Energy in Emerging Markets Career Talks: Government and Development Banks

Energy in Emerging Markets Career Talks: Government and Development Banks

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- This year, obviously a trip to DC was not on the cards. So instead we've had the fantastic opportunity to bring DC to all of you. And this is maybe a good time for me just to thank our fantastic host of speakers today.

So we have Sam Kwon, who's senior director for energy at the Millennium Challenge Corporation. We've got Dia Martin managing director at U.S. International Development Finance Corporation. We're very honored to have Natacha Marzolf, who is principal energy specialist at the Inter-American Development Bank. And we're delighted, last but not least to have our own Duke alumni, Alisha Pinto, MPP in 2016 who is an energy specialist at the World Bank today. And I'm gonna turn it over to them to give their introductions. So Sam, are you okay with going first? - So thank you for this opportunity.

I had a great time last time I met some of your colleagues last year, I think, or two years ago. What I thought I would share is maybe three things. So first let me share a little bit about what my day-to-day is like so that you have a sense of work at MCC.

And then a little bit about MCC and my team, the energy team. After all, this is a career panel. So I think that'd be instructive for you. And then I think I'll take a look at maybe my own career and how I ended up here where I am today. And I hope those things are useful for you. So MCC is a U.S. government agency

despite the term corporation at the end. And it's taxpayer funded. And the head of our agency is a CEO who is a deputy secretary equivalent so needs to be confirmed by the Senate.

And then the chair of our board is state. And then vice chair would be treasury. Then you have ESTR, we have our own CEO and our USAID administrator or our public board members. And then we have couple of private sector members from one side of the aisle and couple from the other. So it's a public private board. Having said that my team right now, we're managing around $2 billion worth of energy projects but we were intended to rely on the governments that we work with to handle the bulk of actual implementation of the project.

So as a result, it's a very small agency from the perspective of U.S. governor agencies we have about 300 people. Energy team has about eight of us. We're trying to add one more and here's the makeup. I am actually a lawyer by training and I'll get into my own career a little bit later, but we have couple of senior operational advisors who are both graduates of Bank of America project finance divisions.

We have bankers who understand how the money moves in infrastructure space. And they've been doing this for over 40 years of their career. And then we have three directors. Let's see, one of them is a civil engineering used to work at the New Jersey PUC a little bit as a bigotry person and was a peace Co-member. Another person went to the sys energy and policy program has an environmental background and is working on our energy matters take some of the lead on our sustainability issues.

Another director is has worked with Bonneville power association as an economics background and energy background and regulatory background and intimately familiar with power systems was at the energy department of energy. We have an associate director with electrical engineering degree and an MBA and used to manage utility in West Africa. And then we have a contractor with a special type of contract. We'll call it personal services contractor and she is civil engineer. So you see kind of the variety of skill sets that we've got. And my day-to-day is really all over the place, now that I manage the whole team.

Let me take a quick example today, I had to talk to our Nepal team, Nepal and we have a big agreement in place for a massive power program. But the Nepali politics is very complicated and it's stuck. So we are discussing, Nepali Supreme court says something about what they can and cannot do, what the prime minister can and cannot do.

So we had to strategize and what's our posture. When can we start our program? Is this gonna happen? And then I had to jump to providing a portfolio review of all our energy programs because our new vice president was a political appointee, wanting to know what's going on. And this is related to energy and climate change portfolio that I had to pull together with our teams help, because NSC wanted to know what's going on because climate change is a major objective. And then I had to jump to try to figure out whether we can pay for internal house wiring in Ghana because we have a stance that we don't try to subsidize private goods.

So there was some intense discussion on what we should do as reconnecting these small businesses to power. Do we pay for their internal house wiring or do we not? And if we don't, how can we help? So that gives you a sense of my day to day. And finally, my own career background. I immigrated to the U.S. about 30 years ago I was a teenager from Seoul, Korea and went to college studied finance and public policy.

There was a class taught by a World Bank person on East Asian economic miracle and got me interested. And a lot of my friends were either going to investment banking or management consulting. And that was what I was gonna do.

But I thought after public policy, well this law thing sounds very interesting. I'd love to be doing something that the World Bank did, what this professor did. So I applied to law schools and then I went to Georgetown for law and immediately got connected to this field called project finance which is putting money together to build infrastructure in developing countries. So I ended up going to a law firm in DC whose clients included, OPEK now called DFC USX and bank, IFC, the World Bank, a lot of these are development finance institutions.

And of course, a lot of private sector, people who are developing projects. So this was mostly in power sector. So you had what's called IPP or independent power producers and then commercial banks that are willing to lend to these projects. My first project was a coal fired barge mounted power plant off the coast of Bangladesh. That was my first project that I started learning and the privatization of a cogent facility in Korea, then MCC got created and I jumped ship. I was assistant general counsel at MCC in 2005, was working at MCC for a few years.

And then once we set up everything and kind of figured out how to do MCC stuff, my old firm call back and say, you wanna come back, we're doing a lot of work in Asia and especially in renewables. So I went back to the law firm, the same firm and then gave it a go, a lot of renewable work. The most fascinating work actually was doing the LNG export project. That was the first U.S. LNG export project

call Sabine pass to non FTA countries. And then after a few years of that and doing a lot of solo work, ended up back at MCC with the guidance of some of my colleagues who said you know what, there's this new thing called Power Africa. MCC is supposed to interface with that. We don't have a lot of deal experience. You do, you want to come back, but not as a lawyer but as an energy team member. So I came and here I am, now I'm managing the energy team at MCC.

So hopefully that gives you a bit of an idea of my career trajectory. I'll stop there. - That's fantastic. Thank you so much, Sam. I think you're the first lawyer who's spoken to us. So we're very delighted to have your experience here. Next up, I think it's Dia.

Dia are you good to speak to us next? - Yes, I am and thank you Victoria. And also thank you Sam, for your overview. It's really great to hear about your background.

So I work at the United States International Development Finance Corporation. We are also a U.S. government agency and we're a development finance institution. What does that mean? It means that we finance projects for development globally.

And this is across Asia, Southeast Asia, Eastern Europe, Sub-Saharan Africa and Latin America. I believe we're operational and over 100 countries. We have different departments that kind of showcase the different roles that we play. So we have an investment funds department that works specifically with investment funds and this is very diverse. It could be a climate or energy focused fund but it could be healthcare generalists and the like, these are typically larger private equity funds.

We have a structured finance department that does a lot of the work that Sam mentioned where they work on power projects and project finance. And then we have the department I'm in which is the office of development credit. And I work on the social enterprise finance team. I'm a managing director on that team and I think I'm different from the panelists today. And most of the panelists that you'll speak to and that I'm a generalist. I don't focus on energy, I have a very diverse portfolio and the overriding theme for all of my projects is that they have a social impact.

So I'm purely focused on impact investing. And in that role I've been able to work on some energy projects actually lead a project within the Power Africa framework that looks at renewable energy. And I would say I'm at the DFC we have about just some general facts.

We have about a $30 billion portfolio at this time. We do two to three billion of new projects a year. And we have with a structured finance team, we have individuals that are focused on energy, but we also in a lot of ways have a very kind of wide focus for most individuals.

Most individuals are generalists. So you might do a couple of energy deals but you might also do a couple of financial institution deals as well. And I just want to put a in for internship opportunities at the DFC, now is the time we're very actively searching for interns and I'd be happy to navigate that process. If anyone's interested, if you're interested specifically in energy, I can put you in the right direction but also from a generalist perspective I could put you in the right direction as well. So as a managing director, there are three on our team.

And there's also, I would say at this point 16 individuals on our team with three managing directors. And what we do is we work together on deals. So often there will be a director and myself working on a transaction or originating a project, the financing project and that leads into the day to day, which is very different which is one of the things I enjoy about my position. I love the diversity of working as an investment officer. So on any given day, I guess I will follow Sam's lead and go over my day to day, the morning started out really great. We actually have a team book club.

So we went over one of our books. We do this almost every other month. So we had a really good discussion and debated the merits of impact and different ways to value impact. Immediately following that I actually had to review a screening memo and this is one of the first memos that we do for all of our projects to determine if we have the go ahead to move into due diligence. And often this is something that our interns play a large role in is preparing the screening memo and then presenting that.

So after I went over the screening memo and provided comments the next thing I did today has been working on a transaction that's very different. It's not an energy deal. It's a development impact bond for employment. I worked on the term sheet negotiations for that. And then following that, I talked with some colleagues that I'm working with on transactions about the deals that they're working on and where they are on those transactions.

And then finally a large part of our job as well as negotiating with clients, looking at term sheets, executing deals are the financial analysis. And so I spent a bit of the day doing financial analysis and reviewing a model for another transaction. And what I love to say is there's always that diversity and experiences and the type of work that we do which is really exciting and pre COVID, one of the more exciting parts of it is that we actually go travel to see every deal that we finance. So it's really exciting to actually be able to go to the country, go to the market and see our project in action. And then I would say one of the most exciting deals I worked on is a company called Greenlight Planet. And if you're not familiar with Greenlight Planet I highly encourage you to look up the company.

It was started by three and this is the Power Africa project that I worked on. It was started by three University of Illinois students. One student was interning in India and a rural area in India and saw that there wasn't enough capacity with the electricity. So they developed the solar light that they use to provide electricity in that village.

And what happened is they begin to grow the company over time through network agents. I always compare it to agents that like back 20 years ago or whatever they would sell Avon products, they would just go door to door and sell the solar lights. So that company started in India. When we started working with them, they had about I want to say a little bit over 20 million in revenue and we're expanding into Africa. And if you follow the renewable energy space there was a huge explosion and growth with all of the PayGo energy models that allow consumers to pay for use of the product over time.

So that's a really exciting project that we've worked on and we've been able to see the business grow and develop and move from our small loan of $5 million to now they've raised close to $100 million in financing. And so those are the things that really get me excited is to see these very small companies. When we began to look at financing them grow and provide power and light and electricity. There's so many people and really develop into large global corporates. And I will pause there and happy to answer any questions in the breakout session.

Thank you so much for your time. - Thanks Dia that was fantastic. I know a lot of the students who are here today are interested in this space specifically because they're interested in the social impact. So I'm sure you'll have a lot of people in your breakout group.

Up next, we have Natacha Marzolf. Natacha are you ready for us? And we can see you. - Yes. I finally figured it out.

So I apologize that I had put a picture and I realized that now I can finally speak. Good evening everyone. I hope you can hear me well and see you well. I apologize I have my other catcher in the background but I just don't want to mess with the presentation anymore.

So my name is Natacha Marzolf. I'm a principal energy specialist at the Inter-American Development Bank Group. For those who are familiar with the IDB group IDB is comprised of three entities, IDB invest which is the private sector arm, similar to the IFC for those who are familiar with the World Bank, Bid lab which is our incubator slash innovator lab and the bank.

The bank really refers to all public sector projects that we do. We do technical assistance. We do loans in the last 10 years we have developed a lot of knowledge that we call expertise. I have prepaid a small presentation, I will go very quickly.

And then I can tell you a little bit about my background and where I am today. So I will share my screen. When I started, I could you just tell you a little bit about the IDB. I work in the energy division and the IDB is comprised of 48 member countries, 26 are Marine members.

Last year we approved over $21 billion in new financing, 12 billions in public sector loans and about 9 billion in the private sector arm. So this is just a quick presentation of who we are. So we have 26 offices that are scattered all across Latin America and the Caribbean. In particular all the countries in Latin America are a member of the bank except for French Guyana, which of course is French. And then we have Eastern Caribbean islands that are not members of the bank, but we have an office in every single country that you see on this map. We are in the energy division, similar to what you would see in other divisions of the bank.

You have specialist, usually in energy. You have engineers as well as economists and the exception as well. I am a lawyer actually, and we do have operational staff. We have consultants, and we have support staff.

I will say that in the last few years consultants are really the main categories for employment at the bank, just because of the kind of work that we do. And also because sometimes people just want to say to us for years and don't necessarily want to do a career at the bank. We had been at the bank for over 25 years. I work in both the public sector and the private sector.

I am French originally. And I also got my law degree at Harvard Law School about 20 years ago. And I've worked really in development for the past 25 years. I studied as a young professional with the bank back in 96 and I've been with the bank all this time. So who we are and what you do.

So this just gives you a very quick snapshot of the energy portfolio that we have, in particular in the last few years we have received what we call a green mandate whereby all our projects are projects that have to have the priority of green energy, sustainable energy. We do not finance on (mumbles) we do not finance coal. This is also the case for the private sector of the bank. It's mostly renewable.

And we are starting now to look into a new energy carrier which has been hydrogen that you might have heard of which is a very, very interesting, I think technology for the future. So as you can see the dark blue and the light blue which is about 50% more or less represent our projects. Our traditional projects in the bank had been mostly infrastructure project, does the importance to have people who are usually engineers but we have been moving more and more towards people who have also other kinds of knowledge. It could be people who have a science background, policy background. We do a lot of work that is also related to what we call reforms. Also, this kind of food is not always very much appreciated in the region.

When I say reform, we basically had countries also switch and enable the regulatory framework to become, market-friendly to insight more for private sector investment, and also to kind of mitigate risk that private sector would have investing in the energy sector in those countries. So very quickly we have what we call. We have a guiding document called the secretarial framework document that has four pillars. The first one is access. I'm sure for access, you're familiar that Latin American the Caribbean has 97% access in the region.

So it is not like other countries such as in Africa for example, where the access is still really a challenge. The 3% remaining in Latin America really has to do with what we call the last mile, as you are familiar with it whereby the area that still are not connected are those isolated and rural areas whereby the actual cost of connecting those communities are very high because it really doesn't make any financial sense for private sector company sometimes to even grow there. So we have been really focusing on that 3% providing is a micro grid or mini grid financing. There was a larger problem that we don't talk so much in terms of energy, which is cooking, clean cooking.

We have about 85 million people who still use charcoal right to cook, needless to say this can be an issue for a health, risk pollution. And of course it can also decrease substantially the life longevity. Sustainability, this is the second guiding principle. Sustainability in a nutshell is really financing projects in energy that truly have their own indigenous kind of resources, solar, wind, geothermal. Those are really kind of the technologies we are looking into not for gas is wonderful to be able to have backup power. So we use them to be able to complete and compensate for renewable energy generation.

Security. The next slide we'll show you very quickly. Look at the Mexico and Brazil increased demand. As you can see in Brazil, we project to have in the next 10 years by 2030, 90, 80% increase. So what does that mean? That means you need to invest in the energy sector.

You need to invest into financing the infrastructure. You need to be able to put together public private partnerships, right? To make the proposal for infrastructure interesting. Then for Mexico. And these are just very preliminary and conservative assumptions. So really very quickly, that's what I explained. The importance of security also means having electricity 24 seven not just two or three hours a day, and sometimes how you measure electricity access is not just the actual physical connection, but also can be related to how is the quality of the network.

Governance, very, very important. This is where policymakers come in, government Siskey we know that we just published a book called "The Development in the America's 2020." I highly recommend it. It's on the website which basically portrays what is the future of the sector, Latin American, the Caribbean. One of the key aspects we are looking at is how do we enhance regulatory framework? How do we make sure that services are not only accessible but they're also affordable, for example, in Chile which is a country that is a country where you have a majority of private sector actors in the energy sector is a country that has a very high electricity rate for the region. So we are very aware that governance together with having the right price I can say is very important to have a sustainable sector.

Knowledge. This is the last part. Knowledge has really become very important for the bank. All our information on our website is public and available freely. We have also just launch what we call the energy hub which is a heart that is really intending to become the data visualization center where we have partners such as international energy agency, sustainable energy for all, arena or Laddie and other agencies where we are basically working in a partnership to showcase our day data. And that's the different indicators.

We can show you for example how the energy sector is developing in Latin American and the Caribbean. Key initiatives, beyond just projects. We also are very proud to work in regional integration. In Latin America we have at least five, we have the Caribbean, central America, Southern cone as well as what we call the Andean region which is Columbia, Mexico, Ecuador, and Peru. Gender. Gender has become a key topic in the last two years.

We have really increased our call for gender actions in particular. And for example, we are helping countries first for example, just put gender on the map, right? Just telling them look, gender and diversity is key. If you want to have a sustainable sector, if you want to promote increase, you need to reduce the gap between men and women but also diversity. So this has really become very important today.

All of the projects that grow at our board need to have a gender and or diversity component and it can go from having a policy where you have a ministry that is going to look into how can increase more diversity and more inclusion and close the gender gap to having, for example measures that governments will take, where do we put for example quotas, we have for example women trained or to offer certain programs in universities to have more women in STEM. We need a very, very nice video, which is called in Spanish (speaking in Spanish) which means I want to be an engineer where you have a small little girls who really talk about the fact that they want to become engineer. And it's kind of breaking the mood and kind of the image of this, just being mostly a masculine sector. Innovation, that's the last part, which I think is very important.

We know innovation is not always very easy as a development bank we are quite risk adverse, usually for innovation we're really trying to move forward in that aspect. So we are looking for example as new technologies such as green hydrogen, we are also looking at fuel cells. And then we also looking of course, into, having countries develop some of their innovation is policies with technologies that help them to kind of be able to move forward. So this is it on my end for the actual presentation of what we do. And just to finish up a little bit on me.

So as I mentioned, I have been at the bank for over 25 years. I worked in both the public and the private sector. So I actually started working at the bank when I started as a young professional working on what we called a civil justice reforms since I'm the lawyer, part of the work that we did at that time was the bank was very heavily involved back in the late nineties into trying to help countries to switch from a criminal system justice system. That was mostly based on the network and the code to the American system.

So that's pretty much what I studied really justice reforms in central America. And then I moved on to private sector where we did mostly project financing and structuring financing. In the last 10 years I've been in the energy sector on the public sector side. So with this, I will stop talking and happy to answer any questions.

Thank you. - Thank you so much, Natacha with 25 years of experience, we're very lucky to have you sharing your experiences with us. I'm sure there'll be a lot of questions out of that one but before we move on to Q and A last but not least, Alisha are you able to present for us? - Yes. Hi, thank you.

I'm gonna also share my screen. Great. Thanks Victoria an thanks Stacy for inviting me here, I'm always delighted to come back to Duke and talk to the students and share my perspective. And it's great to be at the Duke energy initiative as well. It's my first time participating.

So it's a good opportunity to also meet other young aspiring energy sector future policy or other sector specialists. So I am an energy specialist within the energy sector management assistance program which is one unit of the World Bank. And I started here in 2016 after I graduated from the Sanford school of public policy. My focus there was on energy and environmental policy.

I was really interested in energy access and so it was a very great, very easy and opportune shift to energy working on energy access within the World Bank. I started out for the first two years as a consultant, a short-term consultant working on these large household services called multi-tiered framework household service. I conducted two of them in Nepal and Liberia which were looking at energy access at the household level but also studying access for many good operators, access for enterprises. And this was very interesting because I got to go to the whole process of gathering the data doing the analysis, writing a report and presenting it to the government and teams within the World Bank.

And now I'm currently working as an energy specialist on the Clean Cooking Fund which is newly launched fund within ESMAP. And it focuses on accelerating access to clean cooking and the World Bank and ESMAP in particular is we're one of the custodians for sustainable development goal seven which is access to energy. And so what I wanted to do, and I'm very happy that Natacha went before me is take it to what ESMAP is within the World Bank framework and kind of then walk into what might the Clean Cooking Fund is.

And then I'll talk about my role within the Clean Cooking Fund and what I do on a daily basis. And I want early go very in-depth into the World Bank because I feel like a lot of these concepts are covered or maybe you know about it. But just very briefly, I want to talk about where ESMAP fits within the World Bank. So say the World Bank has goals or they're called STG seven goals.

And each country decides what the outcome is for 2030 and the country government maybe has some outcomes. Private sector has outcomes, but the World Bank along with the country government decides what together what are they trying to achieve? And the World Bank finances projects and there are different financial instruments that are used. So for example, you can see in the 30th on this chart and sites like a a bit of not so fun chart, but bear with me there are different kinds of financial instruments and we can go into that later but these are different financial instruments that the World Bank uses to provide project financing to country governments. And so where does ESMAP fit in? So ESMAP provides analytical services and advisory. It helps develop projects or projects to finance governments.

It works on policy dialogue between different development partners, bilateral donors with the country clients, the governments we work with. And then it also has this convening pass. So for example, we're working on the high level dialogue for energy which is coming up in September this year at the UN.

So given that structure, let me just walk you through a little bit what that means. So for example, if there's income alone 40% of the people don't have access to electricity or there's a share of the population that doesn't have access to clean cooking. That's the higher level outcome.

With the government together with the World Bank decides on a set of different projects that it needs financing for. So maybe over a period of 10 to 15 years they want to have a project that supports a regulatory environment. It might support a new generation project on hydropower. There might be also with it, say some capacity building or technical assistance as we call it. And that's where the World Bank or the ESMAP within the World Bank fits in.

It provides financing to help with capacity building, help with putting propelling the project before the project is financed. Okay. So one last complicated chart before we move into what I do on or what my project is about. So we'll start on the left and talking about where the energy sector management assistance program fits in.

So you have it's funded. So it's a partnership within the World Bank and donors. So we have bilateral donors such as the Netherlands, Norway, Denmark they've all provided financing, sometimes specific financing for certain projects, but other general financing for ESMAP's targets and business plan that it's put forward. And then that financing is current financing that goes to our country teams.

So within the World Bank we have energy sector partners and colleagues who are working in specific regions and countries. And we provide grant funding to them to prepare their projects. We also support country teams when they're preparing their project.

So we provide input and help them with the design. We're part of the project team as well when they're planning the project. And so that's the process.

And then you move to the third one, which is activities. And this kind of gives you an idea of what the different activity is in detail. So we do client... So the financing that we give to country teams goes towards say, client engagement. It goes towards country workshop, stakeholder consultations.

It goes towards project preparation but then there's some financing which we within our team within the ESMAP team, we manage ourselves. So that goes towards we do data and analytical work. We have different kinds of knowledge products given our vast or global outlook. We try and come up with reports that kind of take stock of what's happening around the world in a particular sector. So for example, last September, my team launched the state of access to modern energy cooking services report which is a report that comes out every two years.

And it kind of goes over what happened at the demand level, the supply level, what our international partners doing, what our government is doing, what we need to look at for the future. And then in the second to last segment you have the outputs and these are different. This is what exactly that output is. It could be a road map for the government.

It could be pre-feasibility study. It could be some surveys results. And these are the heck to that. The governments of different countries as directed maybe it be useful for the private sector or developing partners. And finally it translates into the results that we try and show as ESMAP. So coming to what I'm a part of it's the Clean Cooking Fund.

So we launched it at the UN climate summit in 2019 and it's a $500 million fund that is meant to catalyze and accelerate access towards clean cooking. So the idea is that we're leveraging investments from the World Bank by providing grant funding to the Clean Cooking Fund, we're trying to catalyze innovation and different businesses technologies, as well as link incentive payments with verified results at the output outcome and impact level. So clean cooking is an issue.

It's not only an energy issue, it's a health issue, it's an agenda issue, and it's a climate issue. And it's really crucial, especially today when we're looking at the health impacts with COVID-19, you see people are move vulnerable because of household air pollution but also when you're thinking about the future of climate change and deforestation and people using traditional fuels and stoves to cook. So how does it actually work or how we organize, a majority of the financing goes towards the two pillars. And the majority of the financing goes towards pillar one where we work with country project teams, supporting them to result based financing as well as technical assistance so that we create like an enabling environment which is basically looking at how the entire system needs to be addressed so that we can achieve the goal of clean cooking in a particular country. And then we also have some grants that teams can apply for to prepare their projects.

So if they need some studies, they need assessments and they need to understand what the market is like. They can apply for grants and that'll help them before they prepare a project in a country. And then on the second pillar is, I work on knowledge innovation and policy coordination. So basically the knowledge products we come out with, that we're trying to have an innovation fund and work with different partners. So that's a lot of fun information and that's a bit of an overview, but I've spoken to students in the past and I always, I feel like also when I was a student I really didn't know where ESMAP or some of these smaller things within the World Bank, how it all worked and how it all fit together. And I thought it would be a good way to just kind of step back and say, okay, what does it mean? Like what all these acronyms mean? So on a day-to-day basis, so I work on two different things.

One is the overall setting up of this fund, the Clean Cooking Fund, because it's relatively new. So we're still fundraising. So we still talk to donors and talk to different development partners about fundraising but we also have projects. So for example, in December the last year. So in September last year, we had our first project in Rwanda that was approved by the World Bank board.

So it was 10 million that was allocated from the World Bank budget, and then $10 million that we co-financed, our project co-finance. And it has a result base financing facility. That I'm in the process of helping the government, supporting the government in setting up. So the project, it was financing this result base financing facility and also provided technical assistance and capacity building to the country. So there are similar projects that we're working in in different countries.

And I'm a part of some of those country programs supporting the teams that help the government prepare these projects. So working in Rwanda, in Mozambique, in (mumbles). And then along with that, we have the knowledge pillar or pillar two where we try and take stock of what data do we have, what is needed for the sector to move forward? What are the longterm planning tools that we need? So we're trying to develop, for example, I mentioned one of the reports that I helped develop last year some of the outputs from there are data points. And we work with some of my colleagues who have set up an energy data website which is a hub for data.

So we try and make all our data public, but also put it in a way that's easy to access user friendly but also helps governments and different stakeholders use it. And then the last part is working on policy coordination. So working with partners like the Clean Cooking Alliance, the WHO, the World Health Organization, different bodies within the UN discussing energy access policy, discussing or say COP 26, the upcoming COP, how do we work together to see that at a global level at a regional level and at a national level we're coordinating.

And we're trying to push forward this agenda on clean cooking. So I'll stop there and happy to answer any more questions later. - That's fantastic.

Thank you so much, Alisha. I completely agree. I think that it's helpful to find out where exactly ESMAP sits in the World Bank.

And so honestly all of you giving such fantastic overviews of the organizations you work for. It's very beneficial for the students. I'm gonna open it to Q and A for the next 10 minutes or so.

So students are welcome to throw questions in the chat or raise their hands and I can call on them like we're in school or something, but oops we already got a question in the chat. All right. So Abby is asking, I'm curious if any of your institutions have plans to increase climate finance as a percentage of your portfolio by 2030 and or if climate goals will be increasingly tied to the disbursement of funds. Does anyone wanna take that question on? - I can take it for the DFC. One of the things is as a government agency with each new administration we have a change in our leadership. And our understanding is that one of our strategic priorities will be climate finance and we'll be looking to increase our portfolio in that area.

And also as Natacha mentioned we are definitely interested in looking at the intersection between gender and finance as well. So I'm super excited about that and there will be more to come. - So if I may chime in, so at the IDB actually we have been doing climate financing for the past I think at least five, seven, eight years. We do have a target do not quote me, but I believe 70% of our operations should have the climate finance seal. So this is definitely part of the work that we do. For example, I'm working on an operation now in Chile where we are helping them to transition to a more enabling framework with greener energy.

And we look at each project and we have a methodology that needs to be followed where you basically apply, the climate finance methodology. It's not an IDB methodology it's actually a multilateral development bank methodology. And that is shared, I believe, with all the other banks such as the World Bank (mumbles).

I believe at this juncture pretty much all our portfolio in particular infrastructure is extremely linked into climate financing so yes. - I can come in very briefly. We also have specific targets at the World Bank on say climate, we have climate targets but also at ESMAP, there is climate financing.

And for one of what we're trying to do with the Clean Cooking Fund is also leverage some of the climate financing that's available because a project with clean cooking especially moving households from traditional stoves to improved or clean stoves generates a lot of climate benefits. - We don't have present plan. As Dia said, we will see how this plays out in MCC context. - Fantastic. Thanks all. Nick I see you have your hand raised. Do you wanna ask question? - Yes, first of all, thank you all for coming in and presenting to us.

We really appreciate it. I have a question specifically for Natacha, could you elaborate on how the IDB is looking at green hydrogen for current or future projects? - So green hydrogen is just starting. I'm sure you know about that. I mean, I see the European Union as allocated I don't know if it's more than a billion or not in research and development for green hydrogen.

So we know there are private sector companies that are already really investing a lot. For us the green hydrogen is an area where we are just studying with green hydrogen. So for example, we have several countries that are very interested in developing their potential market for export of green hydrogen, for example, Costa Rica which is 100% renewable based, Uruguay which is also 100% renewable based, Chile, Paraguay, green hydrogen in particular is of utmost interest for those countries where they have a very, very strong generation that is based on renewable such as solar or wind, because by definition they become very competitive having the lowest cost for renewable that can be used to produce green hydrogen. And in the global scale, I mean, some of the countries that for example, import hydrogen and mostly Japan.

So the bigger markets now are Japan or Australia, and those are the ones that I know of. - Thank you. - Thanks. Yezi you have a question? - Yes. Sorry. I might call you. Okay, sure.

So thank you all. And I just have a question about in terms of the disbursement of the funds, I'm wondering, do you guys have any mechanisms or Bezos or KPIs you could ensure the real disbursement to the end customers or the last mile customers, especially in the rural areas, 'cause I felt it's kind of difficult to make sure the funds are really reaching people in all those last mile areas. - Great question.

Go ahead. - I'll share a little bit I don't think disbursement is the right metric for MCC. We disburse our funding to the government, we then spend it by paying for services whether it's construction of say a transmission line and a distribution line to take the electricity to that rural customer. So that's how we would approach it now to get at your question more directly how do we ensure that people in rural areas get power? For example, at MCC we engage in something called economic rate of return analysis.

And it's how it works out. If we go to a village that has only 1,000 people but it's gonna cost us many millions of dollars to extend the line, then the economic return isn't there. So we would work with the government to see if there's a different approach where it's cheaper but still get them power.

It used to be not a lot of great options, but with some mini grids that are fairly robust in delivering power, we are able to do some of those things. So that's one way MCC approaches it. And by the way, our funding is a grant to the government but I'm sure IDB or World Bank has a very different way of dealing with it. - We consider ourselves banker. So our funding would go directly to the company and we can provide financing in the forms of debt or equity. We have a separate technical development program to assist with more of that technical assistance or consultants for our project.

And so when we make our investment in the company in the form of equity or debt, for all of the projects that I work on that are impact focused, we have certain metrics and reporting and requirements for those companies. For example, for Greenlight Planet we tracked the sales of solar lighting customer penetration, whether it's in a rural or urban area, what country as well as different indirect metrics that they would track on their own business. And that's what we do across the board for multiple deals is determined the most important metrics for that project and that project impact and track that in our regular reporting for our financing instruments.

- So I'm happy to answer for the IDB. The IDB well, we do have we work very similar to what Samuel mentioned. We mostly do loans. I mean, we use technical assistance to either be able to do feasibility study or pre-feasibility studies before a project can actually be built.

But most of our work is of course lending related. In terms of access the way we work is we look at, for example the access plan that a country has, the long-term plan. We look at what is it that they're trying to build? And usually it's exactly how it's similar described it meaning we will be providing loans directly to the government and then the government will be doing the bidding process for the company that will be installed into micro-grid or mini grids. Usually for that last mile, the extension of degree doesn't make any financial sense is just too expensive.

So the micro-grids or mini grids in particular in the Caribbean Islands that an insular geography this is how we would do it by micro-grid or mini grid that makes the most financial and bankable sense. - And just to quickly add on the World Bank side, it's similar to what Natacha and Samuel mentioned. We provide financing to the government and then we try and ensure that there are checks and balances in place especially on the financial management side that this constant reporting monitoring and evaluation especially when we have this is our space financing system set up that's regular monitoring and evaluation either from the private sector or even within the government back to the World Bank. - Fantastic. Thank you guys so much. I know we have more questions in the chat but I think we need to move over to the breakout groups now.

2021-04-06 20:22

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