The GEF and the Private Sector
Last update, June 27 2013
Since its inception the GEF has engaged the private sector in a variety of ways, mostly through direct project support. The current GEF CEO Vision statement makes clear that in order to bring transformational change to the global environment, the public and private sectors must identify new ways of working together. The private sector is integral to achieving the overall global environmental objectives of the GEF, as it plays a pivotal role in providing solutions that contribute to protecting the global environment and thereby promoting environmentally sound and sustainable economic development. Today the GEF has three flagship programs for Public Private Partnerships (PPP) and many projects where private sector participation is a critical component.
1. Clean-Tech Programme for SMEs
The goal of this program is to encourage innovation in SMES through a competition and incubation pilot, building on the success of the South Africa Clean Tech Open held in November 2011 at COP17. SME competitions support entrepreneurs and innovators seeking to establish commercial ventures. This initiative will support the goals of many GEF countries who are seeking to grow their domestic private sector by specifically encouraging SMEs to expand in ―green and ―clean technologies to secure national competitiveness in a global 21st century economy. READ MORE
2. PPP Programmes
During the GEF-5 replenishment negotiations, Parties agreed to a new 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 (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; provides incentives for Countries using STAR allocation for projects to use non-grant instruments; promotes technology transfer and innovation among small and medium enterprises (SMEs).
PPP Programs submitted under this strategy can be for any GEF focal areas. Through June, 2013, the following PPP Programs have been approved by the GEF Council.
- IADB MIF Public-Private Partnership Program
- Regional (Africa): AfDB Public-Private Partnership Program
- Regional (Egypt, Jordan, Morocco, Tunisia) : EBRD South Eastern Mediterranean EE/ ESCO Markets Platform
- Regional (Caribbean Basin): IADB Sustainable Caribbean Basin Private Equity Fund
The GEFSEC is working with its agencies and countries to further explore PPP for adaptation. A first step is represented by the “Private Sector Engagement in Climate Change Adaptation’ (GEF/LDCF.SCCF.12/Inf.06), presented to the LDCF/SCCF Council in June 2012. The paper was prepared with the assistance of the International Finance Corporation.
Next-Steps For Private Sector Engagement
The GEF will continue to work with recipient countries and its partner agencies to implement existing private sector activities, including on-going Earth Fund projects and the new GEF-5 PPP. Innovative concepts for PPP in areas of natural resources, bio-diversity, forestry protection, chemicals, and adaptation will be explored. Projects that promote synergy among focal areas and innovative private sector solutions are especially being pursued. Projects have been already been submitted for the SME competitions in several countries. During the GEF Agenda 2020 Strategy development, additional efforts will be made to listen to the needs of countries and private sector partners, and to develop innovative mechanisms to enhance private sector engagement at the GEF.
Other Initiaves: The Earth Fund
Operative since 2008, the Earth Fund, is an innovative pilot Public Private Partnership (PPP) initiative, managed by the IFC, with a set-aside funding of $50 million. The Earth Fund initiative allows the GEF to demonstrate ways to engage more systematically with the private sector in order to reach beyond its traditional boundaries, foster innovation and open new markets, and demonstrate the potential for strategic partnerships to achieve greater scale of investment than generally achievable.
The Earth Fund is being managed based on the concept of “Platforms,” under which a portfolio of projects will be managed. The portfolio has to be aligned with GEF Focal Areas or their equivalent, while projects within each Platform seek to address specific environmental challenges or to leverage particular business models or financial instruments. It function with a delegated structure that allows projects to be approved by Agencies that manage Platforms approved by the GEF Council. The following are the platforms approved so far:
- The Earth Fund Platform (IFC)
The first operational platform approved by the Council in May 2008, is an investment fund and advisory services fund managed by the IFC. The fund includes $30 million of GEF funding and $10 million of IFC funding.
- Project Document (2008)
- en.lighten Global Market Transformation for Efficient Lighting (UNEP)
- Greening the Cocoa Industry (UNEP - Rainforest Alliance)
- The Water Funds (IADB and The Nature Conservancy)
- Conservation Agreement Private Partnership Platform (World Bank and Conservation International)
- Project Document (Apr. 2009)
- The GEF Earth Board Procedures - Pilot Project (2009)
- GEFEO Review of the Earth Fund (Oct. 2010)
- Earth Fund Board Meetings
For more information, contact the GEF private sector lead, David Rodgers at email@example.com