Regional: Enabling Climate Change Responses in Asia and the Pacific - Design of the Climate Public Private Partnership Fund (Subproject 5)

Sovereign Project | 44158-072

Summary

1. Between November 2007 and October 2009, HRH The Prince of Wales and the University of Cambridge Programme for Sustainability Leadership (CPSL) brought together leaders from some of the world's largest public pension funds (known as the "Pensions 8" or P8 - who together represent about $3 trillion of assets) and sovereign wealth funds with key experts on four separate occasions to advance investment strategies to address climate change. These P8 Summits help mobilize pension funds to lead in the move toward climate change action. The P8 Group ams to build on their existing responses to climate change and to cooperate with public sector institutions to design innovative public-private financing mechanisms for low carbon infrastructure in developing countries.

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Project Name Enabling Climate Change Responses in Asia and the Pacific - Design of the Climate Public Private Partnership Fund (Subproject 5)
Project Number 44158-072
Country Regional
Project Status Closed
Project Type / Modality of Assistance Technical Assistance
Source of Funding / Amount
TA 7674-REG: Enabling Climate Change Responses in Asia and the Pacific - Design of the Climate Public Private Partnership Fund (Subproject 5)
Technical Assistance Special Fund US$ 211,000.00
Strategic Agendas Environmentally sustainable growth
Inclusive economic growth
Regional integration
Drivers of Change Governance and capacity development
Sector / Subsector Finance - Infrastructure finance and investment funds
Gender Equity and Mainstreaming Some gender elements
Description

1. Between November 2007 and October 2009, HRH The Prince of Wales and the University of Cambridge Programme for Sustainability Leadership (CPSL) brought together leaders from some of the world's largest public pension funds (known as the "Pensions 8" or P8 - who together represent about $3 trillion of assets) and sovereign wealth funds with key experts on four separate occasions to advance investment strategies to address climate change. These P8 Summits help mobilize pension funds to lead in the move toward climate change action. The P8 Group ams to build on their existing responses to climate change and to cooperate with public sector institutions to design innovative public-private financing mechanisms for low carbon infrastructure in developing countries.

2. To support these efforts, ADB is working with the Department for International Development (DFID) of the United Kingdom and the International Finance Corporation to establish an investment vehicle (the "Climate Public-Private Partnership Fund" or "the Fund") through which institutional investors can access opportunities to invest in resource efficient and low carbon private equity and infrastructure assets and services in Asia. The Fund will be structured as a Public-Private Partnership to maximize opportunity and minimize risk. The Fund will seek to use public sector seed capital, concessionary finance and risk mitigation techniques to create the conditions under which private sector investors will be attracted to invest capital at scale into emerging Asian markets.

3. The Fund will seek to provide investors with a cost-efficient access route to scalable and replicable investment opportunities in resource efficiency and low carbon infrastructure assets and services in some of the fastest growing markets in the world. It will seek to invest in funds and also make direct investments by way of co-investments with investee funds in underlying projects and companies. It will seek to achieve economies of scale both at the Fund and the underlying investment level, minimizing transaction costs and processing time.

4. The Fund will seek investee funds and co-investment opportunities in the following main sectors in Asia:

" Sustainable energy supply and demand (renewable energy grid connected, distributed energy off grid, energy infrastructure, energy storage, energy efficiency, CCS);

" Sustainable transportation (biofuels, fuel cells, mass and electric transportation);

" Sustainable urban development (zero carbon city developments, the built environment);

" Water treatment (facilities and technologies);

" Waste treatment (facilities and technologies); and

" Sustainable land management (agriculture and forestry),

5. The Fund will seek to bring together the investment expertise of leading public and private equity investors with seed capital and concessionary finance of bilateral development agencies on the one hand and co-investment capital, lending and risk mitigation capabilities of the multilateral development banks on the other. The Fund is designed to have a catalytic effect in increasing the scale of private sector capital flows in resource efficiency and low carbon investment opportunities in developing markets by reducing risks and associated costs with such investments.

6. ADB may offer additional financing mechanisms, e.g. loans, grants, guarantees, insurances, credit lines, climate bonds, technical assistance and other forms of transaction support. Furthermore, it is intended that the managers of the Fund will engage with host country governments and policy-makers to design concessions, market incentives and risk-mitigation measures appropriate for the Fund's investments.

Project Rationale and Linkage to Country/Regional Strategy
Impact Participating governments increase appropriate responses to climate change and disasters with support from civil society and the private sector
Project Outcome
Description of Outcome Greater participation of private sector financing in clean energy
Progress Toward Outcome
Implementation Progress
Description of Project Outputs

1. Design the structure of a Climate Public-Private Partnership (CP3) Fund as a catalyst for increased private sector financing in clean energy.

2. Detailed design of a CP3 fund management structure.

3. Assist in preparing ADB's possible investment into the CP3.

4. Identify and engage potential fund investors, including large public pension funds, sovereign wealth funds, bilateral development agencies and private sector funds.

5. Roadshow, workshops, and seminars to consult on fund structure and management design and to promote the funds to investors.

Status of Implementation Progress (Outputs, Activities, and Issues)
Geographical Location
Summary of Environmental and Social Aspects
Environmental Aspects
Involuntary Resettlement
Indigenous Peoples
Stakeholder Communication, Participation, and Consultation
During Project Design
During Project Implementation
Business Opportunities
Consulting Services The consultants will be engaged by ADB in accordance with the Guidelines on the Use of Consultants (2007, as amended from time to time). A bio data based selection method will be adopted. Two international consultants are required for a total of 9 person months.
Responsible ADB Officer Samuel Tumiwa
Responsible ADB Department SDCC
Responsible ADB Division SDOD
Executing Agencies
Asian Development Bank6 ADB Avenue, Mandaluyong
Metro Manila, Philippines
P.O. Box 789, 1099 Manila,
Philippines
Timetable
Concept Clearance 29 Oct 2010
Fact Finding 14 Jan 2010 to 27 Jan 2010
MRM -
Approval 29 Nov 2010
Last Review Mission -
Last PDS Update 29 Jun 2010

TA 7674-REG

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
29 Nov 2010 - 29 Nov 2010 31 Dec 2013 - -
Financing Plan/TA Utilization Cumulative Disbursements
ADB Cofinancing Counterpart Total Date Amount
Gov Beneficiaries Project Sponsor Others
211,000.00 0.00 0.00 0.00 0.00 0.00 211,000.00 29 Nov 2010 162,766.55

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