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MOSAICO
Engaging Local Financial Institutions in Project Development and
Implementation Patrick J. D’Addario
PresidentFiorello H. LaGuardia Foundation
presented at the UNFCCC workshop on Innovative Options for Financing the Development and Transfer of Technologies
Montreal September 28, 2004
Fiorello H. LaGuardia 99th Mayor of the City of New York 1934-1945
Defined the Infrastructure of the City of New York
– Holland Tunnel
– Lincoln Tunnel
– East and West Side Highways
– Queens-Midtown Tunnel
– Triborough Bridge
– Brooklyn-Battery Tunnel
– LaGuardia and Kennedy (acquired land) Airports
– Unified Subway System
MOSAICO
LAGUARDIA, SECRETARY TO THE U.S. CONSUL GENERAL BUDAPEST, HUNGARY, 1903
COPYRIGHT: LAGUARDIA & WAGNER ARCHIVES MOSAICO
LAGUARDIA, COMRADES, AND “CONGRESSIONAL SPECIAL” FOGGIA, ITALY, 1918
COPYRIGHT: LAGUARDIA & WAGNER ARCHIVES MOSAICO
DIRECTOR-GENERAL UNITED NATIONS RELIEF AND REHABILITATION AGENCY (UNRRA), 1946
COPYRIGHT: LAGUARDIA & WAGNER ARCHIVES MOSAICO
THE FIORELLO H. LAGUARDIA FOUNDATION, FOUNDED 2001
The Foundation focuses on three major areas:
1. Structuring Italian-US partnerships to invest in community-basedsustainable development projects in selected developingcountries, in part through creation of a sustainable developmenttechnical assistance fund with bilateral, multilateral, andphilanthropic donors.
2. Fostering Italian-US investment in Italy, in particular Southern Italyand Sicily, and especially in the areas of sustainable agriculture,biotechnology, and renewable energy and energy efficiency.
3. Promoting academic exchange between universities in Italy anduniversities in the State of New York in biotechnology, agriculture,and medicine. In the context of academic exchange, thefoundation seeks to promote intellectual exchange at the cuttingedge of research in medical genetics, especially pertaining tochildhood genetic diseases in Southern Italy; in agriculturaltechnology to improve small scale farming efficiency; and inpharmaceuticals and genetic engineering to reduce environmentaldisease.
MOSAICO
OAS
Brazil India
Blue Moon
Comune diMilano
China
REEEP
Him. Fin. Fac.
Equity FundMultilateral BRTBrazilian Equity Fund
Volkhart FndtSainsbury FCTBanca Etica Regione Toscana/Arte ContinuaFondazione CariploUN FoundationFondazione BMdPdS
Funding History
(IREED RABO/BTS BELVOIR)
PREP-ASSIST
MOSAICO
Goal of MOSAICO
Catalyze Human, Institutional, and Financial Resourcesin Support of the Development of Locally Defined and
Managed Enterprises UtilizingSustainable Approaches and Infrastructures
on a Significant Scale
MOSAICO
MOSAICO Characteristics
Local Resources - natural, human, institutional, and financial
Leverage - Soft money used to facilitate entry of conventional private finance
Replicability - demand side - bundling, multiplier groupssupply side - financial, technical training
Integration - financial and commercial chains
Sustainability - environmental, social, and financial at project, program, and initiative levels
MOSAICO
MOSAICO Network
The Initiative is executed by a network with five nodes:
The Global Environmental Institute - Beijing, ChinaEnvironment, Energy, and Enterprise Ventures PLC - Delhi, IndiaInstituto Eco-Engenho - Maceió, Brazil
supported by
Energy and Security Group, Inc. - Washington, DCFiorello H. LaGuardia Foundation - New York, New YorkEcosoluzioni, Snc – Cortona, Italy
MOSAICO
MOSAICO Approach
Basket I (PREP-ASSIST) - community-based, rural, integrated agricultural projects
Basket II - financing facilities for RE, EE, Organic agriculture projects 500kw- 15MW
Basket III - strategic cooperation with financing programs of multilateral, bilateral or national institutions (often with Baskets
I & II)
MOSAICO
BASKET I (PREP-ASSIST) Overview
• Goal: Increase access to financing for small-scale sustainable infrastructures supporting local economic activity
• Objectives: Offer a network of financial intermediaries based in Brazil, Central America, China, and India that provide the following set of services :
– Project Preparation Assistance
– Risk Mitigation for Financial Institutions
– Small Carbon Sellers Facility
The network’s operations are supported by a set of technical experts that provide financial advisory services to local intermediaries and their interface with international markets for risk mitigation and environmental commodities.
MOSAICO
Approach: Basket I
Element One: Project Preparation Assistance Services
• Incubation Services
• Preinvestment Funding For Projects
• Credit Enhancements
MOSAICO
Approach: Basket I (cont’d)
Element Two: Mitigate Financial Institution Risk
• Short-term guarantees
• Subordinated Loss Reserves
• Project Bundling
MOSAICO
Approach: Basket I (cont’d)
Element Three: Greenhouse Gas (VER) Revenue Structures to Improve Returns
• Simplified Approach
• Develop Baseline
• Bundle and Register VERs
• Market VERs
MOSAICO
NORDESTEAlagoasBahiaCearáParaibaRio Grande Do NorteMaranhãoSergipePernambucoPiauí
MOSAICO
Brazil Program - Participants
BASKET I - solar water pumping for high value agricultural products in the nordeste
•Banco do Nordeste•Cooperatives•Municipalities•CEMINA•REDH
BASKET II - Equity and Guarantee Facility for small hydro and biomass generation in unconnected Amazon grid, energy efficiency
•Tetrahedron•Eletrobras (?)•Institutional Investors•Bilateral Investment Funds
MOSAICO
Drip Irrigation - Alagoas
MOSAICO
• Yunnan Province• Guangxi ZhuangAutonomous Region
MOSAICO
China Program - Participants
Basket IProvincial Poverty Alleviation and Development Poverty Alleviation and Development
OfficeOffice Rural Credit CooperativeAgricultural Bank of ChinaCooperativesProducer Associations
Basket IITsinghua Venture CapitalAsian Development Bank (?)
MOSAICO
Investment Structure
VenturePhase One
Ordinary Shares
Incubation & TA Services
Equity Capital
20% or higher
RFPTeam
Farmer
Farmer
Farmer
Equity Capital10% or lower
RFPSeed
Capital Fund
Preferred Shares
Ordinary Shares
Service #1
Service #2
MOSAICO
Investment Structure
RCC/ABC Loan80% or lower
RFPGuarantee
Facility
Guarantee(Loan principal only
w/asset trigger)
VenturePhase Two
PreferredShares
OrdinaryShares
Service #3
MOSAICO
Investment Structure
RCC/ABC Loan80% or lower
RFPGuarantee
Facility
Guarantee(Loan principal only
w/asset trigger)
VenturePhase Three
Farmer
RFPTeam
PreferredShares
OrdinaryShares
Ordinary Dividends(return on advisory services)
RFPSeed Capital
Fund
Preferred Dividends(return seed capital) Ordinary
Dividends(ROI)
MOSAICO
The States of• West Bengal• Uttaranchal• Sikkim
MOSAICO
Withering Organic Tea – Darjeeling
MOSAICO
India Program- ParticipantsWest Bengal - hydropower for organic tea
•Darjeeling Tea Planters Association •Hydro Project Developers•Local Financial Institutions
Uttaranchal - solar lanterns for productive uses•Central Himalayan Rural Action Group (Chirag)•Self Help Groups (SHGs)•Other Cooperatives•Tata/British Petroleum Solar, Inc
Sikkim - hydropower for organic cardamom•Tribal Groups• Infrastructure Development Finance Company• Rabo India Finance
MOSAICO
MOSAICO VALUE-ADDED CHAIN
Darjeeling OrganicTea Farm
HARROD’STEA
₤
BANK
TECHNICAL ASSISTANCEDEVELOPER
TECHNICAL ASSISTANCE
GUARANTEE $
VERs ₤
PREP-ASSIST (Himalayan Finance Facility)
MOSAICO