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Inaugural Meeting of the San Giorgio Group: Expanding Green, Low-Emissions Finance

Island of San Giorgio Maggiore, Venice, Italy, October, 2011

San Giorgio Group Agenda(83.15kb)
San Giorgio Group Participant List(61.03kb)
San Giorgio Group Speaker Profiles(544.77kb)
San Giorgio Group Proposed Analytical Program(272.91kb)

Organized by Climate Policy Initiative and the World Bank Group in collaboration with China Light & Power and the Organization for Economic Co-operation and Development, the first meeting of the San Giorgio Group took place over one and a half days on the Island of San Giorgio Maggiore, Venice.

The objective of this inaugural meeting was to establish a new, select working group of key financial intermediaries and institutions actively engaged in green, low-emissions finance, limited to about 50 members.  Drawing on the experience of its members and using detailed analysis of investment portfolios and projects, the San Giorgio Group will explore ways to align public and private incentives, manage risks and coordinate different actors, to scale up and most effectively deploy funding.

The Group’s first meeting started with an overview of the current landscape of climate finance, including the different pathways, processes, portfolio decisions, and issues in play. A series of case study sessions then allowed the Group to explore the life cycle of existing green investment projects, paying attention to both process and design. The case studies focused on significant portfolios and projects involving all forms of 1) equity or debt investment, 2) investment guarantees or insurance products, 3) other diversification strategies, options, and derivatives related to project risk management or portfolio risk distribution. The diversity of studies enabled participants to address a range of issues involved in putting together successful green, low-emissions investment projects, including governance challenges, the role of national development and climate policies, innovations in investment models, and the potential to alter the trajectories of global and national emissions trends.

Overall, the meeting demonstrated that green, low-emissions finance is indeed emerging as an active practice that engages a variety of actors. As with all financing of innovative activities, the private sector will provide the bulk of the infrastructure investments essential to the transformation of the energy and land use systems that drive climate risks. Public and multilateral sources, however, are a vital complement to these private flows and, given their scarcity, need to be used skillfully to ensure maximum impact, often in combination with private flows and policy reforms led by host governments. The San Giorgio Group’s emphasis will therefore be on learning lessons from the evolving practice in the field of low-emissions finance, with a focus on the following questions:

  • What is the role of public money? What is the most effective balance between public and private capital?
  • How to deliver public money best?
  • How to ensure alignment of international and national public investment flows with each other and with private investments?
  • How to ensure learning?

The San Giorgio Group will continue to meet regularly to explore these questions based on the tracking of concrete case studies. Recently, during our joint official side event at the UNFCCC COP 17 in Durban, the San Giorgio Group had the opportunity to continue the lively debate which was started in Venice and to discuss the early results from the first set of SGG case studies.

For further information on the San Giorgio Group, please contact info@cpivenice.org.

 

Agenda and Presentations
Welcome
  • Thomas Heller, Executive Director, Climate Policy Initiative
  • Andrew Steer, Special Envoy for Climate Change, World Bank
  • Trevor Manuel, Minister in the Presidency of the Government of the Republic of South Africa: National Planning (VC)


Introductory Panel: Green, Low-Emissions Finance – Setting the Scene

This session introduces the main issues and questions to be answered during this event and clarifies the purpose of the San Giorgio Group. Following an overview of the current climate finance landscape and the functions of different actors therein, the rationale for the case studies chosen for this gathering will be laid out. Based on recent IFC analysis and the recent BNEF White Paper on “Towards a Green Climate Finance Framework”, key aspects on how to scale up green finance will be discussed.

Chair: Leif K. Ervik, Director General, Ministry of Finance, Norway

Panelists:

  • Barbara Buchner, Director, Climate Policy Initiative Venice
  • Shilpa Patel, Head, Strategy and Metrics, Climate Business Group, International Finance Corporation
  • Michael Liebreich, Chief Executive Officer, Bloomberg New Energy Finance
  • Todd Stern, Special Envoy for Climate Change, U.S. Department of State

 

Case Study 1: Clean Technology Fund – the CSP Morocco Project

The first case study focuses on the Clean Technology Fund for the Middle East and North Africa Concentrated Solar Power Scale-Up Program, part of which is financing the world’s largest concentrated solar power plant in Ourzazate, in eastern Morocco.

Chair: Caio Koch-Weser, Vice Chairman, Deutsche Bank

Presenters:

  • Silvia Pariente-David, Senior Energy Specialist, Middle East and North Africa Region, The World Bank Office in Morocco
  • Nabil Saimi, Executive Advisor, Moroccan Agency for Solar Energy

Commentator:

  • Adam Schwarz, Senior Advisor, McKinsey & Company Asia

Case Study 2: PROSOL – Financing Solar Water Heating in Tunisia

The second case study focuses on PROSOL, a joint initiative of the Tunisian Ministry of Industry, Energy, and Small- and Middle-Size Enterprises, the National Agency for Energy conservation of Tunisia, the Italian Ministry for the Environment, Land, and Sea, and UNEP, which aims to accelerate the penetration of solar water heating in Tunisia by targeting domestic financial institutions.

Chair: Jeremy Oppenheim, Director, Sustainability and Resource Productivity Initiative, McKinsey & Company

Presenters:

 

Commentators:

  • Annalidia Pansini, Head of Mediterranean Task Force, Ministry for the Environment, Land and Sea, Italy
  • Kenneth Chomitz, Senior Advisor, Independent Evaluation Group, World Bank (VC)

Case Study 3: OPIC’s Experiences with Guarantees and Other Financing Vehicles

The third case study focuses on experiences from the US government’s independent development finance agency, OPIC, which is increasingly engaged in renewable energy funding. OPIC provides direct and indirect financial support to renewable energy projects, the latter through private equity investment funds.

Chair: David Nelson, Senior Director of Research and Programs, Climate Policy Initiative

Presenter: John E. Morton, Vice President for Investment Policy, Overseas Private Investment Cooperation

Commentators:

  • Christopher Knowles, Head of Climate Change & Environment Division, European Investment Bank
  • Marie-Christine Tremblay, Head, Climate Change, Biodiversity and Development Division, Environment Directorate, OECD


Social Dinner

Dinner remarks on ‘‘How to mobilize the private sector in green, low-emissions finance?’

  • Caio Koch-Weser, Vice Chairman, Deutsche Bank
Case Study 4: The DONG Energy Walney Offshore Wind Farm

The fourth case study focuses on the Walney Offshore Windfarm project, which is located approximately 15km west of Barrow-in-Furness, United Kingdom. DONG Energy is the leading partner in the construction and operational phases of the Walney Offshore Windfarms, alongside Scottish and Southern Energy and a consortium of PGGM and Dutch Ampère Equity Fund, managed by Triodos Investment Management.

Chair: Michael Liebreich, Chief Executive Officer, Bloomberg New Energy Finance

Presenter: Jakob Baruël Poulsen, Senior Vice President, DONG Energy A/S

Commentators:

  • Jacob Atzen, Sales Manager, Siemens Wind Power A/S
  • Gerrit-Jan Brunink, Senior Investment Manager Energy & Climate, Triodos Investment Management B.V.

Stocktaking Session: What have we learned over the last two days? What should the San Giorgio Group do next?

Moderated by: Andrew Steer, Special Envoy for Climate Change, The World Bank

 

Panel: Greening a National (Development) Bank

This panel discusses experiences in greening national banks, a recent trend that can be observed around the world. Lessons will be derived from Brazil’s experiences, discussing how the Brazilian Development Bank (BNDES) is greening its portfolio and internal practices. Further experiences will be drawn from the development of the UK Green Investment Bank and evolving thinking in Guyana.

Chair: Mattia Romani, Senior Visiting Fellow, London School of Economics and Political Science and Director, London Office and Country Analytics, Global Green Growth Institute

Panelists:

  • Juliano Assunção, Director, Climate Policy Initiative Rio de Janeiro and Professor, Pontifícia Universidade Católica do Rio de Janeiro
  • Bruce Duguid, Senior Advisor, Green Investment Bank Team, UK Department for Business, Innovation & Skills
  • Kevin Hogan, Advisor to the President of Guyana

 

Experiences from the Capital Markets Climate Initiative (CMCI)

This panel focuses on CMCI, a UK-led initiative aimed at supporting the scale up of private finance flows to developing countries through the creation of an open-source platform that shares the expertise and experience of financial sector experts to work with governments in identifying why, where, and how public action can leverage climate-friendly private finance and investment.

Chair: Adam Schwarz, Senior Advisor, McKinsey & Company Asia

Presenter: Thomas Kerr, Head of Climate Change Initiatives, World Economic Forum

Commentators:

  • Rosalyn Eales, UK Department of Energy & Climate Change (DECC)
  • Mahua Acharya, Chief Strategy Officer, Emergent Ventures India

 

Brainstorming Session: Transformational Change – the Role of Resource Productivity

Transformational change has become a buzz word in discussions on the ultimate objectives of current policy design and the final destination of money. This brainstorming session focuses on recent experiences related to the role of resource productivity in enabling a transformation, applying resource productivity ideas to land use, and REDD+ related investments.

Chair: Andrew M. Deutz, Director, International Government Relations Department, The Nature Conservancy

Presenter: Jeremy Oppenheim, Director, Sustainability and Resource Productivity Initiative, McKinsey & Company

Commentators:

  • Justin Mundy, Director, The Prince’s Charities’ International Sustainability Unit
  • Thomas Heller, Executive Director, Climate Policy Initiative

 

Case Study 5: The German Special Fund for Energy and Climate

The German government’s Special Energy and Climate Fund will, on a permanent basis, provide additional financing for renewable energy, energy efficiency, and national and international climate protection. The financial basis is long-term, budget-independent financing, complementing existing budget allocations with the lion’s share coming from auctioning of emissions allowances.

Chair: Christopher Knowles, Head of Climate Change & Environment Division, European Investment Bank

Presenters:

  • Karsten Sach, Deputy Director General ‘International Cooperation’, German Federal Ministry for Environment, Nature Conservation and Nuclear Safety
  • Jochen Harnisch, Head of Division Competence Center Environment & Climate, KfW Development Bank

Commentator: Peter Wehrheim, Head of Unit, Climate Change Finance and Deforestation, European Commission

 

Concluding Panel: The Dynamics of Going Forward

The concluding panel brings experts from the policy and finance communities together to explore a strategy going forward. Based on the previous sessions and the San Giorgio Group’s emphasis on learning lessons from evolving practices, panelists will highlight the key issues that require attention to render green, low-emissions finance effective, in order to

  • identify the working agenda and main questions for the San Giorgio Group going forward, based on direction from Group members and
  • discuss implications of this meeting for the Transitional Committee related to the design of the Green Climate Fund.

 

Chair: Thomas Heller, Executive Director, Climate Policy Initiative

 

Panelists:

  • Jane Ebinger, Program Manager, Climate Change, Environment Department, The World Bank
  • Leif K. Ervik, Director General, Ministry of Finance, Norway
  • Caio Koch-Weser, Vice Chairman, Deutsche Bank
  • Karsten Sach, Deputy Director General ‘International Cooperation’, German Federal Ministry for Environment, Nature Conservation and Nuclear Safety

 

 

 

 Sach at SGG

 

Closing of the meeting by Thomas Heller, Executive Director, Climate Policy Initiative.