KfW Development Bank and the Rio Marker System

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Information about KfW Development Bank and the Rio Marker System
Finance

Published on January 27, 2014

Author: OECDdev

Source: slideshare.net

Description

KfW shares their views on whether the Rio marker system could be refined in order to produce more quantitative data on DAC members’ climate-change-related aid and other development finance, and on whether elements of the MDB approach be integrated in the Rio marker system.

KfW Development Bank – and the Rio Marker System Milena Breisinger Competence Center Environment & Climate KfW Development Bank Bank aus Verantwortung

Content 1 KfW Development Bank facts and figures 2012 2 KfW Development Bank and the Rio marker 3 Harmonization efforts 2

About KfW Group › Promotional bank of Germany › Founded in 1948 for implementation of the Marshall Plan › More than 5000 employees › We finance investment in Germany & Europe › We provide international project & export finance › We provide support for developing countries › 73 bn. Euro new commitments in 2012 › thereof 29 bn. Euro for renewable energy, energy efficiency & environment › thereof 4.7 bn. Euro outside Germany › Grants, concessional and commercial loans, mezzanine and equity finance 3

Methodology and classification process KfW Development Bank Methodology and support documents used: › Climate OECD DAC Rio Marker for project classification mitigation /adaptation › Handbook on the OECD DAC Climate Markers › Implementation guidance on OECD DAC Rio Markers - German Federal Ministry for Economic Cooperation and Development Classification process: Project manager classifies project during project preparation Support and Quality control by Competence centre Review by Federal Ministry before project approval Federal Statistical Office reports annually to OECD DAC Project funds are taken into account as 100%. › Numbers are used for internal reporting and external mapping exercises (UNEP BFI, IDFC, CPI etc.) 4

Commitments for environment and climate Comparing environment and climate categories 2008 – 2012 in Mio. € 3,3 bn. € 3,2 bn. € 4,5 bn. € 4,5 bn. € 4,9 bn. € 1.456 1.551 1.777 Mitigation 695 1.181 925 500 466 46 20 558 756 1.321 (40%) 2008 334 656 2009 1.136 (25%) 2010 Adaptation Environment 569 979 1.689 (53%) CTF Other 1.685 (37%) 2011 2.109 (43%) 2012 *According to statistics Jan. 2013. 5

Commitments for environment and climate New commitments 2012 by sectors and regions …Regions Asia / Oceania 33% Mio. € Europe / Caucasus Middle East / North Africa 22% 1.456 Sub-Saharan Africa Mitigation 22% 57% Adaptation 695 Latin America 23% Transregional 650 …Sectors (CRS-Sector) Environment Energy 37% Others 2.115 Water & Waste Multisectoral Financial 35% Forrest & Agriculture Social Infrastructure & Transport 11% 18% Others Disaster prevention 6

Commitments for environment and climate Mitigation commitments 2012 as “principle objective” (KLM 2) Mio. € Mitigation 30% 1.456 66% Adaptation 955 KLM2 695 KLM1 650 Environment (not climate) Others 34% 501 2.115 7

Commitments for environment and climate Adaptation commitments 2012 as “significant objective” (KLA 1) Mio. € Mitigation 1.456 Adaptation 14% 7% 52 695 650 93% 644 KLA2 KLA1 Environment (not climate) Others 2.115 8

Commitments for environment and climate Exercise: Change in Volume of CC Commitments 2012 based on different accreditation methods 1,0 Mitigation 0,5 1.456 1.271 0,4 35% 1.234 33% 44% Adaptation 388 439 695 650 650 650 13% Environment (not climate) Other 2.115 43% 2.555 52% 2.643 54% 9

Challenges: example Rio Marker Mitigation Goal: Track aid flows for developing countries’ effort to stabilize GHG concentrations Challenges: Comparability and consistency › › › › Distinction between principle and significant is tricky Unclear terms foster interpretation Markers should be understood and project classified by non-climate experts Positive lists of project examples for mitigation activities are helpful › Definitions: KLM 2 Activity aims directly and explicitly to the stabilization of greenhouse gas (GHG) concentration and thus combats climate change (principle objective). KLM 1 Activity contributes significantly (but not predominantly) to GHG stabilization (significant objective) KLM 0 Activity is not targeted towards GHG stabilization (not relevant) 10

Content 1 KfW Development Bank facts and figures 2012 2 KfW Development Bank and the Rio marker 3 Harmonization efforts 11

UNEP BFI Climate Change Working Group (CCWG) Members: UNEP, AFD, JICA, KfW, and NEFCO Formed in January 2009 Goal: › Yearly mapping exercises of climate change finance (since 2009). › Increase awareness Comparable and consistent approach - all BFIs report to OECD and use OECD DAC Marker Some results in US$ millions AFD JICA KFW Total 2011 Mitigation 2198 2803 2386 7387 Adaptation 572 1402 597 2571 Total 2770 4205 2983 9958 12

IDFC Climate Finance: Results Mapping of Green Finance Delivered by IDFC Members in 2011 Formed in 2011 - The IDFC is a network of 19 leading development finance institutions with mandates for national, sub-regional, regional and international activities around the world. Combined assets of more than USD 2,100 billion › First joint report on climate finance in 2012 › Significant climate finance: 89 billion US$ in 2011 › Share of climate finance as a proportion of total new finance commitments increased from 20% in 2010 to 24% in 2011 13

IDFC Climate Finance: Feedback Positive list and clear definitions enhance understanding among inhomogeneous group of financial institutions Issues encountered in the process to improved data quality and consistency: › Insufficient reporting systems › Lack of resources dedicated to collecting data › Non-availability of data and › Confidentiality issues 14

Conclusions: › Implementation of OECD DAC climate marker should be improved: › Taking into account experiences of reporting institutions › Reducing scope of interpretation or subjectivity in scoring (e.g. provide positive list in handbook) › Take into account requirements of other types of institutions to report (such as ExIm credit agencies, national development banks, private banks) › Differentiate within the scope of current category “other official flows” Next Steps towards a graduated harmonization: › Bilateral Financial institutions in favor of aligning future mapping exercises and studies › Start aligning definitions of sectors, regions, terminologies, data validation processes etc. 15

Thank you Milena Breisinger Competence Center Environment & Climate (LGc3) KFW Palmengartenstrasse 5–9 60325 Frankfurt am Main Tel +49 69 7431 – 1092 Fax +49 69 7431 - 3796 Milena.Breisinger@kfw.de Bank aus Verantwortung

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