Performance Based Climate Finance
Facility (PBC)
Alejandro Miranda Velazquez
Latin American and Caribbean Forum Carbon (LACCF) 2014
Bogotá, September 4, 2014
Vicepresidencia de Desarrollo Social y Ambiental
Performance Based Climate Finance Facility (PBC)
Background:
 CAF, in cooperation with KfW, develops and implements the
Initiative.
 The development aid funds come from the
Latin America Investment Facility (LAIF) of
the European Union.
Vicepresidencia de Desarrollo Social y Ambiental
Performance Based Climate Finance Facility (PBC)
Objective:
 Promote sustainable, low carbon development in the region, through
the design and implementation of 2 sector mitigation schemes
- The facility has 10 million Euros for the design and
implementation of the initiative, 5 million for each initiative
- The sectors of interest are: Renewable Power Generation - RE,
Energy Efficiency, Municipal Solid Waste Management and
Transportation
Goal:
Prevent the emission of 1,000,000 tCO2e by December 31st, 2021
Vicepresidencia de Desarrollo Social y Ambiental
Performance Based Climate Finance Facility (PBC)
Description:
 The Program will award financial incentives (subsidies) for the
implementation of pilot projects that can serve as an example to the
entire sector
 The incentive will be delivered on an ex-post basis, based on the
amount of carbon dioxide the project prevents (e.g. $/tCO2e)
 The amount of the incentive depends on the type of technology
implemented
 The number of projects that receive financial incentives will depend
upon their mitigation potential
Vicepresidencia de Desarrollo Social y Ambiental
Performance Based Climate Finance Facility (PBC)
Components:
1. Design of sector schemes and capacity
building for implementation
(Technical Assistance € 2 MM)
SECTOR
MITIGATION
MECHANISM
Promotes
sustainable and
low carbon
development in
the region
2. Economic incentives for the
implementation of pilot projects
(€ 8 MM)
3. Lines of financing or refinancing
granted by CAF and / or KfW
Vicepresidencia de Desarrollo Social y Ambiental
 Design of
Implementation Concept
 Elaboration of additional
studies
 Design of MRV
Mechanism
 Emissions Monitoring
and Verification (5 years)
 Grant for X number of
projects until the
emissions reductions goal
is achieved (1 MtCO2e)
Performance Based Climate Finance Facility (PBC)
Municipal Solid Waste Sector in Ecuador
State Bank
(Prosaneamiento)
Financial Mechanism :
European
Union (LAIF)
4 Million EUR
Grant
Incentive
$/tCO2e
(Ex-post)
Loan
In the future:
•
•
•
•
NAMA
Facility
Green
Climate Fund
Bilateral
Agreements
Other
MRV
Grants/
Subsidized Loans
Vicepresidencia de Desarrollo Social y Ambiental
Projects:
1. Technical closure of
dumps
2. Landfill construction
3. Others
+
1. Capture and incineration
of methane in the Dumps
/ Landfills
2. Mechanical / Biological
treatment: Composting
and Anaerobic Digestion.
Technical requirements for
measuring tCO2e
3. Capture of methane for
electricity generation
Performance Based Climate Finance Facility (PBC)
Municipal Solid Waste Sector in Ecuador
Current Status / Progress:
 Pre-feasibility study of the mechanism (Project Idea Note, late
2012)
 Signing of the Memorandum of Understanding with the Ministry
of Environment of Ecuador (MAE), January 2014
 Awarding of the Implementation Concept (August 2014)
 Design of the Sector Mitigation Scheme
 Identification of the type of activities / technologies eligible to receive the
subsidy
 Defining the amount of subsidy to deliver according to the type of project
 Identification and analysis of the pilot projects
 Design of the Measurement, Reporting and Verification (MRV) methods
(simpler than for CDM projects)
Vicepresidencia de Desarrollo Social y Ambiental
Many thanks for your attention!
Alejandro Miranda
Executive, Climate Change Unit
amiranda@caf.com
www.caf.com
Vicepresidencia de Desarrollo Social y Ambiental