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Experience in Tracking Mobilized Private
Climate Finance
“Mobilizing Private Finance for Climate Action” ICETT, KfW, & REEEP joint side event
UNFCCC SB42 – Bonn, 5 June 2015
Tim Stumhofer & Dr. Jochen Harnisch
Environment & Climate Policy Unit, KfW Development Bank
Bank aus Verantwortung
Presentation overview
› I: Introduce OECD RC framework
› II: Tracking methodology in detail
› III: Aggregate results from pilot DFIs
OECD Research Collaborative framework
Framework and overview of decision points to estimate publicly
mobilized private climate finance
*Technical non-political initiative designed to inform calculation for $100b*
Stage 1: Define core concepts (I)
› Definition of climate change activities
› Based on IDFC tracking methodology/positive lists OR
› OECD/DAC Rio Marker (depending on participating institution)
› Classification of developed and developing countries
› Survey limited to a selection of DFIs in industrialized countries
› Determination of geographical origin of finance
› To qualify as internationally mobilized investment at least one
financial activity (including guarantees) by a public sector actor
from outside of the country of the investment needs to be
involved.
› Foreign direct investment does not directly qualify as mobilized
investment if no public sector actor is financially involved.
› Domestic investment in a country is eligible if mobilized by a
financing activity by an external public sector actor.
Stage 1: Define core concepts (II)
› Definition of public and private finance
› The asset financed is in private ownership (>= 50%) ("private
investment") AND/OR the financial contribution comes from a
private sector actor (“private capital”)
› AND IN BOTH CASES there is a supporting (“mobilizing”) link to a
financial activity by a public sector actor.
› Funds may only be reported as “mobilized private climate finance”
if not also reported as “public climate finance” to avoid doublecounting.
Stage 2. Identify public interventions and
instruments that can be credited
› Types of public interventions
› Financial cooperation primary focus given DFI mission/portfolios
› Financing through policy interventions allowed for in survey guidance
› Specific instruments used for the interventions
› Loans by private sector actors mobilized by DFI loans
› Loans by private sector actors mobilized by DFI equity positions
› Loans by private sector actor mobilized by DFI guarantees
› Equity from private sector mobilized by DFI loans
› Equity from the private sector actor mobilized by DFI equity positions
› Loans by private sector actor mobilized by DFI grants (e.g. to cover costs of a
renewable energy feed-in law or premium or CO2-certificates in the CDM)
› Equity from private sector actor mobilized by DFI grants (e.g. to cover costs of a
renewable energy feed-in law or premium or CO2-certificates in the CDM)
› Loans to the private sector generated by the revolving use of credit lines or green
funds (subtract original loan to avoid double counting)
› Loans and equity mobilized from the private sector in other ways under PPPs
Stage 3. Value public interventions and account
for total private finance involved (I)
› Choice of and conversion of currency
› Disbursed: 1 July local currency to USD
› Planned: 1 Jan local currency to USD
› Choice of point of measurement
› Commitment (financial close)
Stage 3. Value public interventions and account
for total private finance involved (II)
› Valuation of different public interventions and boundaries &
estimation of private finance involved
Stage 4. Estimate mobilized private climate finance
› Assessment of causality between public interventions and
private finance
› Public sector financial activity must be suitable to support a
positive decision in favor of the specific investment.
› Subsidiarity principle
› Attribution of mobilized private climate finance to public
interventions and instruments
› Allocate mobilized investment on a pro-rata basis to different
public financiers independent of the specific instruments applied.
Results for pilot DFIs
Including: AFD, EDFI, JICA, KfW, OPIC