Approach

R20 is implementing a technical and financial ecosystem to cover the whole value chain of project identification, structuring, development, financing and implementation. Sub-national authorities around the world can benefit from this unique one stop shop to improve the sustainability of their regions.

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PROJECTS IDENTIFICATION

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.

Sub-national governments play a determinant role in creating environments in which projects can be successfully developed, financed and deployed, which is why R20 places these authorities at the center of its work.

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THE 100 CLIMATE SOLUTION 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.

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PROJECTS STRUCTURING

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.

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SOURCE is an online software and platform developed by the Sustainable Infrastructure Foundation (SIF), dedicated to assisting public sector users to prepare sustainable infrastructure projects. Recognized for its leadership in sub-national green infrastructure development, R20 has been endorsed by the leaders of major sub-national governments networks -AER, FMDV, ICLEI and ORU-Fogar-to conduct a global series of SOURCE trainings.

Training sessions are normally organized over two days, with the first day focused on an overview of the software and platform, and a second day dedicated to the creation of real projects in the system.

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 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.

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PROJECTS BANKABILITY

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.

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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 expertize for the feasibility studies needed by investors and developers.

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A Renewable Energy & Energy Efficiency PIF is currently under development. R20 partnered with BG Group, a firm of consulting engineers operating at international level, and Alpiq, a leading Swiss electricity and energy services provider, with the aim to help project developers perform pre-feasibility and feasibility studies and to facilitate the development of the most promising renewable and energy efficiency (except LED) infrastructure projects.

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PROJECTS FINANCING

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 Leonardo DiCaprio Philanthropic Planet Pledge Fund (PPF), and The Sub-national Climate Fund, provide and attract additional investment capital to fund project implementation.

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The Planet Pledge Fund is an initiative stemming from a coalition of philanthropists who will pool their resources to create a $1 billion fund invested in $10 billion of clean development projects that mitigate climate change and generate $1 billion of profits to be used for conservation of endangered habitats and species

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The Sub-national Climate Fund (SnCF) is a dedicated $350 million fund, structured to invest in a balanced portfolio of renewable energy, energy efficiency and waste management projects. The SnCF leverages the relative strengths of R20 and BlueOrchard, an Impact Investment Fund Manager in Switzerland, and uses a “blended financing” model that includes soft money from Governments and Foundations for first loss junior tranche, a mezzanine tranche from Development Banks and a senior debt tranche from private finance institutions.

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PROJECTS MRV

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.

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

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