What is the EGS project?
The EGS is an 18-month, € 346,446-grant project that aims to support ADFIAP’s “Greening of DFIs” Project through an EU-Asia Environmental Governance Partnership that leads to the development and initial application of Environmental Governance Standards (EGS) for member-DFIs.
The EGS will consist of the following:
- For the internal application within DFIs, an Environmental Performance Monitoring Program (EPM) that comprises of environmental management policies, tools and instruments, which would enable them to well manage their internal functions and operations;
- As an external dimension, an Environmental Rating Standard for Loan Appraisal and Project Finance (ERS) as a set of concrete measures for integrating environmental issues in established risk assessment procedures in lending to borrower-clients.
What are the objectives of the project?
- To implement an institutional change program in participating DFIs, as well as build their capacities by installing and implementing the EGS in their institutions;
- To implement the EGS in the financial marketplace where participating DFIs and other financial institutions operate;
- To implement a communication plan to share and advocate learnings gained from the proposed action;
- To produce courseware learning materials and handbooks, both in print and electronic versions, reports and other relevant documentations.
Who will benefit from the project?
The main target group consists of ADFIAP’s 83 member-DFIs located in 37 countries spread across Asia and the Pacific region. Other similar development-minded financial institutions within the countries of these member-DFIs will also be invited to participate in the training events under the project.
The project focuses on two sub-groupings:
- Internally, the officers and staff of ADFIAP member-DFIs, consisting mainly of the CEO, the CFO, the designated environmental officers, heads of lending and investment operations, bank loan appraisers/evaluators, investment portfolio managers, the bank’s HRD and PR managers; and
- Externally, the clients of the DFI, consisting mainly of loan borrowers, investor-clients, and trade and industry associations.
To read more about Environmental Governance Standards, follow this link: http://www.egs-asia.com
New Financiers and the Environment
We have entered a new era of South-South cooperation in the 21st century. Trade and investment flows between Asian, African and Latin American countries have grown rapidly in recent years. Companies from China, Korea, Thailand, Brazil and South Africa have taken a lead role in building textile plants, cell phone networks, car factories, roads and power plants in the developing world. The UN’s 2006 World Investment Report found that investment flows from developing countries increased from US $4 billion to US $61 billion between 1985 and 2004. The bulk of these transfers – US $60 billion – consisted of flows between developing countries. In 2002-2005, investments from developing countries accounted for 33 percent of all foreign investment in East Asia, 29 percent in Africa, and 20 percent in South, East and Southeast Asia.1 The figures will likely have risen further since then. Trade in consumer and investment goods, oil and iron ore, agricultural goods and timber, movies and tourism has grown just as fast as investment flows between developing countries. Commerce between China and Africa has expanded tenfold between 1999 and 2006. The export credit agencies of Brazil, China, Thailand and other emerging economies are playing a key role in financing infrastructure and extractive projects in the developing world. With loan approvals of US $36 billion, China Exim Bank became the world’s largest export credit agency in 2007 and has even outgrown the World Bank.
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ADFIAP, JBIC develop cooperation framework on green finance
ADFIAP and the Japan Bank for International Cooperation (JBIC) held a joint program on environmental cooperation framework in Siem Reap, Cambodia on November 17, 2010 during the periphery of the CEO Forum VII . The event has the support of the United Nations Environment Programme’s Finance Initiative (UNEPFI).
The joint program, which was aimed at highlighting ADFIAP and its members’ work and advocacy on financing environment projects as well as JBIC’s own environmental programs, is envisioned to rally the cause for a green finance alliance among financial institutions, including DFIs, to support a global initiative to raise funding for environment and climate change-related projects around the world estimated to amount anywhere between US$ 400 to 600 billion or even more.
The joint event also featured the presentations of ADFIAP Chairman, Nihal Fonseka, on “Alliance for DFIs for Climate Change”, of the Development Bank of the Philippines’ Assistant Vice President, Ms. Maria Ana Visitacion Domingo, on “Climate Finance and Carbon Finance” and of the Bank for Agriculture & Agricultural Cooperatives’ Executive Vice President, Mr. Kamolplant Asaves on “Agricultural Weather Index Insurance in Thailand”.
JBIC’s Special Advisor and Head of Environmental Finance Engineering Department, Mr. Takashi Hongo, who was the event’s lead resource person and program director, discussed the role of financial institutions under the current global environment constraints as well as presented instruments that put priority on climate projects that are commercially viable and use the best technology available. He also presented JBIC’s monitoring, reporting and verification (MRV) scheme to best address these issues.
LandBank to manage climate-change funds
The Land Bank of the Philippines (LBP) was nominated by the Climate Change Commission (CCC) as the country’s National Implementing Entity (NIE) that will receive funds accessed by the Philippines for its climate-change adaptation and mitigation initiatives.
The CCC, led by vice chairman Heherson T. Alvarez, and LBP, represented by its president Gilda E. Pico, recently signed a memorandum of agreement (MOA) formalizing the partnership.
The signing of the MOA, which also paved the way for the setting up of the NIE, makes the Philippines a step closer to accessing international funding to ensure that the country is able to adapt to the disastrous impacts of climate change.
The establishment of an accredited NIE within the country that is applying for fund support is one of the fiduciary requirements of the Adaptation Fund Board of theUnited Nations Framework Strategy on Climate Change (UNFSCC).
With an NIE, the Philippines can also access the Adaptation Fund under the Kyoto Protocol and other similar funding sources such as the USD100-billion Long-Term Finance being organized by UN Secretary-General Ban-Ki Moon.
LBP’s nomination stems not only for its vast banking network and resources, but most especially for its active involvement in managing international funds that finance green projects in the country, such as the Ozone Depleting Substances Phaseout Investment Project and the KfW Credit Line for Energy Efficiency and Climate Protection, including social programs for Land Reform and Cooperatives.