SA GREEN FUND

OECD/AfDB, Green Growth in Africa Workshop:

16 January, 2013

Presentation Outline

• Introduction

• Evolution of the Green Growth Policy Framework

• Establishment of the Green Fund

• Fund Objectives

• Initial Funding Focus

• Stages of Development

• Funding Instruments

• Progress to Date

• Next steps

Introduction

The South African government has over the years adopted a range of national legislation and plans in support of its vision of a greener and more sustainable economy

South Africa’s vision of sustainable economic development and commitment to a greener economy was re-affirmed at the Conference of Parties 17th Meeting (COP17) held in Durban, South Africa during December 2011

The Green Fund is a direct response to government’s commitment made at international level to contribute to a wide range of goals of transitioning to a greener economy

Evolution of Green Growth Policy Framework

Environmental Fiscal Reform Policy Paper (National Treasury)

Ten-year Innovation Plan

(Department Science and Technology)

Medium, Term Strategic Framework 2009-2014

(National Planning Commission)

• Industrial Policy Action Plan (Department of Trade and Industry)

• New Growth Path: Green Economy Accord (Economic Development Department)

• Integrated Resource Plan 2010-2030 (Department of Energy)

• National Climate Change Response - White Paper (Republic of South Africa)

The National Strategy for Sustainable Development and Action Plan (Department of Environmental Affairs)

National Development Plan – Vision 2030

(National Planning Commission)

2006

2008

2009

2010

2011

Establishment of the Green Fund

• The Government of South Africa through the Department of Environmental Affairs (DEA) has made available R800m funding over three years to initiate a Green Fund – Aimed at facilitating investment in green initiatives

– To transition SA to a greener economy

– To support socio-economic development

• The Green Fund is a partnership between the Development Bank of Southern Africa (DBSA)appointed as the implementing agent and DEA

• A Memorandum of Agreement (MoA) between the DBSA and the DEA was signed on 12 April 2012 – Provided for the establishment of the required structures and

systems within the DBSA for start-up and implementation of the Fund

Green Fund Objectives

It is envisaged that the Green Fund must demonstrate replicability and scale-up of impact through:

• Promoting innovative and high impact green programmes and projects

• Reinforcing climate policy objectives through green interventions

• Building an evidence base for the expansion of the green economy

• Attracting additional resources to support South Africa’s green economy development

Initial Funding Focus

Based on research and extensive consultation the following three thematic windows were identified for the initial focus of the Green Fund • The focus areas and eligibility criteria for each window is different and

informed by key national policies

Green Cities and Towns

RE & EE (Low Carbon

Economy)

Environmental & Natural Resource

Management

Three funding windows – not mutually exclusive

Green Cities and Towns

Green Cities and Towns

Vision: well run, compact and efficient cities and towns that deliver essential services to their residents without depleting natural resources

Storyline: • Greening core municipal engineering services, especially where

cost savings can be realised – Waste management and recycling, water demand management, public

transport, RE and EE on municipal buildings and infrastructure, urban greening

• Primary applicants are municipalities and municipal entities, also support organisations

• Strong emphasis on project preparation, with grants and concessional finance to take to scale

• Capacity and regulatory support on green procurement, planning, green built environment toolkit

Low Carbon Economy

Low Carbon Economy

Vision: a low carbon economy that is aligned with the targets for a peak, plateau and decline trajectory for greenhouse gas emissions

Storyline: • Focused on climate mitigation, renewable energy, energy

efficiency, cleaner production, sustainable transport and bio-fuels • Interventions include innovative structuring of EE and RE rollout,

vehicle fleet conversions, clean production programmes • Primary applicants are private companies, research organisations,

SMEs, NGOs • Initial emphasis on project preparation, support projects with

matching grants and concessional finance • Regulatory support for development of standards, SEAs

Environmental and Natural Resource Management

Environmental and Natural Resource Management

Vision: resilient eco-system services supporting the long term development path

Storyline: • Focused on biodiversity and ecosystem management, sustainable

agriculture, fisheries, rainwater harvesting • Demonstrate PES, convert conventional to sustainable agriculture

and replicate success • Primary beneficiaries are farmer and community based

organisations, research organisations, private sector, NGOs • Small grants to target community based enterprises, project

preparation for PES projects, supported by grants and concessional finance

• Regulatory support on adaptation planning, biodiversity offsets, PES, standards and eco-labelling

Stage of development

Develop, test and promote new technology

Innovate in project design and financing

Feasibility studies, business plans, regulatory approvals and financing

Policy feedback, capacity development and regulatory interventions to take programmes to scale

Bridging funding gaps to take projects to the point of financial viability

Green Fund Financial Instruments

1. Project development grant

• Recoverable • Non recoverable

2. Capital development grant • Recoverable • Non recoverable

3. Research and Policy Development grant 4. Concessional Project Development Loan

Progress to Date

• Green Fund operations, processes and systems are in place

• The Green Fund identified initial public sector projects in the Green Cities and Towns Window to test its approach and systems. Eleven of these projects to the value of R250 million have already been approved for funding and are at contracting stage

• The first public Request for Proposals (RFP) closed on 24 October 2012. 590 proposals worth just less than R11 billion were received, the evaluation process and due diligence process is currently underway

Next steps

Alignment and Positioning of the fund in order Leverage additional funding through a targeted resource mobilization plan.

• International development assistance and donor funds relating to green economy and climate change priorities

• Existing partners of national government such as multilateral partners as well as specialist supranational funds targeting green and climate interventions

• Private sector • Continued allocation from future and existing environmental

fiscal revenues

Thank You