Oficial Senior de Desarrollo de Capacidades, FMO, Holanda

1. FMO
GREEN LINES
FINANCING SUSTAINABLE COMMUNITIES, 25 AUGUST
Andrew Shaw Senior Capacity Development Officer

2. THIS IS FMO
2015 performance:
858,000 Jobs
supported
Objective
Double the expected
direct and indirect jobs
supported through our
annual new investments
in the period 2018-2020
compared to the baseline
period 2010-2012
Baseline 2010-2012
500,000 expected direct
and indirect jobs
supported
2015 performance:
936,000 GHG
avoided
Objective
Double the expected
GHG emissions avoided
through our annual new
investments in the period
2018-2020 compared to
the baseline period 2010-
2012
Baseline 2010-2012
600,000 tons GHG
avoided

3. Banking could do very well as the world moves toward a low-carbon economy. There will be
lots of business opportunities. . . . [B]ankers are particularly strong in this area. They have
been very creative over all kinds of issues and they could do it again in the financing of green
initiatives.
Lord Stern, World Economic Forum, Davos 2009
3

4. THE OPPORTUNITY
4
Financial Institutions
• Future oriented / responsible corporate citizen
• Being a partner with a differentiated value
proposition to your clients
• Attracting new clients & cross-selling
opportunities
• New business lines and new funding
opportunities
• E&S risk management and the credit process
End Clients
• Reduced operation costs
• Reliability of energy supply
• Reputation advantages
• Improved access to global supply
chains
• Identifying modernization opportunities

5. FMO GREEN JOURNEY
deliver
added value
product development
co-finance
learn

6. Thinking behind Greenline Product Development
PRODUCT DEVELOPMENT
Aspects to consider
Eligibility Criteria
• Predefined vs. tailor made
Pricing & conditions
• Preferential interest rates?
• Long tenors
• Risk sharing
Capacity Development / Technical Assistance
• Required by both FIs and end-users (SMEs)
• Many DFIs offer TA funded through donor funds
Monitoring/Reporting
• Tools to monitor energy savings, GHG emissions
and other environmental benefits
MARKET CONDITIONS
Aspects to consider
Macro Economy
• Investment Activities and Climate
• Funding costs for banks
• Market Potential ≠ Demand
Regulation
• 2015 Paris Climate Accord
• Housing/construction: building codes & energy labeling
Local Factors
• Electricity cost and reliability
• Climate change and weather patterns – e.g. water
usage
• Taxes, subsidies and other incentives
• Supply chain standards and certification
GREEN FMO experience

7. EXAMPLES endorsing 'green' business in Latin America
Grupo Promerica
Banco BAC San Jose S.A.
• First greenline with Banpro in Nicaragua in 2014
• Focused on green modernization of agriculture
• Partnership with CPML for technical expertise
• Now rolling-out to other countries (incl. ECU)
• Expanding partnership with CPMLs: market studies,
training, product development, promotion
• Kick-off workshop in Costa Rica
• June 2016, USD 20 million green line facility
• Costa Rica policy: carbon neutrality by end 2021
• Renewable Energy, energy efficiency, green
buildings, water, sustainable transport
• Partnership with technical advisors and Green
Building Council Costa Rica
• Greenline tool for verification and reporting

8. Where to start building a the green business
ASSETS
Aspects to consider
LIABILITY
Aspects to consider
GREEN Where to start from an asset / liability perspective
EQUITY
1. Build green loan book
2. Build green deposit products
3. Issue Green Bond:
a) Use green asset book to
create value
b) Diversify investor base
c) Longer tenors

9. TAKE AWAYS
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Market conditions
Clients
Capital market
Innovation