Global Energy Efficiency and Renewable Energy Fund (GEEREF)
What is the Global Energy Efficiency and Renewable Energy Fund?
GEEREF is an innovative fund of funds, providing global risk capital through private investment for energy efficiency and renewable energy projects in developing countries and economies in transition.
GEEREF aims to accelerate the transfer, development, use and enforcement of environmentally sound technologies for the world's poorer regions, helping to bring secure, clean and affordable energy to local people.
GEEREF is both a sustainable development tool and support for global efforts to combat climate change. It is sponsored by the EC, Germany and Norway with support from the European Investment Bank (EIB) and the European Investment Fund (EIF).
GEEREF is a European Commission project sponsored by the Directorate General for Environment and Directorate General for Europe Aid Co‑operation(AIDCo).
The project was announced by European Commission and EIB at the global climate conference in Bali in December 2007 for an overall investment amount of EUR 150m, EUR 80m of which will be funded by the Community budget.
Geographical scope
GEEREF will give special emphasis to serving the needs of the ACP, a group of 79 African, Caribbean and Pacific developing countries. It can also support regional funding in Latin America, Asia and neighbouring states to the EU. Priority will be given to investment in countries with policies on energy efficiency and renewable energy that are conducive to private sector engagement.
GEEREF was registered Official Development Assistance (ODA) by the OECD Development Assistance Committee (DAC).
Benefits
Investments could bring almost 1 gigawatt of clean energy capacity to recipient countries, providing sustainable energy services to 3 million people and saving up to 2 million tonnes of carbon dioxide emissions. These investments would also reduce air pollution and create jobs and income.
Beneficiary projects
Within the technological and geographical scope, GEEREF supports renewable energy and energy efficiency project developers and small and medium-sized enterprises (SMEs). The fund focuses on projects below €10 million, providing valuable investments and filling a substantial gap in the market. Only projects that meet strict investment criteria can qualify for GEEREF funding.
Technological scope
GEEREF will support a broad mix of energy efficiency and renewable energy projects and technologies, such as small hydropower, biomass and on-shore wind farms. Solar power could also provide stable energy solutions for remote areas.
Fund structure
GEEREF is a public-private partnership, offering risk sharing and co-funding opportunities for commercial investors and public investors. It will invest in private equity funds that specialise in providing equity finance - financing in return for shareholdings - to small and medium-sized regional projects and enterprises. These funds will be required to demonstrate that the projects they invest in contribute to the aims of GEEREF, are financially viable and in line with market standards.
Fund size and potential
The funding target for GEEREF is € 200m, pledges received already total around € 110m. Through private sector involvement either at the level of target funds or final beneficiary projects some €1 bn could be mobilised.
Sources of funding
The EC, Germany and Norway have committed funds to GEEREF. In addition, several international financial institutions and commercial organisations have also expressed interest in co-financing GEEREF.
Making it work
The EIF has assisted sponsors in setting up and launching GEEREF. EIF and EIB will select the investment opportunities, monitor the investments and raise funding.
GEEREF is managed under the responsibility of the EIB Group, combining the sector and country know-how of the European Investment Bank (EIB) in financing projects outside Europe and the know-how in financial structuring and private equity of EIB's affiliate, the European Investment Fund. The European Investment Bank (EIB) supports the political and strategic objectives of the European Union by granting long-term loans for economically sound investment projects. The EIB shareholders are the 27 EU Member States. Outside the European Union, EIB has been active in the financing of renewable energy and energy efficiency projects. Under the Investment Facility and the facility for the Mediterranean neighbourhood countries FEMIP, EIB has provided financing to the private small and medium sized sector.
The EIF is an international financial institution and Community body specialising in risk financing for SMEs through the investment in private equity funds and the issue of guarantees. The EIF is presently invested in 290 private equity funds with total commitments of over EUR 4.5bn. The EIF is also providing advice on structuring financial support for SMEs in the context of the European Funds for Regional Development. The EIF is rated AAA and has the status of a multilateral development bank.
What happens next?
GEEREF is expected to make its first investments in early 2009.
GEEREF is investing in tomorrow - Investments by GEEREF will aim to:
- reduce poverty through access to sustainable energy services
- cut greenhouse gas emissions
- achieve an attractive return for investors
More information
"Mobilising public and private finance towards global access to climate-friendly,
affordable and secure energy services: The Global Energy Efficiency and Renewable
Energy Fund" COMMUNICATION FROM THE COMMISSION TO THE COUNCIL AND THE EUROPEAN PARLIAMENT COM (2006) 583.
Contacts:
European Investment Fund European Investment Bank
96 boulevard Konrad Adenauer 100, boulevard Konrad Adenauer
L-2968 Luxembourg L-2950 Luxembourg
Tel: +352 42 66 88 1 Tel: +352 43 79 1
For further information please contact the EIF's GEEREF team: geeref@eif.org