Report of the Conference on Involving Private Investors in the ...

Report of the Conference on Involving Private Investors in the ‘Horizon 2020’ Initiative 22-23 October 2007, Athens Prof. Michael Scoullos, Chairman MIO-ECSDE and GWP-Med Brussels, 18 January 2008 Conference on Involving Private Investors in the ‘Horizon 2020’ Initiative Background / Milestones  2003: Based on the findings of the Transboundary Diagnostic Analysis (1997), UNEP/MAP‟s Strategic Action Programme (SAP MED) identifies 131 “Pollution Hot Spots” in the Mediterranean Conference on Involving Private Investors in the ‘Horizon 2020’ Initiative Background / Milestones (cont‟d)  November 2005: the partners to the Euro-Mediterranean process committed to "endorse a feasible timetable to de-pollute the Mediterranean Sea by 2020, while providing appropriate financial resources and technical support to implement it, using the Mediterranean Strategy for Sustainable Development and exploring possible areas for co-operation in this regard with UNEP" November 2006: Meeting of the Euro-Med Ministers of Environment in Cairo - Launch of the EU „Horizon 2020‟ initiative that aims to tackle the top sources of Mediterranean pollution by the year 2020. - Cairo Ministerial Declaration where the Euro-Mediterranean Ministers of Environment notably “urge banks, other financial institutions and CleanTech Venture Capital Funds to participate in this endeavour”. June 2007: At the 1st Meeting of the Horizon 2020 Steering Committee, in Marrakech, announcement of the Conference on Involving Private Investors in Horizon 2020, to be held in Athens on 22-23 October 2007.   Conference on Involving Private Investors in the ‘Horizon 2020’ Initiative Objective & Scope of the Conference The Conference, jointly organised by MIO-ECSDE, EPE, GWP-Med, MedCities and IME, with the support of the EU Commission, UNEP/MAP, the Hellenic Government, MED EUWI, the Coca-Cola Hellenic Bottling Company and Coca-Cola Hellas, was held at the Divani Palace Acropolis Hotel, in Athens, on 22-23 October 2007. Its objective was to identify and explore – for the first time – the following aspects, of critical importance to the successful coordination and implementation of the „Horizon 2020‟ endeavour:  key financing needs and main regional financing initiatives in the region  opportunities and ways for investors to get involved in the initiative  private investors‟ prerequisites and expectations  potential synergies between all interested partners (EU, Governments, international and regional organisations, public and private banks, cities, SRI funds, etc.) Conference on Involving Private Investors in the ‘Horizon 2020’ Initiative Target Audience - Participants The Conference gathered more than 80 participants representing the keyplayers in the process (EU Commission, UNEP/MAP, GEF) and the following main targeted sectors:  the public and private financing/ investment sector, including: - International Financing Institutions (i.e. EIB, WB) - bilateral and multilateral donors (i.e. AFD, FFEM) - private investment banks (Banque Populaire, ABN AMRO) - sustainable investment funds, pension funds (EUROSIF)  as well as entities especially in the waste water treatment and waste management sectors, which require financial support in order to implement the necessary de-pollution measures and/or adopt cleaner technologies, i.e.: - private operators in WSS and SWM (i.e. Suez Environnement) - local authorities, municipalities (MedCities) - industrial facilities, water utilities - SMEs in coastal regions and/ or sensitive areas Conference on Involving Private Investors in the ‘Horizon 2020’ Initiative Themes of the Conference 1.  The „Horizon 2020‟ initiative and financing the de-pollution of the Mediterranean Mapping of the activities of the key-players contributing to financing the depollution of the Mediterranean, particularly Horizon 2020, in order to determine  the priorities for the achievement of this endeavour  the needs for the joining in of private finance. Placing of the Horizon 2020 initiative in its larger context:  European Neighbourhood Policy (ENP and ENPI)  UNEP/MAP‟s Priority pollution Hot Spots and National Action Plans.  EIB‟s FEMIP and Study on the Mediterranean Hot Spots Investment Programme (MeHSIP)  MED EUWI  Conference on Involving Private Investors in the ‘Horizon 2020’ Initiative Themes of the Conference (cont‟d) 2. How could private investors participate in the de-pollution of the Med? Topics explored were: - the importance of private sector participation for: viability of projects, improved service quality and coverage, management efficiency, revenues, customer services, sound WRM, etc. - the main fields of intervention (waste water treatment, solid waste management, industrial pollution, etc.), - the most suitable types of financial instruments for fostering cleaner technologies in the Mediterranean (i.e. public-private partnerships, loans, guarantee mechanisms, venture capital, paid ecosystem services, microcredits, SRI funds, etc.), - the types of projects requiring financing (i.e. WSS, SWM, large infrastructure projects, cleaner technologies and BATs for SMEs, etc.), PPPs were identified as seemingly the most appropriate formula for involving private players in the water sector (especially in the South), since they allow for sharing, thus minimizing of risks. Conference on Involving Private Investors in the ‘Horizon 2020’ Initiative Themes of the Conference (cont‟d) 3. What are private investors‟ pre-requisites and expectations? Issues/ questions dealt with: - Private investors‟ criteria and pre-requisites when choosing projects, ventures, businesses, etc. to invest in (i.e. Return on Investment, pay-back times, low risk, cost recovery rates, - Barriers to investment (i.e. lack of project‟s attractiveness, insufficient regulatory framework, etc.) - Solutions for bridging the financing gap: guarantee funds/ mechanisms, externalisation of costs, voluntary agreements between private banks and competent public authorities, enforcement of regulatory framework, screening methods to identify potential „sustainable‟ clients - Opportunities for Sustainable Financing identified in several sectors: water processing, water quality, emission trading, renewable energies, health and safety industry, SRI) - Special needs of SMEs: small size of loans/ micro-credits, low interest rates, soft loans Conference on Involving Private Investors in the ‘Horizon 2020’ Initiative Themes of the Conference (cont‟d) 4. Establishing a roadmap – creating synergies for a clean Mediterranean Participants explored the possible synergies between interested partners – illustrated by the points of view of urban entities/ municipalities and the GEF – , in view of the elaboration of a tentative roadmap and next steps: In particular the following was suggested by:  Municipalities: improved monitoring and evaluation of environmental status, enhanced capacity building, improved regulatory framework, cooperation and PPPs involving local authorities and other stakeholders, establishment of guarantee mechanisms  GEF: private sector involvement, through in particular PPPs, crucial for innovation, additional know-how, leveraging co-financing, increase efficiency of operations, positive influence on regulatory processes. Benefits for private sector: enhanced reputation/ image, promotion of new technologies, opening markets over long term, mitigation of environmental risks Conference on Involving Private Investors in the ‘Horizon 2020’ Initiative Key-points proposed and discussed • A structured follow-up of the meeting proposed in the form of a “roadmap” possibly implemented in three phases: - 2007-2009: a pilot phase for the Waste Water Treatment and Solid Waste Management sectors for 1-2 countries, - 2009-2015: full-scale implementation in one of the two sectors in selected countries - 2015-2020: expansion of projects/programmes to cover all three sectors Creation of a Task Force (open inter alia to the Ministries of Finance and Private Investors/ Banks), to prepare the aforementioned “roadmap” and catalyze action on the initiatives identified Establishment of a first list of “depollution” projects with the assistance of national/ sub-entities, and eventually Ministries of Finance Testing of the market – identification of few “champion” countries ready to move concurrently on catalyzing policy reform and leveraging private and public capital. Main criteria for the selection of countries and sectors will be the existing or emerging “enabling environment” • • • Conference on Involving Private Investors in the ‘Horizon 2020’ Initiative Key-points proposed and discussed (cont‟d)       Identification of realistic financial scenarios for the sound development of private financing and investments for depollution projects Production of operational guidelines for preparing bankable projects, competition for funding, and upfront investments by the IFIs and donors Financing of the preparation of standard models for International Competitive Bids and Private Sector Contracts for waste water and solid waste management services as appropriate Preparation of generic Terms of References for carrying/updating cost recovery studies in the waste water and solid waste sector Drafting of the Terms of Reference detailing main aspects of bankable/ viable projects in particular for Mediterranean Small and Medium Enterprises in order to assist them in submitting relevant proposals Initiating and support of the functioning of a “Circle of Responsible Private Investors” for the Mediterranean responding to existing relevant criteria Conference on Involving Private Investors in the ‘Horizon 2020’ Initiative Key-points proposed and discussed (cont‟d)  Need to draft (and submit to the Countries) an “Investment Code/ Decalogue” or something similar which describes the requirements from all sides for facilitating investment in the area of the environment and Depollution in the Mediterranean Development of capacity building for SMEs in project proposal design and submission relating to eco-financing/investment Development of courses, seminars, etc. on technical issues for banks and private investors interested in de-pollution and eco-innovation projects Addressing the link between H2020 and Climate Change as well as ecoinnovation Engineering of financial mechanism(s) to facilitate schemes encouraging private banks to lend and participate in the development of private equity in CleanTech companies of the region Launching of a pilot addressing water supply, resource efficiency and hygiene/ sanitation, expanding the means to combat Climate change through domestic offset projects      Conference on Involving Private Investors in the ‘Horizon 2020’ Initiative Conclusions – Immediate follow up  Need for and potential of the Private financing sector for the Horizon 2020 Initiative recognized  Region still lagging behind regarding opportunities and prerequisites needed for the active involvement of the Private Sector  Need to enhance the “common language” between the various stakeholders  A Task Force (TF) including the organizers and major participants of the meeting to be established that could further develop as a flexible Working Group under the H-2020 Steering Committee  The TF/WG will suggest within 2008 a concrete “road map” taking into account the key points raised and the overall report of the meeting. The establishment of criteria for the selection of „champion‟ countries and/or candidate pilot projects for private funding could be envisaged Conference on Involving Private Investors in the ‘Horizon 2020’ Initiative Conclusions – Immediate follow up (cont‟d)  Need to secure government commitment and leadership for implementing the selected elements of the road map  Additional funds/resources to be found by the organisers, including submission of proposals for projects under the DG Enterprise and DG Research (i.e. FP7 and TAIEX Programmes), the GEF, UNEP/MAP, etc.  Appropriate events to be used to enhance the enabling environment for the involvement of the private sector.  Organisation of a major conference bringing together investors, banks and other interested parties (i.e. sub-national entities) as a next step and as an integral part of the “follow up” THANK YOU FOR YOUR ATTENTION! For further information, please contact: MIO-ECSDE Secretariat info@mio-ecsde.org GWP-Med Secretariat secretariat@gwpmed.org or visit: www.mio-ecsde.org www.gwpmed.org