An integrated approach to accelerate green infrastructure development and financing.
An integrated value chain approach is necessary to ensure that bankable projects emerge at scale. This involves “connecting the dots” between multiple stakeholders in policy, technology and finance sectors at each stage of the project development value chain to identify, develop and implement project portfolios.
Sub-national authorities around the world can benefit from this unique one stop shop to improve the sustainability of their regions.
R20 works with sub-national governments to identify potential low carbon and climate resilient infrastructure projects – in the field of waste optimization, renewable energy and energy efficiency – and secure political and financial support for their development.
R20 places sub-national governments at the center of its work because they play a determinant role in creating environments in which projects can be successfully developed, financed and deployed.
THE 100 CLIMATE SOLUTIONS PROJECT CAMPAIGN
The 100 Climate Solutions Project Campaign is an ongoing initiative from R20 and the Leonardo DiCaprio Foundation (LDF) that leverages R20’s extensive sub-national networks to build a portfolio of green infrastructure projects. The campaign is not a stand-alone one but is linked to a number of innovative financial mechanisms to facilitate the development of the most promising projects.
Thanks to the strong support from many networks and associations of local and regional governments and private companies, R20 and LDF have already identified over 400 renewable energy, energy efficiency and waste management infrastructure projects from all around the world.
Training & Capacity Building is an important aspect of project designing and structuring, which is why R20 conducts workshops, training programs and policy advisory services with local governments as well as with private and public sector partners.
By providing trainings, R20 establishes itself as a partner for sub-national governments, supporting the process of project designing and structuring, and proposing a framework for the collection of key information required for project development.
A Specialized Master’s program titled “Territories, Technology and Financing a Portfolio of Innovative Projects in the Green Economy “ was created by R20, in partnership with the Ecole Nationale Supérieure des Mines in Saint-Etienne (France), the National Polytechnic School of Oran (Algeria) and the Senghor University of Alexandria (Egypt). The aim of this Master’s program is to train political decision-makers on policies, technologies and financial models in the field of renewable energy, energy efficiency, waste management and mobility, and to prepare them to the challenges of the green economy within the framework of the 2030 agenda.
Fundraising for early project phases involves a number of heavy constraints, as traditional investors (DSIs, MDBs, Private Banks, Pension Funds and Equity Funds) usually don’t get involved in projects where risks and returns are uncertain. The costs of early stage feasibility studies constitute a major hindrance to bankable project development, especially in developing and emerging countries.
In order to remedy this bottleneck, R20 is working with its corporate partners to establish a number of Pre-investment Facilities (PIF), better known as Project Preparation Facilities. The goal of these Pre-Investment Facilities is to enable sub-nationals to tackle their transition to a low-carbon economy in a strategic manner, shifting from philanthropic or grant-ridden pilot initiatives to economic projects and ultimately to a mature market. Such structures would address the financing of the preliminary studies needed by investors, opening the pipeline of investment-ready projects.
The Waste Project Facilitator (WPF) is an innovative financial mechanism launched by R20 and EGIS – an international engineering, project structuring and operation group – in early 2017, which facilitates the development of the most promising waste projects. The WPF opens up the pipeline of investment-ready waste projects by bringing the expertise for the feasibility studies needed by investors and developers.
The Energy Project Facilitator (EPF) is a Swiss Pre-investement Facility launched by R20, BG Consulting Engineers, a firm of consulting engineers operating at international level, and Alpiq, a leading Swiss electricity and energy services provider, which brings together energy experts to facilitate the feasibility studies of promising renewable energy projects.
R20 promotes a number of innovative financial mechanisms to facilitate the development of the most promising projects. On the one hand, the Pre-Investment Facilities (PIFs) allow project teams to conduct the feasibility studies required for bankability: on the other hand, The Sub-national Climate Fund, provide and attract additional investment capital to fund project implementation.
The Sub-national Climate Fund (SnCF) is a dedicated $750 million Fund, structured to invest in a balanced portfolio of water and sanitation; restorative agriculture/aquaculture; urban development solutions; waste optimization; renewable energy generation and energy efficiency retrofits infrastructure projects. SnCF leverages the relative strengths of R20 and Pegasus Capital Advisors, an Impact Investment Fund Manager in New York, providing a uniquely comprehensive scope of action and “blending finance” from philanthropists, foundations, governments, development finance institutions and private investors.
Measure, Report and Verification (MRV) can play an important role in helping to attract additional finance for green infrastructure projects by adding another level of confidence – the verification component.
Based on a shared vision to accelerate progress on the Sustainable Development Goals (SDGs) and the transition to a green economy, R20, BlueOrchard, MyClimate and the Gold Standard Foundation have forged a collaboration to develop and set up a first-of-its-kind MRV process for the R20 value chain and the Subnational Climate Fund.
Read: “Why certification standards matter for city-level climate interventions” from our Director of Research & Technical Initiatives.
THE SnCF MRV PROCESS
The SnCF MRV process is a pioneer approach for certification at a fund level of the social and environmental requirements of Gold Standard for the Global Goals (GS4GG). The aim is to certify the fund approval process, to ensure that the funded projects meet all the GS applicable requirements and criteria. Additionally, for projects that aim to certify their impacts for monetization (carbon credits or other), they shall apply the corresponding methodology and comply with the SDG impact certification cycle