Press Release: PFAN Outreach Breakfast at COP22
On Tuesday, 15 November 2016, PFAN organized the Outreach Breakfast at the 22nd Conference of Parties to the United Nations Framework Convention on Climate Change (UNFCCC).
Click here to see the full summary report.
This breakfast outreach event was convened to update key stakeholders on recent governance and institutional changes related to Private Financing Advisory Network (PFAN), and in particular the new hosting arrangement at United Nations Industrial Development Organization (UNIDO) in collaboration with the Renewable Energy and Energy Efficiency Partnership (REEEP). It was also an opportunity to share perspectives on a vision for PFAN in the medium-term. The event was convened by PFAN and conducted in the form of a moderated discussion following introductory remarks.
PFAN is most grateful for the commitment, engagement and contribution of the participants.
Summary of the discussions:
Scholars have estimated the current flow of global climate finance, from both private and public sources, to the tune of USD 400 billion in 2014. This is largely insufficient to reach the target set forth by the international community in terms of climate mitigation. PFAN is one instrument available to foster additional investment in low carbon, climate resilient projects.
The underlying idea behind PFAN is to “push money to projects and projects to money”. At the heart of PFAN is the generation of a pipeline of projects that are investment-ready. The methodology to source and develop projects, and to introduce those to investors, is well proven. It relies on a network of financing experts in the region and countries where PFAN operates. This lean and flexible structure is what allows PFAN to strive. The track record attests to the success achieved, notably in terms of the leveraging ratio (i.e. private over public funds) which is 1 / 80. Noteworthy is also that PFAN operates in frontier markets, and integrates development benefits in its appraisal process.
PFAN aspires to significantly scale up operations. Avenues to do so include doing more of the same, as well as exploring new opportunities, such as tapping into the wholesales investment market by bundling projects. PFAN is looking into ways to position itself in that space, but will surely require support and collaboration, notably to provide credit enhancements. The participants have shown keen interest in the portfolio approach.
Existing donors of PFAN acknowledged the progress made over the years, and recognized PFAN has a valuable mechanism to implement strategies to support the uptake of climate technologies in developing countries with the view of achieving sustainable development goals. In that context, the contribution of the private sector is perceived as essential, and the ability of PFAN to access its expertise and resources was deemed as commendable. Existing donors are encouraging new donors and partners to engage in PFAN.
Amongst the suggestions for PFAN to consider in future operations, the following were mentioned notably: to take into account the expansion of variable renewable energy; to combine clean energy with low carbon development strategies; to provide practical input to inform policy formulation; and to consider gender equality and entrepreneurship.
It was also noted that other initiatives exist in the area of investment facilitation for clean energy, and that careful coordination is required to avoid overlaps and promote crossfertilization.