During the GEF-5 replenishment negotiations, Parties agreed to a private sector set-aside of $80 million for the period July 1, 2010 through June 30, 2014. Its use is regulated by the Revised Strategy for Enhancing Engagement with the Private Sector (GEF C.41/09/Rev.01) that prioritizes partnerships with the multilateral regional development banks to focus on the expanded use of non-grant instruments, such as loans and equity investments. It's focus is to address critical areas for private sector engagement such as technical assistance and incubation and the provision of incremental finance for risk-reduction.
Public Private Partnership (PPP) Programs submitted under this strategy covered several GEF focal areas. During GEF-5, the GEF Council approved five innovative PPPs with a total funding commitment of $70 million.
- IADB MIF PUBLIC-PRIVATE PARTNERSHIP PROGRAM ($15 MILLION) - CLEANTECH
This program will make targeted equity investments in funds to promote energy efficiency, renewable energy, and bio-diversity in Latin America. The investments will contribute to energy savings, new renewable energy supply, reduction of greenhouse gas (GHG) emissions, preservation of natural resources, protection of bio-diversity, and development of sustainable business models. Climate change and bio-diversity focal areas will be addressed.
- AFDB PUBLIC-PRIVATE PARTNERSHIP PROGRAM ($20 MILLION)
This program will promote scaling up of renewable energy technologies on the African continent and contribute to the delivery of universal power supply in the region. Through the support for renewable energy projects, the program will contribute to reducing greenhouse gas (GHG) emissions from the energy supply and their negative effects on global warming and climate change. This program addressed the climate change focal area.
- EBRD SOUTH EASTERN MEDITERRANEAN EE/ ESCO MARKETS PLATFORM ($15 MILLION)
This public-private partnership (PPP) with EBRD will establish an innovative financing facility to serve four GEF countries in the Southern Mediterranean, including: Egypt, Jordan, Morocco, and Tunisia. The program will catalyze the creation of an energy efficiency and Energy Services Company (ESCO) market and explore innovative financing schemes for combined heat and power and renewable energy. In addition to saving energy and reducing greenhouse gas (GHG) emissions from the public sector, the program will contribute to the growth of a local supply chain in the industrial sector leading to replication. The GEF/EBRD PPP program supports the emergence of a market for energy efficiency that would not materialize otherwise.
- IADB SUSTAINABLE CARIBBEAN BASIN PRIVATE EQUITY FUND ($15 MILLION)
The overall goal of the Sustainable Caribbean Basin Private Equity Fund ("CBPEF") is to foster private investments that promote energy security, environmental sustainability and related economic opportunities in nations across the Caribbean Basin. The Fund will seek to invest in highly innovative investment platforms and business models that expand access to clean and safe energy, that achieve the sustainable use of natural capital, and that generate opportunities for local businesses and low income populations, including women and the indigenous.
- IADB CLIMATE-SMART AGRICULTURE FUND FOR THE AMERICAS ($5 MILLION)
The overall goal of IDB-GEF Climate-Smart Agriculture Fund for the Americas is to catalyze greater private sector investments in sustainable agriculture, forestry and rangeland systems in order to maintain and improve the flow of agro-ecosystem services from productive landscapes in the face of climate change and increasing resource scarcity. Climate-smart agriculture projects improve productivity and profits for agribusinesses and their value chains while decreasing greenhouse gas emissions from land use, improving management of ecosystem services and increasing resilience of productive systems. This Fund focuses on the synergies between private sector funds and agricultural development fund. It will also be the first fund tailored to incentivize private sector investment in climate smart agriculture. Support from the Fund will catalyze private sector co-financing in the form of equity from client companies, debt from IDB and commercial banks or a mixture.