guide • Training and coaching • Helpdesk Matchmaking Financial closing Financial assistance: • Public (multilateral, bilateral) • Private • Project finance platform 8

Preparing project proposals for financing

Typical proposal problems:

• Incomplete or Imbalanced: “Long” on one kind of information and “short” on other balancing information • Misdirected: send to wrong entity • Non-responsive: fails to be customized to the party to whom it is sent • Terminology gap: hard to understand 9

Training programme on preparing projects for financing

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Mandate

COP 13 requested the secretariat to coordinate the implementation of a regional training programme on project preparation…with the participation of relevant international organizations and initiatives –

Objectives

Improve access to financing for environmentally sound technology (EST) projects to mitigate and/or adapt to climate change – Support efforts to implement the results of TNAs carried out by developing countries within the UNFCCC process – Strengthen the capacity of project developers in developing countries in preparing project proposals on ESTs that will meet the standards of financial providers – Improve the quality of project proposals from developing countries related to ESTs to mitigate and/or adapt to climate change. 10

Training programme on preparing projects for financing

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Scope

– Target group: project developers in developing countries and relevant stakeholders, including international and national financial providers – Special attention to financial aspects of preparing and presenting projects related to ESTs – Focussed on projects related to ESTs both from public and private sector – Attention was given to the transfer of ESTs to mitigate climate change and to adapt to the impacts of climate change •

Approach

– Collaborate with international organizations and initiatives (GEF, UNEP, UNIDO, UNITAR, CTI) – Build on existing training material (practitioners guide, etc.) – Staged approach: Training of Trainers followed by regional training workshops – Practical and hands-on: use real project proposals as basis for group exercises – Targeted at project developers and financial providers •

Training activities:

Training of trainers workshop followed by three regional workshops for Africa, Latin America and the Caribbean, and Asia and the Pacific in 2009 and 2010 11

Training programme on preparing projects for financing

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Building blocks

Proposal What If?

To Whom?

Where?

Base Case Who?

Why?

What?

What?

Product, service, technology, client

Where?

Location, market, operating and regulatory conditions

Who?

Champion, owners, sponsors, team, approval bodies, stakeholders

Why?

Financial, social, environmental, market, growth • • •

How?

How?

Status, milestones, schedule, costs, revenues, grants, loans, investment 

BASE CASE What if?

Schedule changes, output and cost variances, key person events

To Whom?

Grant-makers, Lenders, Investors, Specialized Programs, Others 12

Experiences and lessons learned

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Project preparation

– No single formula for preparing successful proposals – Address financial structure at an early stage of project preparation – Project preparation proves to be challenging – Little assistance for ‘upstream’ preparation – Lack of support for project preparation •

Funding opportunities

– Lack of awareness about funding opportunities for technology transfer projects 13

Follow-up

• SBSTA 33 requested the secretariat: (a) To organize in French and Spanish training workshops on preparing technology transfer projects for financing for non-Annex I Parties, in collaboration with relevant international organizations and initiatives; (b) To coordinate, with the participation of relevant international organizations and initiatives, the implementation of a pilot training course combining online training with face-to-face training on preparing technology transfer projects for financing, building on the experiences and lessons learned from the regional training programme on project preparation.

• Note: subject to the availability of resources.

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THANK YOU!

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