Third Financial Expert Day of AFC – ADG: “Financing Sustainable Energy”

The “Financial Expert Day” is an annual event organised by the strategic partners AFC Consultants International (AFC) and the Academy of German Cooperatives (ADG) bringing together partners and experts of the companies, and facilitating a debate about a current topic in the field of financial system development. “Financing Sustainable Energy” was the topic of the Third Financial Expert Day organized in Montabaur on 9 and 10 January 2011. Long-standing partners of AFC and ADG, experts in financial system development and specialists in energy efficient and renewable energies technologies came together to learn and discuss about financing sustainable energy projects and the role of development banks in this process. The widespread experience of the participants in the development finance combined with specific expertise in the field of energy efficiency and renewable energies brought new ideas for the design of promotional financial products and accompanying measures for the financial institutions. The international community recognises that climate change is one of the today´s greatest challenges, and that actions should be taken to reduce greenhouse gas emissions and a further increase of the atmospheric temperature. The way forward is the promotion of sustainable energy, a term which is usually referred to as renewable energy, but that also includes technologies to improve energy efficiency. A related concept is green finance - collective term for a diverse range of activities that seek to use finance for environmental purposes, for example development of environmentally oriented financial products or use of environmental incentives to drive business decisions. Empirical evidence shows that especially in developing and emerging economies a more efficient use of natural resources is often constrained by a lack of financing mechanisms for ecologically sustainable and energy-efficient investments. The financial sector plays an important role in setting the right incentives for a more sustainable and ecologically sound development. Recognizing this need, international donor organizations are increasing their activities on the green finance field through promotional credit lines and technical assistance projects. AFC / ADG have implemented a number of projects in the field of financing sustainable energy and in the related field of climate change. One of them is the “Credit Line for Energy Efficiency and Climate Protection” for the Land Bank of the Philippines (LBP). The project focus is on the reduction of direct consumption of primary energy (diesel, coal, gas) and direct greenhouse gas emissions through the establishment of a credit line that will finance investments with positive impact on energy efficiency and climate protection. The project includes consultancy services for capacity building of the LBP´s personnel on subjects as energy efficiency and Clean Development Mechanism (CDM) procedures, assist LBP in the evaluation of investments proposals with regard to their impact on energy efficiency and greenhouse gas emissions, and assist potential clients of the credit line to identify potentials for energy efficiency, GHG reductions measures and CDM. In India, on behalf of KfW, AFC / ADG have prepared a feasibility study and designed the “Promotional Programme for Energy Efficient New Residential Housing in India” for the National Housing Bank (NHB). The proposed promotional programme is intended to contribute to the Government of India’s efforts to promote energy efficiency in the construction of new residential buildings, through the provision of preferential loans to builders and end-users. Furthermore AFC / ADG have assessed the feasibility of a rural finance programme to promote adaptation to climate change in rural areas in the Philippines on behalf of KFW. The feasibility study examined the financing needs of the target group for optimizing land use and management of resources and other assets in order to adapt to climate risks and climate change. Based on this assessment the “Rural Climate Risk Management and Finance Program” was designed. Contact: Jens Windel