Drawing on its experience in utilizing debt, equity and risk mitigation products in the past, the GEF has launched a launched a $136 million Non-Grant Instrument Program in GEF-7 to demonstrate the application of innovative finance models to combat global environmental degradation.
The GEF offers attractive financial terms as follows:
Financial terms for private sector:
- Flexible concessional interest rate;
- Minimum level of concessionality to avoid displacing other finance;
- First-loss position if justified;
- Maximum maturity of 20 years;
- Flexible exit date for equity investments.
Financial terms for public sector (LDCs/SIDS and Other Recipient Countries):
- Grace period of 10 years;
- Interest rate of 0.25% or 0.75%;
- Maximum maturity of 40 or 20 years;
- Principal repaid in equal annual payments after grace period.
- Private Sector
GEF-6 Non-Grant Instrument Portfolio
The GEF has approved a total of ten non-grant projects, using $91.2 million in GEF funding and attracting $1,689 million in co-financing through January 2017. This includes eight full-size projects and two medium-size projects. The full-size projects covered a full range of modalities, including four equity investments, one private sector loan, one risk guarantee, one reimbursable grant. The medium-size projects use debt-aggregation and blended finance. Short summaries of each GEF-6 non-grant investment are provided below.
The resources can be used for projects that deliver global environmental benefits in one or several of GEF’s areas of work, including biodiversity, climate change, international waters, land degradation and chemicals and waste management. The funding cap for a typical project is set at $15 million.
Proposals are especially encouraged if they: (i) demonstrate innovative application of financial mechanisms, business models, partnerships and approaches that may be broadly adopted and can be scaled up; (ii) entail high levels of co-financing and focus on areas other than climate change.
GEF Partner Agencies can submit project proposals on behalf of private and public sector recipients to the GEF.
Applications for the $136 million Non-Grant Instrument Program follow the procedures described in the GEF Council document GEF/C.42/Inf.08, Operational Modalities for Public Private Partnership Programs.
For further information, please contact an eligible GEF Partner Agency or the GEF Secretariat:
- Lead - Avril Benchimol Dominguez, Senior Financial Specialist: firstname.lastname@example.org