Leveraging private sector engagement in Carbon Market development through GEF

intervention.

EBRD

Challenges

EBRD region (ECA + Mongolia) is far behind (at par with Africa) in Carbon Project / market development, when compared to other regions

Uncertainty on JI, CDM and regional market rules like EU ETS is stalling the further carbon development, leading to private investors no longer developing new carbon projects

The slow carbon market development in the region in combination with high carbon intensity and low penetration of energy efficiency and renewable energy means that it remains an attractive potential source for credits

Critical mass is lacking to drive through regulatory improvements and lead to a reduction of barriers

Region could slip of the carbon market radar screen if no demand generating mechanisms are being put in place.

EBRD Objectives

Creating demand for carbon credits in EBRD region

Prioritise developments for Programmatic Approaches

GEF could be used to leverage EBRD and private sector investments for carbon credit investment activities

This in turn would enable carbon credit purchases to leverage project investments

Example how public funds can be used in the carbon market to leverage private sector investments

Role of EBRD

Track record in projects and has dedicated carbon experts

Ability to marry donor interest and leveraging private sector

Able to structure and invest equity in fund like vehicles

Can provide some element of risk-sharing

Can provide complementing technical assistance and policy dialogue

EBRD as co-investor helps to attract professional fund managers and leverage private sector interest/investments

Issues

Risk-sharing

Cost-sharing for project development

Sources of technical assistance funding