Auteur moral

Communauté européenne

Auteur secondaire

Résumé

"Les villes et les régions sont le niveau de gouvernement où les engagements nationaux visant à atténuer les changements climatiques et à s'adapter à ses effets sont promulgués. Cependant, l'une des principales difficultés rencontrées par les autorités locales et régionales lors de la mise en oeuvre d'actions climatiques et énergétiques dans leurs zones est le manque de ressources financières adéquates. Un tel défi est encore plus important lorsque les mesures d'adaptation au climat sont concernées, principalement en raison de la nécessité de définir clairement les concepts et les actions connexes. La conférence vise à aider les régions et les villes à définir les limites du concept d'adaptation au climat et à fournir des informations sur un certain nombre d'instruments de financement qui peuvent les aider à mettre en oeuvre des actions d'adaptation au climat." [résumé éditeur]

Editeur

Office des publications de l'Union européenne

Descripteur Urbamet

ville ;région ;changement climatique ;adaptation ;financement

Descripteur écoplanete

Thème

Environnement - Paysage

Texte intégral

Commission for the Environment, Climate Change and Energy Financing climate action: opportunities and challenges for local and regional authorities ENVE Financing climate action: opportunities and challenges for local and regional authorities This report was written by Milieu Ltd (Belgium). Main authors: Ludovica Rossi, Mariya Gancheva and Sarah O'Brien. It does not represent the official views of the European Committee of the Regions. More information on the European Union and the Committee of the Regions is available online at http://www.europa.eu and http://www.cor.europa.eu respectively. Catalogue number: QG-01-17-925-EN-N ISBN: 978-92-895-0940-4 doi:10.2863/329600 © European Union, 2017 Partial reproduction is permitted, provided that the source is explicitly mentioned. Table of contents Summary............................................................................................... 1 1. Existing climate finance instruments available to EU regions and cities .......................................................................................... 3 1.1 1.2 1.3 EU funds and financial instruments ....................................................... 3 International level ................................................................................... 8 National level.......................................................................................... 9 Bulgaria ........................................................................................ 10 France ........................................................................................... 10 Ireland ........................................................................................... 11 Lithuania ....................................................................................... 12 1.3.1 1.3.2 1.3.3 1.3.4 2. Main obstacles for Local and Regional Authorities when using climate finance instruments ........................................................ 13 2.1 2.2 2.3 2.4 2.5 2.6 3.1 3.2 3.3 3.4 Lack of awareness about climate finance options ................................ 13 Insufficient administrative capacity and technical knowledge ............ 14 Budgetary and regulatory constraints ................................................... 16 Ensuring the `bankability' of potential investments ............................ 17 Political constraints .............................................................................. 19 Challenges in meeting the requirements of EU or international funds 20 Recommendations for LRAs ................................................................ 21 Recommendations for EU policy-makers ............................................ 23 Recommendations for national policy-makers..................................... 26 Recommendations for financial actors ................................................. 27 3. Recommendations ........................................................................ 21 Annex 1: List of EU and international climate financing options 30 Annex 2: National financing for climate action .............................. 36 Bulgaria ........................................................................................................... 37 France .............................................................................................................. 39 Ireland .............................................................................................................. 44 Lithuania.......................................................................................................... 46 Annex 3: List of references ............................................................... 49 Annex 4: List of stakeholders interviewed ...................................... 58 Annex 5: Methodological note .......................................................... 59 Task 1: Desk research (part 1 of final report) ................................................. 59 Task 2: Literature review (parts 2 and 3 of final report) ................................. 60 Task 3: Interviews (parts 2 and 3 of final report) ........................................... 61 Task 4: Preparation of the final report ............................................................ 62 List of tables Table 1 Overview of EU and international climate finance options available to LRAs.................................................................................................................... 30 Table 2 Overview of national public and private funding instruments for climate action in Bulgaria ................................................................................................ 37 Table 3 Overview of national public and private funding instruments for climate action in France ................................................................................................... 39 Table 4 Overview of national public and private funding instruments for climate action in Ireland ................................................................................................... 44 Table 5 Overview of national public and private funding instruments for climate action in Lithuania ............................................................................................... 46 Table 6 Preliminary list of sources for the summary of existing climate finance instruments .......................................................................................................... 59 Table 7 Template for collecting information and examples of the existing climate funding opportunities for LRAs ............................................................. 60 Table 8 Outline of the final report....................................................................... 62 List of figures Figure 1 Overview of EU funding available to LRAs for climate change mitigation and adaptation measures ...................................................................... 4 List of abbreviations CCFT CEF CF CLLD COSME EAFRD EBRD EEEF EERSF EFSI EIAH EIB ELENA EMFF ERDF ESF ESIF ETC EU FLAG GHG H2020 ITI JASPERS JESSICA LoCaL LRAs NCFF NEFCO PDA PF4EE PPP SEAI TA UIA VIPA Cities Climate Finance Training Connecting Europe Facility Cohesion Fund Community-led Local Development Programme for Competitiveness of Small and Medium-sized Enterprises European Agricultural Fund for Rural Development European Bank for Reconstruction and Development European Energy Efficiency Fund Energy Efficiency and Renewable Sources Fund European Fund for Strategic Investments European Investment Advisory Hub European Investment Bank European Local Energy Assistance European Maritime and Fisheries Fund European Regional Development Fund European Social Fund European Structural and Investment Funds European Territorial Cooperation European Union Fund for Local Authorities and Governments Greenhouse Gas Horizon 2020 Integrated Territorial Investments Joint Assistance to Support Projects in European Regions Joint European Support for Sustainable Investment in City Areas Low Carbon City Lab Local and Regional Authorities Natural Capital Financing Facility Nordic Environment Finance Corporation Project Development Assistance Private Finance for Energy Efficiency Private Public Partnerships Sustainable Energy Authority Ireland Technical Assistance Urban Innovation Actions Lithuanian Public Investment Development Agency Summary Climate change will significantly impact cities and regions requiring local and regional authorities to take action and invest in mitigation and adaptation measures. Nevertheless, local and regional authorities face various obstacles in accessing and using public and private climate finance. In this context, the current report aims to inform the European Committee of the Regions in the preparation of its opinion on `Climate finance: an essential tool for the implementation of the Paris Climate Agreement' and answer the following research questions: What are the main international and national funding opportunities for climate change mitigation and adaptation measures available to EU local and regional authorities? What are the main obstacles faced by local and regional authorities in accessing and using such funding opportunities? How can the identified obstacles be overcome? The structure of the report follows these three research questions. Namely, Part 1 presents an overview of EU and international climate finance available to EU local and regional authorities, as well as national financing opportunities in four selected EU Member States. Part 2 analyses the obstacles that local and regional authorities can face in accessing climate finance, while Part 3 presents a series of recommendations on how to overcome the obstacles identified. Specific recommendations are developed for local and regional authorities, EU and national policy makers, and financial actors. The report is based on desk review of relevant finance options, literature review and interviews with stakeholders. 1 1. Existing climate finance instruments available to EU regions and cities This section presents a brief outline of existing climate finance instruments available to local and regional authorities (LRAs) in the EU. An overview of finance options at the EU and international levels is provided. This is followed by an outline of finance options available at the national level in four selected Member States. Both public and private sources of funding are included. Investments in mitigation and adaptation measures are both considered. The information in this section is based on a desk review of publicly available sources and relevant literature (for a complete list of references see Annex 3). The climate finance options at EU, international and national level presented in this section are summarised in overview tables in Annex 1 and 2. 1.1 EU funds and financial instruments To address the challenges of climate change over the coming decades, significant additional resources will need to be made available for climate action. For local and regional governments, who are often central to both climate mitigation efforts and adapting to climate impacts, climate finance is crucial as it can kick-start investments in mitigation and adaptation measures and leverage additional private investments1. In recognition of the vast investment needs, the EU has committed at least 20% of the EU budget for the 2014-2020 period to climate action. Within this budget, several EU funds are available to LRAs to finance climate change mitigation and adaptation measures. Support is available in the form of non-repayable grants, financial instruments, and funding available for Project Development Assistance (PDA) and Technical Assistance (TA), as well as advisory services for some specific EU funding instruments. Figure 1 presents an overview of the EU funding instruments available to LRAs to finance climate change mitigation and adaptation measures. EU financing instruments that support climate action but are directed specifically to other actors, such as enterprises (e.g. COSME) or infrastructure project promoters (e.g. CEF), are not included in the scope of this report. 1 European Environment Agency, 2017, Financing urban adaptation to climate change, EEA Report No 2/2017; and Ecofys and DIW Econ, 2016, How can EU climate financing be improved to achieve the 2030 climate and energy targets? Discussion paper, 9 May 2016. 3 Figure 1 Overview of EU funding available to LRAs for climate change mitigation and adaptation measures Note: Where relevant, the managing body of the fund/ facility is indicated in parentheses. Source: Own analysis. The European Structural and Investment Funds (ESIF)2 represent an important source of funding for LRAs to tackle climate change issues. Although, in principle, each part of the ESIF can support both climate change mitigation and adaptation measures, some funds concentrate more on mitigation while others focus on adaptation. The European Regional Development Fund (ERDF) ­ including the European Territorial Cooperation (ETC) objective ­, the Cohesion Fund (CF) and the European Social Fund (ESF) contribute mainly to finance climate change mitigation measures3. Conversely, the European 2 European Commission, European Structural and Investment Funds, viewed 1 August 2017, https://ec.europa.eu/info/funding-tenders/european-structural-and-investment-funds_en 3 To track the contribution of the EU budget to climate action, the Commission applies the following climate markers (based on the OECD Rio Markers): 100% for expenditures whose primary objectives is climate action; 40% for expenditure where climate action is targeted but not as the principal objective of the expenditure; and 0% for expenditures that do not target climate action. Although in the ex-ante application of the markers, it is considered that the ESF will not contribute to climate action (see European Commission, Tracking Climate Expenditure), projects that contribute to climate objectives can be financed by the ESF (see European Commission, Potential for climate action in ESF). The exact extent to which the ESF (or other funds where 4 Agricultural Fund for Rural Development (EAFRD) contributes more to adaptation measures. The European Maritime and Fisheries Fund (EMFF) contributes to climate action in general.4 Funding from the ESIF can be provided in the form of grants or financial instruments to the final beneficiaries through Managing Authorities in the Member States which co-manage and implement the ESIF in each EU country. Specific programmes under the ERDF are available to support local climate measures. The European Territorial Cooperation objective5 (ETC, or INTERREG) can support joint climate actions undertaken by local and/or regional governments across different countries. Within INTERREG, the URBACT III programme aims to support sustainable integrated urban development in cities across Europe by promoting cooperation and knowledge exchange6. INTERACT III provides advice on several issues, including on how to use financial instruments under INTERREG7. The ERDF also finances the CIVITAS programme and Urban Innovation Actions (UIA). CIVITAS is particularly designed to support sustainable urban mobility in the EU, while UIA supports new solutions for urban challenges that range from integration of migrants to energy transition.8 Both these programmes are potential sources of climate finance for LRAs. Advisory services are available to beneficiaries seeking to access ESIF. JASPERS (Joint Assistance to Support Projects in European Regions) offers support to authorities and promoters in the preparation and implementation of ESIF projects9. With the recent increase in the use of financial instruments under ESIF, a specific advisory service, FI-Compass, is available to Managing Authorities to support them in using FIs. Previously, non-grant ESIF financial instruments for sustainable urban projects were supported through JESSICA (Joint European Support for Sustainable Investment in City Areas), which provided equity investments, loans and guarantees10. climate action is not the primary objective) support climate action will be known only after the end of the current financing period (2014-2020). 4 COWI, 2016, Mainstreaming of climate action into ESI Funds ­ Final report, European Commission DG Climate Action. 5 European Commission, 2015, Regional Policy, European Territorial Cooperation, viewed 1 August 2017, http://ec.europa.eu/regional_policy/en/policy/cooperation/european-territorial/ 6 URBACT, 2017, viewed 4 July 2017, http://urbact.eu/ 7 INTERACT, 2017, viewed 4 July 2017, http://www.interact-eu.net/ 8 Covenant of Mayors for Climate & Energy, 2016, Quick reference guide on financing opportunities for local climate and energy actions (2014-2020). 9 JASPERS, 2017, viewed 4 July 2017, http://jaspers.eib.org/ 10 Covenant of Mayors for Climate & Energy, 2016, Quick reference guide on financing opportunities for local climate and energy actions (2014-2020) and EIB, 2017, Supporting urban development (JESSICA), viewed 4 July 2017, http://www.eib.org/products/blending/jessica/index.htm 5 The ESIF also include territorial integrated systems, which allow Managing Authorities to combine different priority axis and Operational Programmes to finance integrated urban and territorial strategies. The Community-led Local Development (CLLD)11 and the Integrated Territorial Investments (ITI)12 are territorial integrated systems that may be used to support climate actions taken by LRAs13. In addition to the ESIF, four other EU funds are relevant for local climate finance: LIFE, Horizon 2020 (H2020), the European Fund for Strategic Investments (EFSI) and the European Energy Efficiency Fund (EEEF). LIFE14 specifically finances environmental and climate projects in the EU. In addition to grants, two financial instruments exist under LIFE and are managed by the European Investment Bank (EIB): the Natural Capital Financing Facility (NCFF), which is tailored to biodiversity and climate adaptation projects15, and the Private Finance for Energy Efficiency (PF4EE), which provides finance for energy efficiency programmes of EU Member States16. The NCFF can be accessed directly by EU cities to finance green and blue infrastructure, which can be presented as stand-alone projects or integrated in an urban area investment scheme or as part of a social housing scheme 17. The PF4EE provides loans, risk mitigation mechanisms and TA to national financial intermediaries, which provide energy efficiency financing to private and public entities. It is, therefore, an indirect financing source for LRAs.18 H202019 supports climate action through research and innovation investments, and has a 35% target for climate expenditure across the fund20. As a result, climate action is funded across all parts of the programme, particularly in the 11 European Commission, 2014, Regional Policy, Community-led Local Development, viewed 1 August 2017, http://ec.europa.eu/regional_policy/en/information/publications/brochures/2014/community-led-localdevelopment 12 European Commission, 2014, Regional Policy, Guidance Fiche: Integrated Territorial Investment, viewed 1 August 2017, http://ec.europa.eu/regional_policy/en/information/publications/guidelines/2014/guidance-ficheintegrated-territorial-investment-iti 13 European Commission, DG REGIO, Presentation on `The Urban Dimension in the Cohesion Policy 20142020', viewed on 28June2017 at http://www.eib.org/. 14 European Commission, 2017, Environment, LIFE Programme, viewed 1 August 2017, http://ec.europa.eu/environment/life/ 15 EIB, 2017, Blending: Natural Capital Financing Facility - Boosting investment for biodiversity and naturebased adaptation to climate, viewed 28 June 2017, http://www.eib.org/products/blending/ncff/index.htm 16 EIB, 2017, Blending: Private Finance for Energy Efficiency (PF4EE), viewed 28 June 2017, http://www.eib.org/products/blending/pf4ee/index.htm. 17 EIB, 2017, Blending: Natural Capital Financing Facility - Cities, viewed 18 July 2017, http://www.eib.org/products/blending/ncff/cities/index.htm 18 Interview with EIB, 5 July 2017 19 European Commission, Horizon 2020, viewed 1 August 2017, https://ec.europa.eu/programmes/horizon2020/ 20 REGULATION (EU) No 1291/2013 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 11 December 2013 establishing Horizon 2020 - the Framework Programme for Research and Innovation (20142020) 6 `societal challenges' programmable actions.21 Local governments are able to partner with researchers and other stakeholders to access funding under the H2020 programmable actions for research and innovation activities. Local governments may also benefit from the outcomes of H2020 actions. For example, the H2020 project CITYnvest offers TA and capacity building to local authorities for energy efficiency renovations of public buildings in three pilot regions: Liège (Belgium), Rhodope (Bulgaria) and Murcia (Spain). It also promotes innovative financing models for energy efficiency and knowledge exchange22. H2020 also provides grants for TA and PDA under ELENA (European Local Energy Assistance)23. This instrument is specifically designed for LRAs to improve the quality and viability of their energy efficiency and renewable energy projects. LRAs can use ELENA for the preparation of studies, calls and `bankable' projects. ELENA can be combined with future EIB operations, and serve as a first step for EIB financing operations.24 The EEEF, managed by the EIB, provides finance for specifically energy efficiency and renewable energy in the form of Private Public Partnerships (PPP).25 The EEEF includes a TA facility to support the preparation of sustainable energy programmes. The EFSI26 was designed to mobilise private financial resources for investments that are key for EU policy objectives. Economically and technically viable projects that are consistent with the EU policies are eligible for EFSI financing.27 As climate action is a key priority of the EU, EFSI is an important financing source for climate change mitigation measures (e.g. investments in sustainable energy). Given its nature, EFSI seems, however, less suitable for adaptation measures as not all climate adaptation projects are `bankable' i.e. they do not generate a direct financial return28. As part of the Investment Plan that includes the EFSI, the European Commission launched the European Investment Advisory Hub (EIAH), which is managed by the EIB and aims to support project promoters during the project development process through dedicated advice and technical assistance from experts.29 The EIAH is intended 21 22 European Commission, Horizon 2020 ­ Programme sections, viewed 28 June 2017, https://ec.europa.eu/ CITYnvest, 2017, viewed 4 July 2017, http://www.citynvest.eu/ 23 EIB, 2017, ELENA ­ Supporting investment in energy efficiency and sustainable transport, viewed 1 August 2017, http://www.eib.org/products/advising/elena/index.htm 24 Interview with EIB, 5 July 2017. 25 European Energy Efficiency Fund, viewed 28 June 2017, http://www.eeef.eu/objective-of-the-fund.html 26 EIB, 2017, European Fund for Strategic Investments, viewed 1 August 2017, http://www.eib.org/efsi/index.htm 27 Article 6, Regulation (EU) 2015/1017 of the European Parliament and of the Council of 25 June 2015 on the European Fund for Strategic Investments, the European Investment Advisory Hub and the European Investment Project Portal (OJ L 169/1 1.7.2015). 28 European Environment Agency, 2017, Financing urban adaptation to climate change, EEA Report No 2/2017. 29 EIB, 2017, European Investment Advisory Hub, viewed 28 June 2017, http://www.eib.org/eiah/ 7 to help project promoters, including LRAs, in overcoming technical obstacles before and during EFSI financing applications.30 1.2 International level In addition to EU financing for climate action, LRAs in the EU can access other international financing resources. The EIB, on top of its blending facilities developed with the EU, provides direct loans or loans via financial intermediaries, guarantees, and equity investments in the field of climate action to LRAs in all EU Member States as part of their standard operations. An example of an EIB loan through financial intermediaries is the cooperation between the EIB and the Belgian commercial bank Belfius to set up the `Smart Cities' financing programme31. Thanks to this programme, Belgian cities and towns had the possibility to finance mitigation measures, such as photovoltaic panels and near-zero-energy public buildings32. Another example of EIB financing at local level is the EIB direct loan of EUR 50 million taken by the city of Bologna in Italy to finance the construction of a public high school with high energy efficiency standards, among other features33. The European Bank for Reconstruction and Development (EBRD) provides LRAs with financing options similar to the EIB only in certain EU Eastern Member States34. The EBRD used to have a specific financing programme for adaptation and mitigation, the Sustainable Energy Initiative35, which was operational until 2015. Since 2015, the EBRD has adopted the Green Economy Transition approach with the aim of supporting sustainable finance. Through this, LRAs can apply for direct EBRD financing (loans and equity) for large projects (between EUR 5 and 250 million). For smaller projects, LRAs can access EBRD financing through the Sustainable Energy Finance Facility36, which provides credit lines to local financial intermediaries. Moreover, the EBRD acts as an agency for the Global Environment Facility37, an international partnership of 183 countries working on global environmental issues, through 30 31 Interview with EIB, 5 July 2017. Belfius, Smart Cities, Climate Action & Circular Economy, viewed 1 August 2017, https://www.belfius.be/publicsocial/FR/Themes/Smart-Cities/index.aspx 32 EIB, 2016, Urban Agenda: Smart Cities make a beautiful world, viewed 1 August 2017, http://www.eib.org/infocentre/blog/all/urban-agenda-smart-cities 33 EIB, 2017, Projects: Ambiente Urbano Bologna V, viewed 1 August 2017, http://www.eib.org/projects/pipelines/pipeline/20160008 34 The EBRD finances operations in the following EU countries: Bulgaria, Croatia, Cyprus, Czech Republic, Estonia, Greece, Hungary, Latvia, Lithuania, Poland, Romania, Slovak Republic and Slovenia. 35 EBRD, Sustainable Energy Initiative, viewed 1 August 2017, http://www.ebrd.com/what-we-do/sectors-andtopics/sustainable-energy-initiative.html 36 EBRD, EBRD Sustainable Energy Finance Facility, viewed 1 August 2017, http://seff.ebrd.com/index.html 37 Global Environment Facility, viewed 9 August 2017, https://www.thegef.org/ 8 which LRAs in EU countries with transition economies38 can access grants for climate change mitigation projects. To do so, LRA project promoters need to contact the relevant national Operational Focal Point that reviews the project proposals and ensures that the eligibility criteria for the Global Environment Facility financing are met39. The Council of Europe Development Bank (CEB) also provides financing to LRAs within its Member States, with a focus on improving living conditions in rural areas40. The CEB has financed local-level energy efficiency projects in Estonia41. Green bonds42 represent an additional general climate finance instrument that is available to LRAs in the EU and allows LRAs to diversify their funding sources and access low-cost capital for infrastructure and climate investment43. The number of sub-national and municipal green bond issuers increased during the years, nearly doubling from 2014 to 2016 and reaching around USD 20 billion globally44. For instance, the Ile-de-France region entered the green bonds market in 2012 and the city of Gothenburg in 201345. 1.3 National level Part 1.2 presents an overview of national-level public and private-sector climate finance for LRAs in Bulgaria, France, Ireland and Lithuania. For the selection of the Member States a balance between Northern-Southern, Eastern-Western and older-newer Member States was sought. A list of financing options available in each country is provided in Annex 1. The findings are based on a desk review of relevant options in each of the selected Member States. Where relevant, additional information from stakeholders' interviews was added. The review suggests that most of the climate finance instruments identified support mitigation measures, such as energy efficiency improvements, 38 In the EU, so far the following countries were eligible for Global Environment Facility: Bulgaria, Croatia, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Slovakia, and Slovenia. 39 Global Environment Facility, Funding, viewed 1 August 2017, https://www.thegef.org/about/funding# 40 Future for Rural Energy in Europe, Funding, viewed 28 June 2017, http://www.rural-energy.eu/ 41 Council of Europe Development Bank, The CEB and the environment, viewed 1 August 2017, http://www.rural-energy.eu/uploads/ModuleXtender/Funding/7/managementenvironment-1-.pdf 42 Green Bonds can be defined as bonds where the issuer is committed to use the proceeds exclusively to finance or re-finance eligible green projects i.e. projects and activities that promote progress on environmentally sustainable activities (based on the definition by the International Capital Market Association, 2015, Green Bond Principles, 2015 - Voluntary Process Guidelines for Issuing Green Bonds, March 27, 2015, p. 2). 43 Green Bonds for Cities project, factsheet, viewed 5 July 2017, http://local.climate-kic.org/ 44 Climate Bonds Initiative, 2017, Green Bonds Highlights 2016, viewed 5 July 2017, https://www.climatebonds.net/ 45 Climate Bonds Initiative, 2015, Bonds and Climate Change: the state of the market in 2015, viewed 5 July 2017, https://www.climatebonds.net/ 9 renewable energy and sustainable transport, while the options for financing adaptation action appear to be more limited. Newer Member States like Bulgaria and Lithuania seem to rely primarily on EU and other international funds that offer grants for climate action. France and Ireland are complementing EU or national grants with new and innovative financial instruments such as green bonds. 1.3.1 Bulgaria Financing from EU funds or other international sources play an important role in supporting climate action in Bulgaria. For instance, during the current financing period (2014-2020) Bulgaria has allocated EUR 561.6 million from the ESIF to climate adaptation and risk prevention. More significant are the ESIF allocations to the low-carbon economy: EUR 1.5 billion.46 Nonetheless, there are also several national public funds that can support energy efficiency improvements, renewable energy or actions for sustainable transport (see Table 2 in Annex 2 for more details). These funds are financed with the national budget, the international sale of GHG quotas and other public sources and provide predominantly grants or loans. The Energy Efficiency and Renewable Sources Fund (EERSF) offers also partial credit and portfolio guarantees and TA for energy efficiency investments; while the Fund for Local Authorities and Governments (FLAG) specifically supports municipalities in the process of obtaining EU funding. Although there are no labelled green bonds in the country so far, the municipality of Varna has issued municipal bonds that were used to finance the modernization of the city's street lighting47. However, no dedicated facilities for supporting adaptation have been found. In the past, such investments were financed with the ESIF e.g. in the city of Smolyan ESIF were used to fund flood protection measures in the period 2007-201348. More details on the financing options available to Bulgaria LRAs can be found in Annex 2, Table 2. 1.3.2 France France has been successful in making use of EU funds to finance climate action. During the current financing period (2014-2020) France has allocated EUR 4.8 billion from the ESIF to climate adaptation and risk prevention. Similarly, ESIF allocations to the low-carbon economy amount to EUR 4.9 billion.49 In addition 46 47 European Commission, 2017, ESIF Data, viewed 13 July 2017, https://cohesiondata.ec.europa.eu/themes Cochu, A. et al. 2016, Study on the potential of green bond finance for resource-efficient investments, November 2016, p.32, viewed 5 July 2017, http://ec.europa.eu/environment/enveco/pdf/potential-green-bond.pdf 48 European Environment Agency, 2017, Financing urban adaptation to climate change, EEA Report No 2/2017. 49 European Commission, 2017, ESIF Data, viewed 13 July 2017, https://cohesiondata.ec.europa.eu/themes 10 to ESIF, some French cities have benefited, for instance, from the EEEF TA facility. At national level, public financing is available through the French national investment bank Caisse des Dépôts, which plays an important role in providing climate finance ­ mainly in the form of loans ­ to LRAs. Private sector financing plays, nevertheless, an important role. Commercial banks, like Crédit Coopératif, offer loans for climate investments. The Ile-de-France region and the city of Paris are among the first LRAs in the EU that have issued green bonds to finance local climate action. With the proceeds of the green bonds, the city of Paris has already planned to implement two adaptation projects with adaptation benefits: the planting of 20,000 trees in the inner city and the creation of 30 hectares of new parks50. More details on the financing options available to French LRAs can be found in Annex 2, Table 3. 1.3.3 Ireland Compared to Bulgaria, fewer financing instruments from international funding options are available in Ireland. Nevertheless, Ireland makes use of the ESIF to finance climate action. During the current financing period (2014-2020) Ireland has allocated EUR 1.3 billion from the ESIF to climate adaptation and risk prevention. ESIF allocations to the low-carbon economy are equal to EUR 581.8 million.51 An important source for energy efficiency investments is the national government through the Sustainable Energy Authority Ireland (SEAI), which offers a variety of grants for climate action (see Table 4 in Annex 2 for more details). Even though energy efficiency and building retrofits are primarily supported, SEAI grants are also available for electric vehicles. In 2016, the first green bonds from an Irish company were issued when Gaelectric - the Irish renewable energy and energy storage group, issued a Green Bond worth EUR 10 million52. Although there is no information about public green bonds in Ireland so far, there have been appeals for the national government to issue such bonds53. 50 European Environment Agency, 2016, Climate-ADAPT, Case study on Climate bond financing adaptation actions in Paris (2016), viewed 14 July 2017, http://climate-adapt.eea.europa.eu/. 51 European Commission, 2017, ESIF Data, viewed 13 July 2017, https://cohesiondata.ec.europa.eu/themes 52 Gaelectric, 2016, Ireland targets emerging environmental finance market, viewed 5 July 2017, http://www.gaelectric.ie/ireland-targets-emerging-environmental-finance-market/ 53 Hancock, C. 2017, Hayes says Ireland should issue green bonds, The Irish Times, Jan 26, 2017, viewed 5 July 2017, https://www.irishtimes.com/business/economy/hayes-says-ireland-should-issue-green-bonds-1.2951120 11 1.3.4 Lithuania In Lithuania, financing options for climate action available to LRAs seem to be mainly public, both from the EU and the national budget. However, in Lithuania blending of ESIF and private investments was used to finance energy efficiency projects in the period 2007-2013. During the current period (2014-2020), blending of ESIF and private resources is being used to establish the Energy Efficiency Fund (ENEF), which finances the modernisation of central government owned buildings and of cities' street lightening. During 2017, another financial instrument will be launched for the modernisation of buildings owned by municipalities.54 Private financial resources for climate action are also available from the Nordic Environment Finance Corporation. More details on the financing options available to Lithuanian LRAs can be found in Annex 2, Table 5. In the period 2014-2020, Lithuania has allocated EUR 415.3 million from the ESIF to climate adaptation and risk prevention. ESIF allocations to the lowcarbon economy during the same period are more than double: EUR 1.2 billion.55 54 FI Compass, Financial instruments for energy efficiency in the programming period 2014-2020, viewed 17 July 2017, https://www.fi-compass.eu/ 55 European Commission, 2017, ESIF Data, viewed 13 July 2017, https://cohesiondata.ec.europa.eu/themes 12 2. Main obstacles for Local and Regional Authorities when using climate finance instruments This section presents the analysis of the main obstacles that LRAs face when using climate finance instruments. The analysis is based on a literature review and interviews with key stakeholders. All references are listed in Annex 3 while a complete list of the stakeholders interviewed is presented in Annex 4. 2.1 Lack of awareness about climate finance options As highlighted in Part 1, there is a wide variety of financing options for climate action at local level. However, LRAs often lack awareness or knowledge about all the options available. This makes it harder for them to identify and choose the best financing instruments for supporting the planned climate action investments. Furthermore, LRAs rely primarily on public funds and might be unaware or not knowledgeable about equity and debt instruments for climate investments at the local level (e.g. blending facilities, revolving funds, green bonds)56. Identifying the most suitable instruments can be particularly difficult for investments in adaptation as few financing options dedicated to adaptation measures exist. While some EU funds, such as LIFE, have clearly allocated resources for adaptation, there are few private-sector options available for financing adaptation measures57. In practice, investments in adaptation are not always labelled as such and are supported by funding designed for sectors such as water management and urban revitalisations or through combinations of different types of financing from various sources and levels of government58. These obstacles limit the ability of LRAs to identify the available and most suitable options for their climate action investments. There are various initiatives and projects that are attempting to address this challenge. For instance, `one-stop shops' provide comprehensive information about the different financing options available for energy efficiency in the EU, the opportunities to set up innovative financial instruments at the local level and offer technical and financial expertise on how to access and manage such sources (e.g. the CITYnvest project, financed by H2020). Another example is the Cities Climate Finance Training (CCFT) under the Low Carbon City Lab (LoCaL) programme by Climate-KIC and other organisations ­ including ICLEI, CDP and WWF. Under CCFT, the training takes the form of workshops 56 Deng-Beck, C. and Price, L. 2016, Gap Analysis Report: Closing the gap between finance and urban climate action, viewed 10 July 2017, http://e-lib.iclei.org/; and interview with the Climate Bond Initiative, 30 June 2017. 57 European Environment Agency, 2017, Financing urban adaptation to climate change, EEA Report No 2/2017. 58 European Environment Agency, 2017, Financing urban adaptation to climate change, EEA Report No 2/2017. 13 and aims to inform local authorities on how to best use financial opportunities for climate action. For instance, success factors for green bonds and adaptation financing are some of the issues that are treated in the training.59 2.2 Insufficient administrative capacity and technical knowledge Even when LRAs have identified the most suitable climate finance instruments for their investments, the preparation of applications and securing financing can be challenging. For instance, applications for centrally-managed EU funds (e.g. H2020, LIFE) should be prepared in English and usually require a partnership with organisations from other Member States60. Finding international partners or preparing applications in another language requires significant time and human resources for LRAs. Moreover, securing financing for large investments usually requires the collection of technical information, risk assessment and preparation of detailed analyses61. LRAs, especially small LRAs, do not always have sufficient human resources or skills to prepare such applications. Hence, insufficient administrative capacity is one of the most significant obstacles in accessing climate finance at local level62. Overcoming these administrative capacity issues may require LRAs to acquire new competences such as financial and risk management skills, technical knowledge about urban development, and assessment techniques of the sustainability impact and financial benefits of a project63. However, it has been suggested that LRAs might already have the required expertise in-house as LRAs have experience in urban regeneration, infrastructure development, capital raising, public engagement and communications. Consequently, how existing skills and expertise are harnessed may be more important than developing new skills64. In this line, it was noted that the structure of city governments, which are typically organised by thematic departments, could be an obstacle to the full utilisation of internal knowledge and capacity to implement climate projects. For instance, the fact that the finance department does not cooperate with the environment and climate department could prevent the creation of synergies and the share of knowledge65. Nevertheless, actions can be taken to support to LRAs to overcome the lack of knowledge on how to access climate finance at local 59 60 Low Carbon City Lab, Climate-KIC, viewed 14 July 2017, http://local.climate-kic.org/ Interviews with Ecofys, 6 July 2017, and Eurocities, 7 July 2017. 61 Interviews with Climate Alliance, 29 June 2017, and Eurocities, 7 July 2017. 62 Committee of the Regions, 2016, Results of the CoR online consultation on obstacles to investments at local and regional level, September 2016; Covenant of Mayors, 2016, Sustainable energy investment in European local authorities, Report based on a survey by the Covenant of Mayors Office, May 2016; and interviews carried out in the preparation of this report (see Annex 3 for a list of all interviews). 63 ICLEI, Finance, viewed 14 July 2017, http://www.iclei.org/activities/finance.html 64 Sullivan, R. Gouldson, A. and Webber, P. 2012, Funding low carbon cities: local perspectives on opportunities and risks, Climate Policy, 13 (4), pp. 514-529 65 Interview with Low Carbon City Lab, 27 July 2017. 14 level. For instance, the LoCaL project has developed different programmes to support LRAs in accessing climate finance, such as `Matchmaker' that aims to connect local authorities and investors.66 LRAs may also seek to use the different options available for TA and/or PDA to overcome these obstacles. Such options may reduce transaction costs faced by LRAs by providing guidance concerning available financing options, financial risks, risk management approaches and accessing funding from the various EU funds67. Although the TA/PDA options at EU level have been reported as useful (e.g. EEEF TA), some challenges remain. For instance, most TA/PDA grant applications constitute lengthy complicated procedures and require the preparation of detailed studies (e.g. energy audits) that can be as challenging for LRAs as the applications for financing instruments68. Internal administrative constraints can also hinder LRAs' capacity to develop and implement innovative financial instruments such as green bonds69. For instance, the preparation of Paris Climate Bond suggests that municipalities need extensive human resources and time, which can be an obstacle for small municipalities (see the box below for additional lessons learned). Box 1. Green bonds In 2015, the city of Paris issued the Paris Climate Bond for a total amount of EUR 300 million to finance its Climate & Energy Action Plan. The climate bond promises an annual interest rate of 1.75%. The list of projects to be financed by the green bonds is selected and managed by the Finance Management Support Service of the city with the Urban Ecology Agency of Paris. Vigeo, a sustainability rating agency, oversees the selection process. In addition, three banks (Credit Agricole CIB, HSBC and Société Générale CIB) were involved as partners of the city. As of 2016, two projects with climate adaptation benefits were included in the Paris climate bond: planting 20,000 trees within Paris and creating 30 hectares of new parks. Based on the experience of the city of Paris, the following lessons can be drawn: Municipalities should bear in mind that issuing a green/ climate bond is a long process, which requires extensive human resources and time. Transparency and accountability are key for the success of a green or 66 67 Climate-KIC, viewed 14 July 2017, http://www.iclei.org/ Sullivan, R. Gouldson, A. and Webber, P. 2012, Funding low carbon cities: local perspectives on opportunities and risks, Climate Policy, 13 (4), pp. 514-529 68 Interview with Climate Alliance, 29 June 2017. 69 Interview with Climate Bonds Initiative, 30 June 2017. 15 climate bond. However, external rating requires financial resources. Sectoral experts are needed to develop a green/climate bond. If the municipality does not have the necessary resources in-house, it will need to know where to ask for help. For instance, the municipality could contact specialised organisations or banks.70 2.3 Budgetary and regulatory constraints Other obstacles for LRAs to access the climate finance options available can be related to budgetary or regulatory constraints. The preparation of applications for EU funds or other financing instruments might require the hiring of new personnel or even external consultants which can be very costly for LRAs, especially smaller LRAs71. Furthermore, obtaining co-finance from some EU funds (e.g. LIFE) or setting up new financial instruments (e.g. green bonds) require LRAs to have some own capital for investment72. Additionally, many LRAs plan their budgets some years in advance making the last-minute inclusion of new expenses difficult73. Another issue is that national, regional and local legislation regarding the financing of municipal investments varies. Some LRAs are legally constrained from taking on debt, which in turns limits their climate finance options74. LRAs also face an issue concerning private financing options, such as loans. How loans for climate action are treated in accounting rules affects the LRAs' budget constraints and may constitute an obstacle to using private financing for climate action.75 This issue was reported in particular for energy efficiency investments by the Energy Efficiency Financial Institutions Group76. Under current rules, even though energy efficiency projects are financed partially or entirely by the private sector (e.g. through performance guarantees), these investments are by default recorded on the balance sheet of the public authority and accounted for as public sector debt. This is a major disincentive for LRAs to use private financing for energy efficiency investments, especially in Member 70 European Environment Agency, 2016, Climate-ADAPT, Case study on Climate bond financing adaptation actions in Paris (2016), viewed 14 July 2017, http://climate-adapt.eea.europa.eu/. 71 Interviews with Climate Alliance, 29 June 2017, and Eurocities 7 July 2017. 72 Interviews with Eurocities, 7 July 2017. 73 Interview with Eurocities, 7 July 2017. 74 Covenant of Mayors, 2016, Sustainable energy investment in European local authorities, Report based on a survey by the Covenant of Mayors Office, May 2016; and interview with Eurocities, 7 July 2017. 75 EU Sustainable Energy Week, Conference `Accelerating the clean energy transition ­ financing energy efficiency at the local level', Brussels, 21 June 2017. 76 Energy Efficiency Financial Institutions Group, 2015, Energy Efficiency ­ the first fuel for the EU Economy: How to drive new finance for energy efficiency investments, Final report. 16 States where the focus is on reducing public sector debt.77 Moreover, the current Eurostat accounting rules for Energy Performance Contracting (EPC) have been criticised for not correctly accounting for the possible energy savings. Although energy efficiency investments will eventually lead to savings from the energy bill, these savings are not considered in the assessment of investments.78 It should be noted that the European Commission has committed to take action in 2017 concerning accounting rules79. Member State legal frameworks can create indirect barriers to climate action at local and regional levels. A specific example of a regulatory barrier to the implementation of adaptation measures is the legislative framework in Germany. German regulations require the use of concrete and accurate data for the strategic and spatial planning. This implies that future climate projections cannot be used to plan investments due to their inherent uncertainty.80 This might prevent LRAs from implementing climate proofing measures, although funding opportunities are available. 81 2.4 Ensuring the `bankability' of potential investments Another significant challenge for LRAs to access financing instruments, especially non-grant instruments, for climate action is demonstrating the `bankability' of the planned investments. The low `bankability' of some climate action projects is often due to lack of sufficient data about future returns on investment. There is usually insufficient information about the amount of finance needed to support adaptation action or about the future benefits/savings from avoided damages that resilience and adaptation measures can bring82. The latter point is linked to the fact that, unlike with mitigation, there is no single metric that can be used to quantify the benefits of adaptation actions. Moreover, the benefits of adaptation actions might arise so far in the future that they cannot be integrated in the financial assessment of a project. Therefore, combining adaptation and mitigation investments (e.g. energy efficiency refurbishments can 77 Climate Alliance, 2016, Accounting rules creating barriers for mobilising energy efficiency investments, 21 June 2016, viewed 10 July 2017, http://www.climatealliance.org/; and interviews with Climate Alliance, 29 June 2017, and Eurocities, 7 July 2017. 78 E3G, 2016, Stakeholders' letter on `Reviewing accounting rules and/or debt treatment for energy efficiency investments will help close the energy efficiency financing gap in Europe', viewed 14 July 2017, https://www.e3g.org/ 79 European Commission, 2016, Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee, the Committee of the Regions and the European Investment Bank, Clean Energy for all Europeans, Brussels, 30.11.2016, COM(2016) 860 final. 80 Lorenz, S. et al. 2016, Use of Climate Projections in Adaptation Planning: Lessons from England & Germany. SRI Briefing Note 9, University of Leeds, viewed 12 July 2017, http://www.see.leeds.ac.uk/ 81 Interview with Ecofys, 6 July 2017. 82 E3G, 2014, Cities and resilience to climate change ­ Workshop summary, viewed 10 July2017, https://www.e3g.org/ 17 be an opportunity to make buildings more resilient, while larger infrastructure or urban renewable projects can be used to make cities more resilient and adapted to climate changes) might make it easier to obtain sufficient financing for adaptation83. Although adaptation projects are more likely to be considered `un-bankable' by investors, some mitigation projects may also be challenging to finance for LRAs. For instance, the viability of energy efficiency investments can be impacted by the fact that potential future savings are not always included in the business case and by the methods for calculating those savings84. It is also key that cities and LRAs are able to identify and show to investors where the largest potential for climate benefits in their territory. Cities need to be able to identify the locations with the largest potential for energy efficiency improvements and prepare detailed and accurate investment plans that reflect how this potential can be used85. Cities might also lack the `capacity to report and quantify nonfinancial information on mitigation projects', which can hinder private investments86. Another challenge to making climate action investments `bankable' and viable for funding is that some of those projects are small and dispersed, especially in the case of energy efficiency investments87. In such cases, LRAs should explore the possibility to combine multiple smaller investments either within the same LRAs or with neighbouring LRAs into larger `bundles' that are more `bankable' or `fundable'88. Nevertheless, combining different investments into `bankable' bundles can be challenging in itself and LRAs often need guidance and support to do this successfully89. Training LRAs on how to best combine different climate action investments to secure financing is another area where TA/PDA can play a significant role. Another relevant action is setting up `one-stop shops' where interested LRAs can combine smaller energy efficiency investments into bigger projects (e.g. the French initiative Énergies POSIT'IF serves as a `onestop shop' for aggregating small scale projects)90. 83 European Environment Agency, 2017, Financing urban adaptation to climate change, EEA Report No 2/2017; and Interview with I4CE, 29 June 2017. 84 Interview with Eurocities, 7 July 2017. 85 Interview with the 2 Degrees Investment Initiative and SUEZ, 11 July 2017. 86 F. de Boer, 2015, White Paper: Barriers to Private Sector Investments into Urban Climate Mitigation Projects, CDP with support from Low Carbon City Lab. 87 Covenant of Mayors, 2016, Sustainable energy investment in European local authorities, Report based on a survey by the Covenant of Mayors Office, May 2016; and interview with EIB, 5 July 2017. 88 European Environment Agency, 2017, Financing urban adaptation to climate change, EEA Report No 2/2017; Interview with Eurocities, 7 July 2017; Interview with EIB, 5 July 2017. 89 Deng-Beck, C. and Price, L. 2016, Gap Analysis Report: Closing the gap between finance and urban climate action, viewed 10 July 2017, http://e-lib.iclei.org/; and interview with Eurocities, 7 July 2017. 90 Interview with EIB, 5 July 2017. 18 A specific obstacle to private finance for energy efficiency is the misperception by private investors of the risks linked to such investments. Indeed, the risk perceived by investors is often higher than the actual risk of energy efficiency projects. To address this problem, the Energy Efficiency Financial Institutions Group (EEFIG), supported by the EU, has recently launched the De-Risking Energy Efficiency Platform (DEEP). DEEP is an open access platform that provides investors with information about energy efficiency projects, e.g. on their technical and financial performance.91 This platform is expected to be beneficial to project promoters, including LRAs, as it increases transparency on energy efficiency projects and facilitates the monitoring of performance.92 2.5 Political constraints The access of LRAs to climate finance can be further constrained by political limitations, such as reluctance to undertake climate action investments or misalignment of priorities at the different levels of governance. In some cases, there might be a misalignment between EU and national policy priorities in the field of climate action. This can result in Member States not incentivising and `sponsoring' EU funds for climate action.93 Furthermore, LRAs might be reluctant to undertake climate action investments due to fears of low public acceptance. Local politicians might also prioritise projects that are seen by the citizens as having a higher priority locally, e.g. dealing with unemployment or developing economic activities94. Previous research also identified the difficulty for cities to prioritise climate action compared to other urban projects95. Moreover, the fact that cities' planning and projects might be influenced by the electoral cycle can be perceived as potential risk by private investors96. Political reluctance can also constitute an obstacle for LRAs to introduce fiscal instruments and incentives that can contribute to mitigation measures, although fiscal instruments are recognised as an important tool and source of climate finance.97 91 EU Sustainable Energy Week, Conference `Accelerating the clean energy transition ­ financing energy efficiency at the local level', Brussels, 21 June 2017. 92 Build Up, 2016, De-risking Energy Efficiency Platform, viewed 18 July 2017, http://www.buildup.eu/ 93 Interview with Ecofys, 6 July 2017. 94 Interview with Ecofys, 6 July 2017. 95 F. de Boer, 2015, White Paper: Barriers to Private Sector Investments into Urban Climate Mitigation Projects, CDP with support from Low Carbon City Lab. 96 Interview with Low Carbon City Lab, 27 July 2017. 97 OECD, 2010, Cities and Climate Change, OECD Publishing. http://dx.doi.org/10.1787/9789264091375-en 19 2.6 Challenges in meeting international funds the requirements of EU or Specific challenges in meeting the requirements of EU funds have also been observed. One obstacle reported by some LRAs is linked to the thematic nature of financing instruments and to the fact that the eligibility criteria for certain funds are often too prescriptive. At local level, this prevents the realisation of synergies between different types of climate action, such as the combination of energy efficiency, renewable energy and sustainable mobility.98 Furthermore, the strict requirements and complex procedures of some centrally managed EU funds, such as H2020, can also pose obstacles to LRAs. For example, preparing successful H2020 applications has been challenging for less experienced LRAs from Eastern Member States. On the contrary, stakeholders from Northern and Western Member States seem to have more experience in preparing applications and might therefore have a comparative advantage. This creates a risk of isolating and excluding Eastern LRAs from cooperative EU projects99. Eligibility criteria represent an additional limitation for European LRAs to access some types of international financing instruments. In fact, most of the international instruments for climate finance are dedicated exclusively to developing countries, with little to no access for external actors. 98 Climate Alliance, Eurocities, Energy Cities, RES Coop, Énergies POSIT'IF, 2017, Joint statement on local energy efficiency financing, viewed 10 July 2017, http://www.climatealliance.org/ 99 Interviews with Eurocities (7 July 2017) and POLIS (20 July 2017). 20 3. Recommendations This section presents recommendations for addressing the obstacles identified in Part 2 and further improving access and use of climate finance instruments by LRAs. The recommendations are structured by target group. 3.1 Recommendations for LRAs Mainstreaming climate action into other investments Securing capital for mitigation and adaptation measures can be challenging for LRAs for budgetary, legal or political reasons. A possible way to overcome such constraints is to mainstream climate action into investments in other sectors and develop a transversal approach across different services within the same authority100. For instance, mitigation and adaptation measures can be mainstreamed into LRAs' on-going investments in infrastructure maintenance and urban development. In public infrastructure, renewable energy can be incorporated into the public lighting system; in transport electric public transport vehicles or vehicles using biofuels can be introduced, cycling routes and paths can be introduced or traffic management techniques employed; and in public safety flood protection measures can be undertaken. Combining mitigation and adaptation measures As financing instruments for adaptation are scarce, LRAs should search for synergies with mitigation financing options and develop projects that implement mitigation and adaptation measures at the same time. For example, renovations of urban areas can be used to improve urban areas' resilience to floods, heat waves or other extreme events; while energy efficiency investments can be an opportunity to make the building stock more resilient to climate change. Aggregating small scale projects Another common obstacle to LRAs is that climate investments are often too small or scattered to attract investors. Hence, options to aggregate small projects e.g. between neighbouring LRAs, should be explored. This approach is already supported by the EIB financing. An example is the Energy Efficiency Private Housing project in France, where the refurbishment of residential buildings was aggregated to a single project with the total cost of EUR 800 million 101. The recommendation of aggregating small projects is valid also for financial 100 Energy Cities, 2015, Unlocking investment in cities: ELENA-EIB technical assistance facility ­ Project review in five European local authorities, viewed 12 July 2017, http://www.energy-cities.eu/ 101 B. Topalolu, 2017, EIB presentation Financing energy efficiency ­ support by the EIB at the `Financing Energy Efficiency in Central Europe' conference, Prague, 27 April 2017, viewed 20 July 2017, https://ec.europa.eu/ 21 instruments such as green bonds. For example, this has been done by Swedish municipalities with the Kommuninvest Green Bonds102 (see next point for more details). Advice and help services on green bonds can be provided to small LRAs to aggregate climate projects and connect them with relevant partners such as financing institutions.103 Partnering with other LRAs and local stakeholders Cooperation between local authorities can bring synergies and economies of scale, and might help aggregating small scale projects. Different local authorities can benefit from having one single managing office and from sharing experiences and competences, as the Spårvagnar i Skåne project between the cities of Malmö, Lund and Helsingborg shows. The three Swedish municipalities cooperated to create new tram networks and reduce the use of car with expected reduction of GHG emissions.104 Another example of cooperation between cities in Sweden is the issuance of three green bonds by Kommuninvest. The proceeds of the green bonds are expected to finance municipal investment projects in renewable energy, energy efficiency, green buildings, public transport and water management.105 In addition to cooperating with other local authorities, LRAs can explore the opportunities for synergies and partnership with other local stakeholders. For instance, local energy agencies can provide technology expertise, advice on audits or information about existing state grants and other financing options available106. For this reason, LRAs can partner with local energy agencies to benefit from their technical expertise and knowledge of financing options, but also to team up and develop large sustainable energy plans. Furthermore, local banks, businesses or other investors can also be valuable partners to LRAs providing expertise and/or additional resources for climate investments through the use of financial instruments or Public-Private Partnerships (PPP). Exploring non-grant instruments Although grants are an essential source of funding for climate investments at the local level, they cannot meet all the climate finance needs of LRAs. Instead, 102 Kommuninvest, 2017, Press release: Kommuninvest now behind the three largest green bonds ever issued out of Sweden, 17 May 2017, viewed 20 July 2017, http://kommuninvest.se/ 103 Interview with Climate Bonds Initiative, 30 June 2017. 104 Energy Cities, 2015, Unlocking investment in cities: ELENA-EIB technical assistance facility ­ Project review in five European local authorities, viewed 12 July 2017, http://www.energy-cities.eu/ 105 Kommuninvest is a Swedish municipal cooperation for efficient and sustainable financing of housing, infrastructure, schools, hospitals etc. that is in place since 1986. The cooperation counts 288 municipalities and county councils/regions in Sweden. Kommuninvest, 2017, Press release: Kommuninvest now behind the three largest green bonds ever issued out of Sweden, 17 May 2017, viewed 20 July 2017, http://kommuninvest.se/ 106 Interview with I4CE, 29 June 2017. 22 grants can be used as an important initial source of financing to leverage private investment through the introduction of complementary non-grant instruments such as green bonds, revolving funds, guarantees and debt financing. Using fiscal instruments and incentives to complement other financing sources Fiscal instruments can represent a useful complementary resource for climate action, although they are usually less popular among citizens and local politicians. For instance, fiscal incentives and urban congestion charges can be used to limit the use of cars in cities. The cities of London, Stockholm and Milan have introduced urban congestion charges with positive results in terms of reduction of CO2 emissions.107 Using PDA and TA facilities for internal capacity-building As highlighted by two sustainable energy projects in Bristol and Brussels, PDA and TA can be used to improve and develop in-house skills and expertise in climate projects. In this light, the use of external consultants should be limited, to the extent possible, to specialist areas. This could allow local authorities to receive long-lasting benefits from PDA and TA facilities.108 Promoting climate action in the local community In addition to undertaking climate investments, LRAs play a key role in steering local climate action and leading the local community. For cities to reach their mitigation and adaptation goals, households and industries should become more resilient and energy efficient. Therefore, LRAs should incentivise and motivate their citizens and local businesses to take action, for instance through regulatory measures or by providing information about climate action and financing options available to households and industry. Such activities would help to generate demand for climate finance within local communities, which would in turn strengthen the capacity of LRAs to develop and justify their needs for climate finance. 3.2 Recommendations for EU policy-makers Revising the accounting rules for climate action The current Eurostat accounting rules on EPC prevent many LRAs from undertaking energy efficiency investments or lead to over-reliance on grant schemes, which results in insufficient investments in energy improvements of the building stock in the EU. Therefore, it is important that the accounting rules 107 108 OECD, 2010, Cities and Climate Change, OECD Publishing. http://dx.doi.org/10.1787/9789264091375-en Energy Cities, 2015, Unlocking investment in cities: ELENA-EIB technical assistance facility ­ Project review in five European local authorities, viewed 12 July 2017, http://www.energy-cities.eu/ 23 are revised to not hinder local investments in energy efficiency and enable LRAs to use the available public funding for leveraging private investments. For instance, EPC can be classified as services or buy-and-leaseback contracts allowing public authorities to finance energy efficiency `off balance sheet'109. Making applications for EU funding more accessible to LRAs The preparation of successful applications for EU funds poses various obstacles to LRAs, which often face constraints in time, human resources or in-house expertise. Creating a multi-stage process for the application to EU funds can ease the burden on LRAs. For instance, a first stage where LRAs can send an expression of interest with a first idea/ draft of the project might be introduced. If the expression of interest gets approved, the LRAs could then prepare a full application. This would help LRAs avoid investing time and resources in bids that might not be successful. LRAs sometimes spend a month or more to prepare an application that eventually does not get approved, while preparing an expression of interest would be less time consuming. Furthermore, investing resources in unsuccessful applications can create institutional fatigue and discourage LRAs from further attempts to secure EU funding. Losing interest in EU funds after several rounds of unsuccessful applications, which can potentially lead to no climate action. Another possible improvement could be having the possibility for LRAs to submit the application documents as well as other reporting documents in the local language. Although this would represent an additional level of administration, it should not be overly cumbersome as the EU institutions have already in place a sophisticated translation machine. There is a need for climate change resources, such as decision-making tools for policymakers, in local languages110. The option of delivering project outputs, such as reports and other deliverables, in local language would also assist in addressing this need while at the same time making EU funding processes more accessible for LRAs. The improvement and creation of helpdesks with specific expertise could further help LRAs in their application process for EU funds or PDA/TA facilities. Providing help and validation to LRAs during the application process can substantially facilitate LRAs access to different financing options.111 In addition, creating an EU Climate Finance Information Portal can help inform LRAs and other stakeholders about all available EU funding opportunities for climate action. 109 EU High Level Expert Group on Sustainable Finance, 2017, Financing a Sustainable European Economy, Interim Report, July 2017, viewed 21 July 2017, https://ec.europa.eu/ 110 Interview with Ecofys, 6 July 2017. 111 Interview with Ecofys, 6 July 2017. 24  Strengthening TA and PDA facilities TA and PDA are among the most important tools for LRAs to overcome the obstacles of insufficient administrative capacity or expertise in developing successful applications for climate financing.112 PDA facilities such as ELENA have proven useful for LRAs in the past helping them implement innovative financial instruments and develop internal skills and capacities113. Nevertheless, application procedures for TA and PDA can be almost as cumbersome or restrictive to LRAs as the application procedures for funds themselves. For example, many LRAs are too afraid to take on project risks due to the repayment clause under the Horizon2020 PDA. Moreover, the high investment volumes required by ELENA often pose an obstacle to smaller municipalities or Member States where project aggregation is impossible114. For these reasons, there have been calls from LRAs to establish a small-scale TA/PDA facility with more balanced risk sharing rules and an accompanying fund that can support the financing of projects receiving TA. Such a facility can also support capacity building and local or regional `one-stop shops'.115 Moreover, a small-scale TA/PDA facility could encourage the piloting of new, innovative actions at a small scale, with limited risk. Promoting partnerships between different types of regions To prepare successful applications for certain EU funds that are rather competitive, such as Horizon 2020, LRAs will need to cooperate with other organisations. However, it seems that LRAs in Northern and Western EU Member States are more experienced in the use of EU funds and tend to work together, while Eastern EU countries that are less experienced are not usually involved in these partnerships 116. This could disadvantage Eastern EU Member States in accessing competitive funds. However, newer and less experienced Member States might also learn from cooperating with older Member States. In the framework of certain EU funds, the EU should encourage and promote the cooperation between less and more developed regions. For instance, URBACT currently requires the participation of at least two cities from less developed regions when initial partnership networks are established (usually four to six cities altogether)117. One possibility could be to include geographic diversity as a relevant criterion in the selection of proposals. For example, in the case of 112 113 Interview with EIB, 5 July 2017. Energy Cities, 2015, Unlocking investment in cities: ELENA-EIB technical assistance facility ­ Project review in five European local authorities, viewed 12 July 2017, http://www.energy-cities.eu/ 114 Climate Alliance, Eurocities, Energy Cities, RES Coop, Énergies POSIT'IF, 2017, Joint statement on local energy efficiency financing, viewed 10 July 2017, http://www.climatealliance.org/ 115 Climate Alliance, Eurocities, Energy Cities, RES Coop, Énergies POSIT'IF, 2017, Joint statement on local energy efficiency financing, viewed 10 July 2017, http://www.climatealliance.org/ 116 Interview with Eurocities, 7 July 2017. 117 URBACT, 2016, The URBACT III Programme, Programme Manual, 6 th Version, October 2016, viewed 17 July 2017, http://urbact.eu/ 25 H2020, gender balance and the participation of SMEs are currently factors to be considered when deciding between proposals that have received the same score (ex aequo proposals)118. Geographical or socio-economic diversity of applicants could also be included as a relevant factor here, without undermining the overall quality of successful proposals. Supporting European LRAs in international climate negotiations In the next years the details for the implementation of the Paris Agreement will be negotiated by EU policy makers. This might be an opportunity to revisit the conditions of existing international climate financing instruments or the introduction of new ones. This offers an opportunity to loosen some of the requirements for international climate finance with a view to allow European LRAs to engage in joint initiatives with developing countries in a decentralised cooperation perspective. This could prove particularly beneficial as it could support knowledge exchange on climate action between countries in the Northern and Southern part of the world119. Prioritising projects that support mainstreaming climate action Climate action can be embedded in sectoral projects, such as transport, construction and agriculture. Therefore, in the selection process the EU could prioritise projects that include a climate action component. This would allow LRAs to create synergies between different sectors when planning their projects. This could be achieved through building climate objectives into the selection criteria for the more sectoral funds within ESIF (e.g. EAFRD and EMFF) and for EFSI. 3.3 Recommendations for national policy-makers Strengthening the role of LRAs in ESIF As cities are facing major climate risks and are often essential actors in actions that address these risks, regional and national governments need to ensure cities are more involved by in the definition of needs related to climate action and preparation of Operational Programmes.120 This will help to improve the overall planning within Operational Programmes, ensuring that actions at the city and local levels are adequately funded, and help to improve the overall efficiency of ESIF investments. Setting up and replicating `one-stop shop' initiatives 118 European Commission, Horizon 2020 Work Programme 2014-15, '19. General Annexes Revised', Commission Decision C (2014)4994 of 22 July 2014, part 18 119 Interview with Low Carbon City Lab, 27 July 2017. 120 Climate Alliance, Eurocities, Energy Cities, RES Coop, Énergies POSIT'IF, 2017, Joint statement on local energy efficiency financing, viewed 10 July 2017, http://www.climatealliance.org/ 26 As lack of expertise and knowledge are one of the main obstacles, `one-stop shops' have so far proved to be a useful support tool for LRAs to implement energy efficiency projects. In fact, `one-stop shops' can provide a set of services to their beneficiaries, including technical assessments, support with tendering procedures and information about financing options. Successful examples include Énergies POSIT'IF in France and CITYnvest, an EU wide project funded by Horizon 2020. So far, CITYnvest supported the establishment of Liège RenoWatt (Belgium) and is currently aiding the set-up of a similar scheme with the Association of the Rhodope municipalities (Bulgaria). This approach helps engaging LRAs and pushing forward energy efficiency investments.121 National authorities could support the creation of `one-stop shops' that aid LRAs in planning and developing energy efficiency measures, adaptation projects or sustainable infrastructure. `One-stop shops' could provide not only advice how to prepare successful projects but also match the projects with possible investors122. Facilitating adaptation at local level Adaptation strategies are often developed centrally at national, regional or sector level while a significant part of the required adaptation action will have to be taken at the municipal level and across economic sectors. Therefore, national and regional adaptation strategies should better reflect the needs of municipalities and encourage local-level planning of relevant investments. Moreover, it is important to clearly define competences and responsibilities on adaptation and climate risk management between different governance levels. Where local authorities are given responsibility, they should also be more involved in the decision-making and resource allocation processes.123 3.4 Recommendations for financial actors Providing new financial instruments for climate investments `Despite its extensive capacity, the finance system in Europe currently meets only a fraction of the climate adaptation investment needed at local, national and European level.'124 While there is an increasing number of financial instruments available for mitigation projects, such as energy efficiency and renewable energy, more blending facilities for climate change adaptation could be developed. The NCFF is a good example in this direction, but more facilities are needed to meet the financial need to make European cities more resilient. In 121 122 Interview with Climate Alliance, 29 June 2017. EU High Level Expert Group on Sustainable Finance, 2017, Financing a Sustainable European Economy, Interim Report, July 2017, viewed 21 July 2017, https://ec.europa.eu/info/sites/info/files/170713-sustainablefinance-report_en.pdf 123 N. Mabey et al., 2014, Underfunded, underprepared, underwater? Cities at risk, E3G. 124 European Environment Agency, 2017, Financing urban adaptation to climate change, EEA Report No 2/2017. 27 addition to creating specific facilities for adaptation, financial institutions could develop a systemic approach to re-evaluate and re-direct funding that promotes unsustainable activities125. In the area of climate change mitigation, financial instruments have so far been used mainly to finance energy projects. However, the scope could be extended to other types of mitigation projects, such as sustainable mobility, industrial emissions and sustainable agriculture. Developing non-thematic financing facilities LRAs face difficulties in meeting strict eligibility criteria that link financing platforms and facilities to specific themes. Thematic instruments risk undermining synergies between different types of climate, environmental and social measures (e.g. energy efficiency and improved air quality, mobility and social inclusion) and limiting innovation in the development of measures. To face this issue, financial institutions could provide more flexible financing facilities to LRAs that are not thematically oriented `to overcome barriers to action and allow aggregation of different type of investments in cities'.126 This would support LRAs in developing actions that are specifically suited to local needs, rather than focused on meeting restrictive selection criteria. Making climate finance more accessible for LRAs Even though financial instruments for climate investments from both public and private sources exist, they are not always easily accessible to LRAs e.g. due to restrictions regarding the possible beneficiaries, stringent eligibility criteria or complex application procedures. Therefore, it is important that financial instruments for climate action are made available specifically to LRAs or the requirements of existing instruments consider the administrative capacity constraints faced by many LRAs. For example, financial instruments can be tailored to the different needs, sizes and capabilities of LRAs to leverage investment127. Specific instruments can also be set up to finance small municipal projects or bundles of small municipal projects. Meanwhile, the eligibility criteria of existing financing options can be extended or modified to allow public-sector actors such as LRAs to be beneficiaries. Setting climate action targets and criteria for investments Climate change impacts are likely to affect investors' portfolios resulting in calls for divestment from fossil fuel projects and setting climate action requirements 125 126 European Environment Agency, 2017, Financing urban adaptation to climate change, EEA Report No 2/2017. Climate Alliance, Eurocities, Energy Cities, RES Coop, Énergies POSIT'IF, 2017, Joint statement on local energy efficiency financing, viewed 10 July 2017, http://www.climatealliance.org/ 127 Climate Alliance, 2015, EIB consultation on financing climate action, 16 March 2015, viewed 21 July 2017, http://www.eib.org/; Committee of the Regions, 2015, Contribution of the Committee of the Regions to the stakeholder consultation of the European Investment Bank on the Bank's approach to supporting climate action, viewed 21 July 2017, http://www.eib.org/ 28 for new investments. This is particularly relevant for public banks (e.g. EIB, national development or investment banks) or other institutional investors whose responsibility is to act in the public's interest128. Therefore, setting climaterelated targets and criteria for investments can free up funds from fossil fuel projects and reduce the perceived risk of mitigation and adaptation projects resulting in more finance available for climate investments. More specifically, public banks and investors can: define volume targets about the minimum amount of climate investments e.g. the EIB has a 25% climate target for its lending portfolio129; define standards and a taxonomy of climate projects e.g. a group of multi-lateral development banks including the EIB apply a common set of criteria to classify investments as mitigation or adaptation action130; define climate-related criteria for projects to be eligible for financing e.g. energy efficiency improvements, GHG emission reductions, resilience131; consider the overall climate impacts of the portfolio (e.g. by measuring GHG emissions, applying a carbon price) and favour projects with mitigation and adaptation benefits132. + Developing internal competence on climate projects Although it is often pointed out that LRAs lack the necessary knowledge to access climate finance and implement mitigation and adaptation projects, little attention is given to the specific competences of the financial actors that provide climate finance. Financial actors should also be knowledgeable about climate change measures and the specific needs of climate finance. Therefore, internal training tailored to climate finance in financial institutions could be beneficial133. 128 EU High Level Expert Group on Sustainable Finance, 2017, Financing a Sustainable European Economy, Interim Report, July 2017, viewed 21 July 2017, https://ec.europa.eu/info/sites/info/files/170713-sustainablefinance-report_en.pdf 129 EIB, 2017, Climate and environment, viewed on 21 July 2017, http://www.eib.org/ 130 2015 Joint Report on Multilateral Development Banks' Climate Finance, August 2016, viewed 31 July 2017, http://www.eib.org/attachments/documents/joint_mdb_report_on_climate_finance_2015.pdf 131 EIB, 2015, EIB Climate Action Public Consultation, Issue Matrix, viewed 21 July 2017, http://www.eib.org/ 132 EIB, 2015, EIB Climate Action Public Consultation, Issue Matrix, viewed 21 July 2017, http://www.eib.org/ 133 Interview with Low Carbon City Lab, 27 July 2017. 29 Annex 1: List of EU and international climate financing options Table 1 Overview of EU and international climate finance options available to LRAs Fund/ programme Administrative body Field Sector/ area EU climate financing options Thematic objectives 4 `Supporting the shift towards a low-carbon economy in all sectors' and 5 `Promoting climate change adaptation, risk prevention and management' are particularly relevant for climate action under the ERDF. INTERREG can support projects in the same fields as ERDF. This fund is part of INTERREG. CIVITAS is financed by ERDF. UIA is financed by ERDF. Advice provided on the use of INTERREG Thematic objectives 4 `Supporting the shift towards a low-carbon Financing vehicle Additional information (if relevant) ERDF DG REGIO Adaptation and mitigation Sustainable energy and transport, energy efficiency and building retrofits, flood prevention, development of risk monitoring systems and adaptation strategies Grants and financial instruments ETC or INTERREG DG REGIO Adaptation and mitigation International cooperation projects in the same areas as ERDF Sustainable urban development Sustainable urban mobility Urban challenges, including energy transition Same as INTERREG Sustainable energy and transport, energy efficiency and building Grants URBACT III CIVITAS DG REGIO DG MOVE Adaptation and mitigation Mitigation Grants Grants UIA INTERACT III DG REGIO DG REGIO Mitigation Adaptation and mitigation Grants TA Grants and financial instruments CF DG REGIO Adaptation and mitigation 30 Fund/ programme Administrative body Field Sector/ area retrofits, flood prevention, development of risk monitoring systems and adaptation strategies Financing vehicle Additional information (if relevant) economy in all sectors' and 5 `Promoting climate change adaptation, risk prevention and management' are particularly relevant for climate action under the CF. The CF is available specifically to the least developed EU regions. Although the ESF is not mainly targeted to climate action, some of the thematic objectives can be used to support mitigation measures (e.g. under thematic objective 10 `Investing in education, training and lifelong learning'). Nevertheless, the objectives supported by the ESF remain rather broad and it is yet unknown if climate action projects have been supported in the period 2014-2020. Union priority 5 `promoting resource efficiency and supporting the shift towards a lowcarbon and climateresilient economy in agriculture, food and forestry sector' is ESF DG EMPL DG REGIO Mitigation and adaptation Developing skills in climate action and sustainability sectors of the economy, training how to adapt to the impacts of climate change in the workplace Grants and financial instruments EAFRD DG AGRI Adaptation and mitigation Sustainable energy, water efficiency, reduction of GHG emissions in agriculture Grants and financial instruments 31 Fund/ programme Administrative body Field Sector/ area Financing vehicle Additional information (if relevant) particularly relevant for climate action under the EAFRD. Union priorities 1 and 2 `promoting environmentally sustainable, resourceefficient, innovative, competitive and knowledge-based fisheries and aquaculture' are particularly relevant for climate action under the EMFF. The average project size should be minimum EUR 3 million for the funding period (7 years). EMFF DG MARE Adaptation and mitigation Smart, sustainable fisheries (including energy efficiency and adaptation measures ) Grants and financial instruments CLLD DG REGIO, DG AGRI, DG MARE, DG EMPL Adaptation and mitigation Capacity building, training and networking related to climate change and the transition to a low carbon society Low carbon economy, adaptation and risk prevention management, sustainable transport Same as the ESIF Same as the ESIF Adaptation, mitigation and climate governance Green and blue infrastructure in cities Grants ITI DG REGIO, DG AGRI, DG MARE, DG EMPL Adaptation and mitigation Grants, repayable assistance and financial instruments PDA and TA on ESIF projects TA on ESIF financial instruments Grants Financial instruments This is an advisory service. JASPERS FI-Compass LIFE NCFF DG REGIO and EIB EIB and DG REGIO DG ENV and DG CLIMA EIB Adaptation and mitigation Adaptation and mitigation Adaptation and mitigation Adaptation 32 Fund/ programme Administrative body Field Sector/ area Financing vehicle Additional information (if relevant) The PF4EE offers indirect finance to LRAs through financial intermediaries (e.g. Crédit Coopératif in France and BIPER in Italy). Horizon 2020 supports research in various areas, the most relevant for climate action are the themes under the seven Societal Challenges including: `Secure, clean and efficient energy'; `Smart, green and integrated transport' and `Climate action, environment, resource efficiency and raw materials'. Nevertheless, research under other societal challenges such as health or food security and agriculture might have relevance for adaptation. The Horizon 2020 PDA facility requires a minimum expected leverage factor of 15 i.e. the triggered investment must be at least 15 times the PDA support received. PDA grants are paid in full only if this minimum leverage factor is met. PF4EE EIB Mitigation Energy efficiency Financial instruments H2020 DG RTD and a number of EU executive agencies (REA, EASME, INEA) Adaptation and mitigation Research and innovation in low-carbon energy, energy efficiency, sustainable transport, adaptation and ecosystems, health, food security and other themes relevant for the EU 2020 Strategy Grants, PDA 33 Fund/ programme Administrative body Field Sector/ area Financing vehicle Additional information (if relevant) Otherwise the EU support, in part or in full, must be reimbursed. In order to receive ELENA funding the total investment of the programme to be supported must be at least 20 times the amount of the ELENA grant assistance i.e. it must achieve a minimum expected leverage factor of 20. The beneficiary is obliged to reimburse, in part or in full, the contribution received if the minimum leverage factor is not achieved. Although adaptation projects could be possibly financed by EFSI, the projects have to be economically viable. ELENA EIB and KfW Adaptation and mitigation Same as H2020, ESIF or the other relevant financing sources TA and PDA EFSI EIB Mitigation Energy efficiency, renewable energy and sustainable transport Same as EFSI Energy efficiency and renewable energy Financial instruments (guarantees) EIAH EEEF EIB EIB, Deutsche Bank and CDP Mitigation Mitigation TA Financial instruments The EEEF includes a TA Facility to support the preparation of projects. International climate financing options Energy efficiency, renewable energy, sustainable transport, water measures Direct and indirect loans, guarantees and equity Projects must meet EIB's lending criteria to be eligible. EIB standard operations EIB Adaptation and mitigation 34 Fund/ programme EBRD ­ Green Economy Transition approach Sustainable Energy Finance Facilites Administrative body Field Sector/ area Energy efficiency, renewable energy, sustainable transport, water measures Sustainable energy Financing vehicle Additional information (if relevant) EBRD Adaptation and mitigation Direct and indirect loans, guarantees Credit lines to financial intermediaries Available only to EU countries that are considered transition economies (see footnote 39 in the report for a list of countries). Project promoters should contact the Operational Focal Point in their country135. LRAs in the CEB member countries are eligible to access CEB financing. However, target countries of the CEB are: Bulgaria, Croatia, Cyprus, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Romania, Slovakia and Slovenia. EBRD Mitigation Global Environment Facility (GEF) GEF Agencies134 Adaptation and mitigation Sustainable energy, adaptation projects Grants, Council of Europe Development Bank (CEB) financing CEB Adaptation and mitigation Flood protection, energy efficiency and sustainable transport Project loans for individual projects, programme loans for multi-projects programmes, Public Sector Financing Facility, Cross Sectorial Loan Programme 134 There are 18 GEF Agencies, of which the following ones are relevant for EU countries: EBRD, FAO, UNDP, UNEP, WB, Conservation International, International Union for Conservation of Nature. Global Environment Facility, 2017, GEF Agencies, viewed 2 August 2017, https://www.thegef.org/partners/gef-agencies 135 A list of national Operational Focal Points is available at https://www.thegef.org/focal_points_list. 35 Annex 2: National financing for climate action It should be noted that the financing options presented in this Annex represent a selection of the most important national financing sources for LRAs in Bulgaria, France, Ireland and Lithuania, as well as examples of local funds, rather than an exhaustive mapping. Climate finance options exclusively targeted to households or industry/companies have not been included as LRAs cannot directly receive support from such sources. Nevertheless, climate finance options available to households or companies are important for supporting wider mitigation and adaptation objectives at the local level. LRAs can play an intermediary role in connecting and supporting households or companies in using climate finance instruments. 36 Bulgaria Table 2 Overview of national public and private funding instruments for climate action in Bulgaria Financing options Field Financing source Type Financing vehicle Sector/area Short description In Bulgaria the ESIF are implemented through thematic national-level programmes. The most relevant Operational Programmes (ERDF and CF) for the period 2014-2020 are `Regions in growth', `Environment' and `Transport and transport infrastructure', which jointly support actions for energy efficiency improvements in buildings, sustainable urban transport and actions for flood risk management and recycling of municipal waste. Allocations to climate adaptation and risk prevention: EUR 78.5 million from CF and EUR 483.1 million from EAFRD. Allocations to low-carbon economy: EUR 1.2 billion from the ERDF, EUR 311.6 million from the EAFRD and EUR 1.3 million from the EMFF.137 In the previous financing period, allocations for flood risk management have successfully contributed to adaptation action e.g. in the city of Smolyan138. The EEA Financial Mechanism and Norwegian Financial Mechanism provide grants to 15 EU countries in Central and Southern Europe and the Baltics (including Bulgaria) to reduce economic and social disparities and strengthen cooperation. In the period 2014-2021 these two mechanisms will provide financial contributions in several priority sectors including `Environment, energy, climate change and low carbon National Programmes for the ESIF136 Adaptation and mitigation EU budget, national budget Public Grants and financial instruments Energy efficiency, renewable energy, sustainable transport, flood risk management, risk monitoring systems, preparation of adaptation plans EEA Financial Mechanism and Norwegian Financial Mechanism139 Adaptation and mitigation Governments of Iceland, Lichtenstein, Norway Public Grants Energy efficiency, renewable energy and other projects contributing to climate action 136 137 The OPs for the period 2014-2020 can be found here: https://www.eufunds.bg/programen-period-2014-2020/operativni-programi-2014-2020 (viewed 4 July 2017) European Commission, 2017, ESIF Data, viewed 13 July 2017, https://cohesiondata.ec.europa.eu/themes 138 European Environment Agency, 2017, Financing urban adaptation to climate change, EEA Report No 2/2017. 139 EEA grants, viewed 4 July 2017, http://eeagrants.org/What-we-do/EEA-and-Norway-Grants-2014-2021 37 Financing options Field Financing source Type Financing vehicle Sector/area Short description economy'. With this programme Switzerland helps reduce economic and social disparities in the enlarged EU (including Bulgaria) by providing support in areas where e.g. Bulgaria needs to catch up, and in which Switzerland can offer know-how and expertise. The areas in which support is available include environment and one of the ongoing projects is for green public procurement. FLAG is a revolving mechanism for financing the development and implementation of economically and financially viable projects in the area of municipal infrastructure and for supporting the administrative capacity of municipalities with a view to absorbing EU funds. It aims to overcome the problem of cash shortage for municipalities when they develop project proposals or finance approved projects in the framework of the OPs, co-financed by the EU funds. The loans are administered through a Managing Bank and are exclusively available only to municipalities or municipal companies. Bulgarian-Swiss Cooperation Programme140 Adaptation and mitigation Government of Switzerland Public Grants Environment, including green public procurement Fund for local authorities and governments (FLAG)141 Adaptation and mitigation National budget Public Loans Areas supported by relevant EU funds Energy Efficiency and Renewable Sources Fund (EERSF)142 Mitigation Global Environment Facility (through the World Bank), the Government of Austria and the Government of Bulgaria, Public Loans, Partial credit guarantees, Portfolio guarantees, Technical Assistance Energy efficiency, renewable energy, energy audits The EERSF provides financing and support for energy efficiency investment projects to companies, municipalities and private individuals. Renewable energy is supported only for own consumption and as an integral part of an energy efficiency investment. 140 141 Bulgarian-Swiss Cooperation Programme, viewed 4 July 2017, http://swiss-contribution.bg/en Fund for local authorities and governments ­ Bulgaria, viewed 4 July 2017, http://www.flag-bg.com/?l=2 142 Energy Efficiency and Renewable Sources Fund ­ Bulgaria, viewed 4 July 2017, http://www.bgeef.com/ 38 Financing options Field Financing source energy companies National budget, international sale of GHG quotas Private resources Type Financing vehicle Sector/area Short description National Trust EcoFund (NTEF)143 Energy and Energy Efficiency Fund144 Adaptation and mitigation Public Grants Sustainable transport and other climate action projects The NTEF provides support through two relevant programmes ­ Investment Climate Programme and Investment Climate Programme ­ Electric Vehicles. Private ESCO contracts Energy efficiency Mitigation This is the first fund in Bulgaria that invests in securities and re-invests in contracts with energy service companies (ESCO contracts) for a guaranteed energy efficiency result. France Table 3 Overview of national public and private funding instruments for climate action in France Financing options Field Financing source Type Financing vehicle Sectors/areas Energy efficiency, renewable energy, sustainable transport, flood risk management, development of adaptation plans Short description France implements the ESIF through National and Regional Programmes. Both regions and municipalities can be final beneficiaries of ESIF. 2014-2020 ESIF allocations to climate adaptation and risk prevention in France: EUR 530.9 million form the ERDF and EUR 4.3 ESIF Adaptation and mitigation EU and national budgets Public Grants and financial instruments 143 144 National Trust Eco-fund ­ Bulgaria, viewed 4 July 2017, www.ecofund-bg.org Covenant of Mayors, Sustainable Energy Action Plan of Smolyan Municipality, viewed 5 July 2017, http://www.covenantofmayors.eu/about/signatories_en.html?city_id=6892&seap 39 Financing options Field Financing source Type Financing vehicle Sectors/areas Short description billion from the EAFRD. 2014-2020 ESIF allocations to lowcarbon economy: EUR 4.3 billion from the ERDF, EUR 530.2 million from the EAFRD and EUR 19.6 million from the EMFF.145 EEEF Mitigation EU, investment banks and private investors PPP Financial instruments and TA Energy efficiency and renewable energy The EEEF supported two energy efficient heating systems in the cities of Orléans (EUR 5.1m) and Rennes (EUR 7.3m).146 OSER is a local public company whose shareholders are the RhôneAlpes Region and the participating municipalities. Financing (soft loans) and PDA are available to the shareholders for energy refurbishment of public buildings. Any municipality in the region can become a shareholder. Funds (EUR 336 million for the period 2015-2017) for big metropolises to support their innovative projects in sustainable transport and energy, as well as urban management. Zero-interest loans for renovation of public buildings available during the Regional Energy Services Operator (OSER)147 Mitigation EEEF, Caisse des Dépôts and own resources Loans PDA Loans and TA Energy efficiency and renewable energy City of tomorrow148 Mitigation (adaptation measures can be integrated in urban management projects) Mitigation Caisse des Dépôts Public Grants and equity Sustainable transport and energy, urban management Zero interest green 145 146 Caisse des Dépôts Public Loans Energy efficiency European Commission, 2017, ESIF Data, viewed 13 July 2017, https://cohesiondata.ec.europa.eu/themes European Energy Efficiency Fund, viewed 13 July 2017, http://www.eeef.eu/technical-assistance.html 147 Energy Cities, 2014, Financing schemes increasing energy efficiency and renewable energy use in public and private buildings, Comparative study for the INFINITE Solutions project. 148 Caisse des Dépôts, Ville de demain, viewed 30 June 2017, http://www.caissedesdepots.fr/ville-de-demain 40 Financing options growth loan149 Field Financing source Type Financing vehicle Sectors/areas Short description period 2016-2017. Loan duration between 15 and 20 years. Green growth loan150 Mitigation Caisse des Dépôts Public Loans Energy efficiency renovations of public buildings, clean transport, renewable energy Loans for energy efficiency renovations of public buildings, clean transport, renewable energy. Loan duration between 20 and 40 years. Interest rate linked to the inflation rate + 0.75 pp. Loans for urban projects, including transport infrastructure, production and transmission of renewable energy. Interest rate linked to the inflation rate + 100 pp. Loans for urban projects, including transport infrastructure, production and transmission of renewable energy. Interest rate linked to the inflation rate + 60 pp. Funding for installation of heating systems based on renewable energy (e.g. solar thermal and geothermal). Funds cumulable with EU funds. Local Authorities in the region `Centre' can obtain soft loans (preferential interest rate compared Urban project loan151 Mitigation Caisse des Dépôts Public Loans Sustainable transport and renewable energy Urban development loan152 Mitigation Caisse des Dépôts Public Loans Sustainable transport and renewable energy Heating Fund153 Investment Fund for Green Mitigation French Environment and Energy Management Agency (ADEME) EIB and local commercial banks155 Public Grants Renewable energy Mitigation Private Loans Renewable energy and energy efficiency 149 150 Caisse des Dépôts, Prêt Croissance Verte à taux zero, viewed 30 June 2017, https://www.prets.caissedesdepots.fr/IMG/pdf/fiche_pcv0.pdf Caisse des Dépôts, Prêt Croissance Verte, viewed 30 June 2017, https://www.prets.caissedesdepots.fr/pcv-offre-sur-mesure.html 151 Caisse des Dépôts, Prêt Projet Urbain, viewed 30 June 2017, https://www.prets.caissedesdepots.fr/ppu.html 152 Caisse des Dépôts, Prêt Renouvellement Urbain Aménagement, viewed 30 June 2017, https://www.prets.caissedesdepots.fr/pru-am.html 153 ADEME, Fonds chaleur 2017, viewed 30 June 2017, http://www.ademe.fr/sites/default/files/assets/documents/instruct_generales_fds_chal_2017_06-04-17.pdf 41 Financing options Economy Preveo154 Field Financing source Type Financing vehicle Sectors/areas Short description to market levels) for renewable energy, energy efficiency renovations and construction of low energy buildings. Picardie Pass Rénovation Supporting Funds for Local Investment 156 Mitigation The project benefits from ELENA Public Financial instruments and TA Energy efficiency Publicly-owned company in charge of delivering `zero upfront cost' retrofitting services to households All French cities can apply for energy transition and green growth projects (EUR 500 million allocated to this priority in 2016) The Ile-de-France region and the city of Paris have both issued green bonds, which could serve as example to other French LRAs. Green & Sustainability Bond are the municipal bonds issued by the Ilede-France region. The proceeds support sustainable development projects, including renewable energy, energy efficiency and sustainable transport. Climate adaptation measures can be Adaptation and mitigation National government Public Grants Sustainable energy and green growth Issuance of green bonds Adaptation and mitigation Financial market Private Bonds Renewable energy, energy efficiency, sustainable transport, adaptation measures in biodiversity, water and building renovation projects 155 154 Banque Populaire Val de France, Caisse d'Epargne, Crédit Agricole de la Touraine et du Poitou, Centre Ouest, Centre Loire et Val de France. Energy Cities, 2014, Financing schemes increasing energy efficiency and renewable energy use in public and private buildings, Comparative study for the INFINITE Solutions project. 156 Ministère de l'Aménagement du Territoire, de la Ruralité et des collectivités territoriales, Le fonds de soutien à l'investissement local, viewed 30 June 2017, https://www.territoires.gouv.fr/le-fonds-de-soutien-a-linvestissement-local-fsil/ 42 Financing options Field Financing source Type Financing vehicle Sectors/areas Short description imbedded in biodiversity, water and building renovation projects.157 Similarly, the city of Paris issued green bonds in 2015 to finance renewable energy, energy efficiency, low-carbon transport and climate adaptation (green surfaces and urban re-forestation).158 Medium or long-term financing (from 3 to 15 years) for projects that support GHG reduction. Available to companies and all non-for-profit organisations. Loan for low-carbon economy investments (e.g. production of renewable energy, circular economy etc.), starting from EUR 12,000 for a duration between 3 and 15 years. Only in the regions Nord-Pas de Calais and Picardie. PREVair159 Mitigation Crédit Coopératif Private (Commercial bank) Loans Reduction of GHG emissions Loan REV3160 Mitigation Crédit Coopératif and CCI Nord de France Private (Commercial bank) Loans Sustainable energy 157 Climate Bonds Initiative, 2014, viewed 3 July 2017, https://www.climatebonds.net/2014/05/%C3%AEle-de-france-issues-eur600m-830m-12yr-aa-green-muni-they-hadso-many-orders-one-hour 158 Climate Bonds Initiative, 2015, viewed 3 July 2017, https://www.climatebonds.net/2015/11/update-vive-paris-green-bond-mkt-builds-cop21-host-city-paris-issuinginaugural-green-bond159 Crédit Coopératif, viewed 3 July 2017, http://www.credit-cooperatif.coop/ 160 Crédit Coopératif, viewed 3 July 2017, http://www.credit-cooperatif.coop/ 43 Ireland Table 4 Overview of national public and private funding instruments for climate action in Ireland Financing options Field Financing source Type Financing vehicle Sectors/areas Short description In the 2014-2020 period two Regional OPs (Border, Midland and Western ROP and Southern and Eastern ROP) will implement the ESIF in Ireland and support the shift towards a low-carbon economy. Allocations to climate adaptation and risk prevention: EUR 1.3 billion from the EAFRD. Allocations to the low-carbon economy: EUR 175 million from the ERDF, EUR 404.4 million from the EAFRD and EUR 2.4 million from the EMFF.162 The Limerick and Clare Education and Training Board benefited from the EEEF TA for building upgrades and renewable energy installations for a total of EUR 336,000. The Roscommon County Council received EUR 184,000 for TA for a biomass district heating project.163 Through the Better Energy Communities initiative, the SEAI Regional programmes for the ESIF161 Adaptation and mitigation EU budget, national budget Public Grants and financial instruments Energy efficiency, renewable energy, sustainable transport, flood risk management, development of adaptation plans EEEF Mitigation EU budget and investment banks and private investors PPP Financial instruments and TA Energy efficiency and renewable energy Better Energy Communities164 161 162 Mitigation SEAI Public Grants Energy efficiency The two ROPs are available at: http://ec.europa.eu/regional_policy/ European Commission, 2017, ESIF Data, viewed 13 July 2017, https://cohesiondata.ec.europa.eu/themes 163 European Energy Efficiency Fund, viewed 13 July 2017, http://www.eeef.eu/technical-assistance.html 164 Sustainable Energy Authority of Ireland, Deep Retrofit Pilot Programme, viewed 5 July 2017, http://www.seai.ie/Grants/Better_Energy_Communities/ 44 Financing options Field Financing source Type Financing vehicle Sectors/areas Short description offers grant supports for community energy projects such as energy efficiency improvements in homes, community, private and public buildings. Although the end beneficiaries of the Deep Retrofit Pilot Programme will be households, the support is administered through community groups, local authorities and energy agencies. The offered services will aim for significant upgrades of buildings toward nearly zero energy requirements and integration of renewable energy solutions. Through the Electric Vehicle Grant Scheme, the SEAI offers grant support to private and public sector consumers for purchasing electric vehicles. The Fund can support various types of environmental projects including `partnership projects, that involve local authorities, to improve the quality of the environment for particular local communities'. Deep Retrofit Pilot Programme165 Mitigation SEAI Public Grants Energy efficiency and renewable energy Electric Vehicle Grant Scheme166 Mitigation SEAI Public Grants Sustainable transport Environmental Fund167 Adaptation and mitigation Revenues from the levies on plastic shopping bags and the landfill of waste Public No information Environment 165 166 Further details: http://www.seai.ie/Grants/Deep-Retrofit-Programme/ Further details: http://www.seai.ie/Grants/Electric_Vehicle_Grant_Scheme/ 167 Further details: http://www.dccae.gov.ie/en-ie/environment/topics/environmental-protection-and-awareness/environmental-fund/Pages/default.aspx 45 Lithuania Table 5 Overview of national public and private funding instruments for climate action in Lithuania Financing options Field Financing source Type Financing vehicle Sectors/areas Short description In addition to grants, Lithuania used financial instruments under the ESIF in the period 2007-2013 to establish the VIPA energy efficiency fund for residential buildings. During the current period (2014-2020), blending was used to support energy efficiency investments at national and local level (see below for more details about the Energy Efficiency Fund). Lithuania implements the ERDF, CF and ESF with the Lithuanian multifund Operational Programme. 2014-2020 ESIF allocations to climate adaptation and risk prevention: EUR 4.8 million from the ERDF, EUR 123.3 million from the CF and EUR 287.2 million from the EAFRD. 2014-2020 ESIF allocations to the low-carbon economy: EUR 608.5 million from the ERDF, EUR 455 million from the CF, EUR 176.1 million from the EAFRD and EUR 418.1 thousand from the EMFF.168 National Programmes of ESIF Adaptation and mitigation EU and national budgets Public and private Grants and financial instruments Energy efficiency, renewable energy, sustainable transport, flood risk management, development of adaptation plans 168 European Commission, 2017, ESIF Data, viewed 13 July 2017 at https://cohesiondata.ec.europa.eu/themes 46 Financing options Field Financing source Type Financing vehicle Sectors/areas Short description The ENEF was established by blending ESIF and private resources to finance energy efficiency projects. ENEF provides loans for energy efficiency investments in central government buildings and guarantees for modernization of cities' street lighting. Energy Efficiency Fund (ENEF)169 Mitigation Ministry of Finance, Ministry of Energy, Public Investment Development Agency Public and private (blending) Loans and guarantees Energy efficiency and public street lighting Climate Change Special Programme170 Adaptation and mitigation Assigned Amount Units and EU Emission Allowances; donations; penalties to operators. Public Grants Energy efficiency, renewable energy, environmentfriendly technologies, reforestation and afforestation, education programmes on climate change, and climate change management. A special programme to finance climate change mitigation and adaptation measures in Lithuania was launched in 2009. Programme for Environment and Climate Cooperation171 Adaptation and mitigation Nordic Council of Ministers and the Barents Hot Spots Facility Public Grants Climate projects in general Programme for Environment and Climate Co-operation between Nordic and North-West Russian non-commercial partners. It provides grant financing for cooperation projects that contribute to improvements of the environment and climate in North-West Russia. 169 170 VIPA (Public Investment Development Agency), Municipality grants, viewed 3 July 2017, http://vipa.lt/page/enefen Ministry of Environment of the Republic of Lithuania, Climate Change Special Programme: overview, viewed 3 July 2017, http://www.am.lt/VI/en/VI/index.php#a/538 171 Nordic Environment Finance Corporation (NEFCO), Programme for Environment and Climate Co-operation, viewed 3 July 2017, https://www.nefco.org/work-us/ourservices/grants/programme-environment-and-climate-co-operation 47 Financing options Field Financing source Type Financing vehicle Sectors/areas Short description Loans on market terms for energy efficiency, renewable energy district heating and pollution abatement. The maximum amount is EUR 5 million. Projects must be economically viable and have a positive environmental impact. Available also to Estonia, Latvia and Poland. NEFCO's Investment Fund172 Mitigation Nordic Environment Finance Corporation (NEFCO) Private Loans and equity Energy efficiency, renewable energy district heating and pollution abatement Municipality Grants173 Adaptation and mitigations National funding (managed by VIPA174) Public Grants Sustainable energy and transport, flood prevention, water measures and other adaptation projects eligible under ESIF National government grants available to municipalities to cofinance ESIF projects. 172 173 Nordic Environment Finance Corporation (NEFCO), Investment Fund, viewed 3 July 2017, https://www.nefco.org/work-us/our-services/loans-and-equity/investment-fund VIPA (Public Investment Development Agency), Municipality grants, viewed 3 July 2017, http://vipa.lt/page/municipality_grants 174 VIPA is the Lithuanian Public Investment Development Agency. 48 Annex 3: List of references African Development Bank, Asian Development Bank, European Bank for Reconstruction and Development, European Investment Bank, Inter-American Development Bank Group and World Bank Group, 2015 Joint Report on Multilateral Development Banks' Climate Finance, August 2016, viewed 31 July 2017, http://www.eib.org/attachments/documents/joint_mdb_report_on_climate_finance_2015.pdf Climate Alliance, 2015, EIB consultation on financing climate action, 16 March 2015, viewed 21 July 2017, http://www.eib.org/attachments/consultations/eib_climate_action_comments_cli matealliance_20150817_en.pdf Climate Alliance, 2016, Accounting rules creating barriers for mobilising energy efficiency investments, 21 June 2016, viewed 10 July 2017, http://www.climatealliance.org/fileadmin/Inhalte/7_Downloads/ClimateAlliance WrittenEvidence-1.pdf Climate Alliance, Eurocities, Energy Cities, RES Coop, Énergies POSIT'IF, 2017, Joint statement on local energy efficiency financing, viewed 10 July 2017, http://www.climatealliance.org/newsroom/news/news-detail/networks-releasejoint-statement-on-energy-efficiency-financing.html Climate Bonds Initiative, 2015, Bonds and Climate Change: the state of the market in 2015, viewed 5 July 2017, https://www.climatebonds.net/files/files/CBIHSBC%20report%207July%20JG01.pdf. Climate Bonds Initiative, 2017, Green Bonds Highlights 2016, viewed 5 July 2017, https://www.climatebonds.net/files/files/2016%20GB%20Market%20Roundup. pdf. Cochu, A. et al., 2016, Study on the potential of green bond finance for resource-efficient investments, November 2016, viewed 5 July 2017, http://ec.europa.eu/environment/enveco/pdf/potential-green-bond.pdf Committee of the Regions, 2015, Contribution of the Committee of the Regions to the stakeholder consultation of the European Investment Bank on the Bank's approach to supporting climate action, viewed 21 July 2017, http://www.eib.org/attachments/consultations/eib_climate_action_comments_co r_20150817_en.pdf 49 Committee of the Regions, 2016, Results of the CoR online consultation on obstacles to investments at local and regional level, September 2016. Covenant of Mayors for Climate & Energy, 2016, Quick reference guide on financing opportunities for local climate and energy actions (2014-2020). Covenant of Mayors, 2016, Sustainable energy investment in European local authorities, Report based on a survey by the Covenant of Mayors Office, May 2016. COWI, 2016, Mainstreaming of climate action into ESI Funds ­ Final report, European Commission DG Climate Action. De Boer, F., 2015, White Paper: Barriers to Private Sector Investments into Urban Climate Mitigation Projects, CDP with support from Low Carbon City Lab. Deng-Beck, C. and Price, L. 2016, Gap Analysis Report: Closing the gap between finance and urban climate action, viewed 10 July 2017, http://elib.iclei.org/wp-content/uploads/2016/03/Gap-analysis-report_final_20160307final.pdf E3G, 2014, Cities and resilience to climate change ­ Workshop summary, viewed 10 July 2017, https://www.e3g.org/docs/E3G_Workshop011014_Writeup.pdf. E3G, 2016, Stakeholders' letter on `Reviewing accounting rules and/or debt treatment for energy efficiency investments will help close the energy efficiency financing gap in Europe', viewed 14 July 2017, https://www.e3g.org/docs/Stakeholders_Letter__Accounting_rules_Energy_efficiency.pdf. Ecofys and DIW Econ, 2016, How can EU climate financing be improved to achieve the 2030 climate and energy targets?, Discussion paper, 09 May 2016. EIB, 2015, EIB Climate Action Public Consultation, Issue Matrix, viewed 21 July 2017, http://www.eib.org/attachments/consultations/eib_car_final_issues_matrix_20150922_en.pdf Energy Cities, 2014, Financing schemes increasing energy efficiency and renewable energy use in public and private buildings, Comparative study for the INFINITE Solutions project. Energy Cities, 2015, Unlocking investment in cities: ELENA-EIB technical assistance facility ­ Project review in five European local authorities, viewed 12 50 July 2017, http://www.energy-cities.eu/IMG/pdf/reviewelenaeib_projects_june2015.pdf Energy Efficiency Financial Institutions Group, 2015, Energy Efficiency ­ the first fuel for the EU Economy: How to drive new finance for energy efficiency investments, Final report. EU High Level Expert Group on Sustainable Finance, 2017, Financing a Sustainable European Economy, Interim Report, July 2017, viewed 21 July 2017, https://ec.europa.eu/info/sites/info/files/170713-sustainable-financereport_en.pdf EU Sustainable Energy Week, Conference `Accelerating the clean energy transition ­ financing energy efficiency at the local level', Brussels, 21 June 2017. European Commission, 2016, Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee, the Committee of the Regions and the European Investment Bank, Clean Energy for all Europeans, Brussels, 30.11.2016, COM(2016) 860 final. European Commission, Horizon 2020 Work Programme 2014-15, '19. General Annexes Revised', Commission Decision C (2014)4994 of 22 July 2014, part 18 European Environment Agency, 2017, Financing urban adaptation to climate change, EEA Report No 2/2017. Green Bonds for Cities project, Factsheet, viewed 5 July 2017, http://local.climate-kic.org/wp-content/uploads/2016/09/160825_Flyer_GreenBonds-for-Cities_LR.pdf Hancock, C., 2017, `Hayes says Ireland should issue green bonds', The Irish Times, 26 January 2017, viewed 5 July 2017, https://www.irishtimes.com/business/economy/hayes-says-ireland-should-issuegreen-bonds-1.2951120. Kommuninvest, 2017, PRESS RELEASE: Kommuninvest now behind the three largest green bonds ever issued out of Sweden, 17 May 2017, viewed 20 July 2017, http://kommuninvest.se/2017/05/press-release-kommuninvest-nowbehind-the-three-largest-green-bonds-ever-issued-out-of-sweden/ Lorenz, S. et al. 2016, `Use of Climate Projections in Adaptation Planning: Lessons from England & Germany', SRI Briefing Note 9, University of Leeds, viewed 12 July 2017, http://www.see.leeds.ac.uk/fileadmin/Documents/research/sri/briefingnotes/SRI BNs-9.pdf.pdf 51 Mabey, N. et al., 2014, Underfunded, underprepared, underwater? Cities at risk, E3G. OECD, 2010, Cities and Climate Change, OECD Publishing. http://dx.doi.org/10.1787/9789264091375-en. Regulation (EU) 2015/1017 on the European Fund for Strategic Investments, the European Investment Advisory Hub and the European Investment Project Portal. Sullivan, R., A. Gouldson, and P. Webber, 2012, `Funding low carbon cities: local perspectives on opportunities and risks', Climate Policy, 13 (4), pp. 514529. URBACT, 2016, The URBACT III Programme ­ Programme Manual 6th Version, October 2016, viewed 17 July 2017, http://urbact.eu/sites/default/files/programme_manual_v6_oct_2016_1.pdf. Websites consulted ADEME, Fonds chaleur 2017, viewed 30 June 2017, http://www.ademe.fr/sites/default/files/assets/documents/instruct_generales_fds _chal_2017_06-04-17.pdf Belfius, Smart Cities, Climate Action & Circular Economy, viewed 1 August 2017, https://www.belfius.be/publicsocial/FR/Themes/Smart-Cities/index.aspx Build Up, 2016, De-risking Energy Efficiency Platform, viewed 18 July 2017 at http://www.buildup.eu/en/explore/links/de-risking-energy-efficiency-platformdeep-0 Bulgarian-Swiss Cooperation Programme, viewed 4 July 2017, http://swisscontribution.bg/en Caisse des Dépôts, Prêt Croissance Verte à taux zéro, viewed 30 June 2017, https://www.prets.caissedesdepots.fr/IMG/pdf/fiche_pcv0.pdf Caisse des Dépôts, Prêt Croissance Verte, viewed 30 June 2017, https://www.prets.caissedesdepots.fr/pcv-offre-sur-mesure.html Caisse des Dépôts, Prêt Projet Urbain, viewed 30 June 2017, https://www.prets.caissedesdepots.fr/ppu.html Caisse des Dépôts, Prêt Renouvellement Urbain Aménagement, viewed 30 June 2017, https://www.prets.caissedesdepots.fr/pru-am.html Caisse des Dépôts, Ville de demain, viewed 30 June 2017, http://www.caissedesdepots.fr/ville-de-demain 52 CITYnvest, 2017, viewed 04 July 2017, http://www.citynvest.eu/ Climate Bonds Initiative, 2014, viewed 3 July 2017, https://www.climatebonds.net/2014/05/%C3%AEle-de-france-issues-eur600m830m-12yr-aa-green-muni-they-had-so-many-orders-one-hour Climate Bonds Initiative, 2015, viewed 3 July 2017, https://www.climatebonds.net/2015/11/update-vive-paris-green-bond-mktbuilds-cop21-host-city-paris-issuing-inaugural-green-bondClimate-KIC, viewed 14 July 2017, http://www.iclei.org/fileadmin/PUBLICATIONS/Brochures/Matchmaker_twopager_01.pdf Council of Europe Development Bank, The CEB and the environment, viewed 1 August 2017, http://www.ruralenergy.eu/uploads/ModuleXtender/Funding/7/managementenvironment-1-.pdf Covenant of Mayors, Sustainable Energy Action Plan of Smolyan Municipality viewed 5 July 2017, http://www.covenantofmayors.eu/about/signatories_en.html?city_id=6892&seap Crédit Coopératif, viewed 3 July 2017, http://www.credit-cooperatif.coop/offrepersonnes-morales/credits-dinvestissement/prevair-pour-personnes-morales/ Crédit Coopératif, viewed 3 July 2017, http://www.credit-cooperatif.coop/offrepersonnes-morales/credits-dinvestissement/pret-rev3-pour-la-troisiemerevolution-industrielle/ Department of Communications, Climate Action & Environment, Irish government, Environmental Fund, viewed 5 July 2017, http://www.dccae.gov.ie/en-ie/environment/topics/environmental-protectionand-awareness/environmental-fund/Pages/default.aspx EBRD, Sustainable Energy Initiative, viewed 1 August 2017, http://www.ebrd.com/what-we-do/sectors-and-topics/sustainable-energyinitiative.html EEA Grants, viewed 4 July 2017, http://eeagrants.org/What-we-do/EEA-andNorway-Grants-2014-2021 EIB, 2016, Urban Agenda: Smart Cities make a beautiful world, viewed 1 August 2017, http://www.eib.org/infocentre/blog/all/urban-agenda-smart-cities 53 EIB, 2017, Blending: Natural Capital Financing Facility - Boosting investment for biodiversity and nature-based adaptation to climate, viewed 28 June 2017, http://www.eib.org/products/blending/ncff/index.htm EIB, 2017, Blending: Private Finance for Energy Efficiency (PF4EE), viewed 28 June 2017, http://www.eib.org/products/blending/pf4ee/index.htm EIB, 2017, Climate and environment, viewed 21 July 2017: http://www.eib.org/projects/priorities/climate-and-environment/index.htm EIB, 2017, ELENA ­ Supporting investment in energy efficiency and sustainable transport, viewed 1 August 2017, http://www.eib.org/products/advising/elena/index.htm EIB, 2017, European Fund for Strategic Investments, viewed 1 August 2017, http://www.eib.org/efsi/index.htm EIB, 2017, European Investment Advisory Hub, viewed 28 June 2017, http://www.eib.org/eiah/about/index.htm EIB, 2017, Projects: Ambiente Urbano Bologna V, viewed 1 August 2017, http://www.eib.org/projects/pipelines/pipeline/20160008 EIB, 2017, Supporting urban development (JESSICA), viewed 4 July 2017, http://www.eib.org/products/blending/jessica/index.htm Energy Efficiency and Renewable Sources Fund ­ Bulgaria, viewed 4 July 2017, http://www.bgeef.com/display.aspx EU Structural Funds, Bulgaria, viewed 4 July 2017, https://www.eufunds.bg/programen-period-2014-2020/operativni-programi2014-2020 European Commission, 2014, Regional Policy, Community-led Local Development, viewed 1 August 2017, http://ec.europa.eu/regional_policy/en/information/publications/brochures/2014/ community-led-local-development European Commission, 2014, Regional Policy, Guidance Fiche: Integrated Territorial Investment, http://ec.europa.eu/regional_policy/en/information/publications/guidelines/2014/ guidance-fiche-integrated-territorial-investment-iti European Commission, 2015, Regional Policy, European Territorial Cooperation, viewed 1 August 2017, http://ec.europa.eu/regional_policy/en/policy/cooperation/european-territorial/ 54 European Commission, 2017, Environment, LIFE Programme, viewed 1 August 2017, http://ec.europa.eu/environment/life/ European Commission, 2017, ESIF Data, viewed 13 July 2017, https://cohesiondata.ec.europa.eu/themes European Commission, 2017, ESIF, viewed 4July2017, https://ec.europa.eu/info/funding-tenders/european-structural-and-investmentfunds_en European Commission, European Structural and Investment Funds, viewed 1 August 2017, https://ec.europa.eu/info/funding-tenders/european-structural-andinvestment-funds_en European Commission, Horizon 2020 ­ Programme sections, viewed 28 June 2017, https://ec.europa.eu/programmes/horizon2020/en/h2020-sections European Commission, Horizon 2020, viewed 1 August 2017, https://ec.europa.eu/programmes/horizon2020/ European Energy Efficiency Fund, Technical Assistance, viewed on 13 July 2017 at http://www.eeef.eu/technical-assistance.html European Energy Efficiency Fund, viewed 28 June 2017, http://www.eeef.eu/objective-of-the-fund.html European Environment Agency, 2016, Climate-ADAPT, Case study on Climate bond financing adaptation actions in Paris (2016), viewed 14 July 2017, http://climate-adapt.eea.europa.eu/metadata/case-studies/climate-bondfinancing-adaptation-actions-in-paris FI Compass, Financial instruments for energy efficiency in the programming period 2014-2020, viewed 17 July 2017, https://www.ficompass.eu/sites/default/files/publications/presentation_20161020_vienne_agne _kazlauskaite_1.pdf Fund for local authorities and governments ­ Bulgaria, viewed 4 July 2017, http://www.flag-bg.com/?l=2 Future for Rural Energy in Europe, Funding, viewed 28 June 2017, http://www.rural-energy.eu/funding/7/367/COUNCIL-OF-EUROPEDEVELOPMENT-BANK/#.WVOcnZKGOUn Gaelectric, 2016, Ireland targets emerging environmental finance market, viewed 5 July 2017, http://www.gaelectric.ie/ireland-targets-emergingenvironmental-finance-market/ 55 Global Environment Facility, viewed 28 June 2017, https://www.thegef.org/about/funding Global Environment Facility, viewed 9 August 2017, https://www.thegef.org/ ICLEI, Finance, viewed 14 July 2017, http://www.iclei.org/activities/finance.html INTERACT, 2017, viewed 04 July 2017, http://www.interact-eu.net/ JASPERS, 2017, viewed 04 July 2017, http://jaspers.eib.org/ Low Carbon City Lab, Climate-KIC, viewed 14 July 2017, http://local.climatekic.org/projects/climate-finance-for-territories/ Ministère de l'Aménagement du Territoire, de la Ruralité et des collectivités territoriales, Le fonds de soutien à l'investissement local, viewed 30 June 2017, https://www.territoires.gouv.fr/le-fonds-de-soutien-a-linvestissement-local-fsil/ Ministry of Environment of the Republic of Lithuania, Climate Change Special Programme: overview, viewed 3 July 2017, http://www.am.lt/VI/en/VI/index.php#a/538 National Trust Eco-fund ­ Bulgaria, viewed 4 July 2017, http://ecofundbg.org/en/home/ Nordic Environment Finance Corporation (NEFCO), Investment Fund, viewed 3 July 2017, https://www.nefco.org/work-us/our-services/loans-andequity/investment-fund Nordic Environment Finance Corporation (NEFCO), Programme for Environment and Climate Co-operation, viewed 3 July 2017, https://www.nefco.org/work-us/our-services/grants/programme-environmentand-climate-co-operation Sustainable Energy Authority of Ireland, Better Energy Communities, Deep Retrofit Pilot Programme, viewed 5 July 2017, http://www.seai.ie/Grants/Better_Energy_Communities/ Sustainable Energy Authority of Ireland, Deep Retrofit Pilot Programme, viewed 5 July 2017, http://www.seai.ie/Grants/Deep-Retrofit-Programme/ Sustainable Energy Authority of Ireland, Electric Vehicle Grant Scheme, viewed 5 July 2017, http://www.seai.ie/Grants/Electric_Vehicle_Grant_Scheme/ URBACT, 2017, viewed 04 July 2017, http://urbact.eu/ 56 VIPA (Lithuanian Public Investment Development Agency), Municipality grants, viewed 3 July 2017, http://vipa.lt/page/enefen 57 Annex 4: List of stakeholders interviewed Type of stakeholder City network City network Local and regional authorities network Network of organisations Think tank Think tank Financial institution International organisation Consultancy Name Climate Alliance Eurocities POLIS Climate-KIC, Low Carbon City Lab programme Institute for Climate Economics (I4CE) 2 Degrees Investing European Investment Bank Climate Bonds Initiative Ecofys (lead organisation responsible for delivering the Mayors-ADAPT project) 58 Annex 5: Methodological note Task 1: Desk research (part 1 of final report) Existing climate funding opportunities for Local and Regional Authorities (hereinafter LRAs) will be identified based on desk research in the following areas: EU and international funding (e.g. ESIF, LIFE, EIB, EBRD, Green Climate Fund); National public funding (e.g. development and investment banks); National private financing instruments (e.g. commercial banks, green bonds). Table 6 presents a preliminary non-exhaustive list of sources that provide information on the existing climate financing resources for LRAs. Table 6 Preliminary list of sources for the summary of existing climate finance instruments Public/ private EU/ national/ local Author/ organisation financing financing Covenant of Mayors (Overview of existing Public and private EU funding sources and cities' action plans) (incl. blending) Institute for Climate Economics (I4CE) Public and private (FR) EIB National Public and private EU (incl. blending) Other EU and national EU and national EU and national EU and national EU and national National National Cities Climate Finance Leadership Alliance Public and private (CCFLA) UNFCCC (national reports) National RE action plans to the EC National EE action plans to the EC Climate Bonds Initiative (CBI) Energies POSIT'IF (FR) Caisse des Dépôts (FR) KfW (DE) Public Public Public Private Public and private Private Private The research team will use the template illustrated in Table 7 to gather relevant information on the existing climate funding opportunities for LRAs. The template will allow an effective collection of information to cover different types of funding, as well as different Member States. 59 Table 7 Template for collecting information and examples of the existing climate funding opportunities for LRAs EU/ Funding Funding Climate mitigation Public/ private/ national instrument source and/or adaptation blending EU EU [...] ERDF ESIF Compass FI EU budget Climate mitigation Public and adaptation EU budget and Climate mitigation private Blending and adaptation resources The desk research on national public and private funding opportunities will be carried out for a selection of three or four EU Member States. The selection will be mainly based on the existence of national climate finance in the country and availability of information. To the extent possible, geographic representation of the selected countries will be sought. Possible countries to include are: Bulgaria, France, Germany, Netherlands, Italy, one Baltic State (e.g. Lithuania), Ireland. The research team will discuss the selection with the Committee of the Regions before finalisation. The main output of Task 1 will be Part 1 of the draft final report `Summary of the existing climate finance instruments that are available to EU regions and cities'. Task 2: Literature review (parts 2 and 3 of final report) The literature review on climate financing for LRAs will focus on the following research topics, as specified by the Committee of the Regions: The obstacles faced by LRAs in accessing the climate tools identified in Task 1; Recommendations to improve climate finance for LRAs. A preliminary non-exhaustive list of literature sources is presented below: Cities Climate Finance Leadership Alliance, 2015, The state of city climate finance 2015. Energy Efficiency Financial Institutions Group, 2015, Energy Efficiency ­ the first fuel for the EU Economy: How to drive new finance for energy efficiency investments. Germanwatch, 2015, Finding the Finance, Financing Climate Compatible Development in Cities. I4CE, 2016, Landscape of climate finance in France. Norden, 2015, Public-Private Partnerships for Climate Finance. ODI, 2015, Climate finance for cities How can international climate funds 60 best support low-carbon and climate resilient urban development?, Working paper 419. Sullivan R., A. Gouldson & P. Webber, 2013, `Funding low carbon cities: local perspectives on opportunities and risks', Climate Policy, 13:4, pp. 514-529. UNEP, 2014, Climate Finance for Cities and Buildings ­ A Handbook for Local Governments, UNEP Division of Technology, Industry and Economics (DTIE), Paris. World Bank, 2011, Guide to Climate Change Adaptation in Cities. The results of the literature review will feed into the drafting of Parts 2 (`Analysis of the main obstacles LRAs face when using climate finance instruments') and 3 (`Recommendations for further improving access to and use of climate finance instruments by EU regions and cities') of the draft final report. Task 3: Interviews (parts 2 and 3 of final report) The research team will carry out a maximum of 10 semi-structured interviews with relevant stakeholders. The main stakeholders' group will be associations representing national LRAs at the EU level. If possible, a national or EU financial institution will be included in the list of stakeholders to include the financial sector's point of view in the analysis. In the following, we present a preliminary list of stakeholders to interview: Covenant of Mayors; Energy Cities; Eurocities; ICLEI; The Council of European Municipalities and Regions (CEMR); Climate Alliance; Union of Baltic Cities; EIB or national investment bank. Based on Milieu's previous experience in stakeholders' consultations, we suggest sending to the stakeholders a letter of support from the Committee of the Regions when contacting them in order to increase the response rate. Examples of questions that will be asked during the interviews include: What climate finance options for LRAs are you familiar with? Which of these options do you think are most suitable for LRAs? Why? What is the experience of your organisation or within your member organisations with any specific climate finance options that have been 61 used? What do you think are the main obstacles to access the following types of climate finance for LRAs? EU funding (e.g. ESIF) Blending facilities National public funding National private financing (e.g. loans from commercial banks) How do you think that these obstacles can be overcome? The main challenge that we envisage in performing Task 3 is the short time frame to contact the relevant stakeholders and carry out interviews. To face this challenge, the research team will start contacting the stakeholders as soon as the methodology note is finalised with the Committee of the Regions. The information collected through interviews will provide the basis for analysing the obstacles faced by LRAs in accessing climate finance, as well as formulating recommendations for further improvement. The recommendations will be structured by groups of actors: LRAs, policy-makers at EU and national level, and private and public finance institutions. The main output of Task 3 will therefore be drafting Parts 2 and 3 of the draft final report. Task 4: Preparation of the final report Parts 1, 2 and 3 of the draft final report will be put together to prepare the draft final report due 24 July 2017. The draft final report will have the structure outlined in the Request for Services and will be revised based on comments and feedback by the Committee of the Regions to prepare the final report. Table 8 Outline of the final report Description Section Notes Summary [1 Summarises the objectives of the The summary will serve as an page] study, its research questions, its introduction to the report and will structure, and the content of Parts 1 synthesise the main findings to 3. Part 1 [ca. 8 pages] Summary of the existing climate Part 1 will contain primarily the finance instruments that are findings of the desk research (Task 1). available to EU regions and cities. Any relevant findings from tasks 2 and 3 will also be included. Analysis of the main obstacles Part 2 will contain the findings of the LRAs face when using climate literature review (Task 2) and the finance instruments. interviews (Task 3). Recommendations for further Part 3 will contain the findings of the Part 2 [ca. 6 pages] Part 3 62 Section [ca. 6 pages] Description Notes improving access to and use of literature review (Task 2) and the climate finance instruments by EU interviews (Task 3). regions and cities. Methodological note; References The final methodology note, list of and other information sources; list sources consulted during the desk of stakeholders consulted, if any. research and literature review, list of stakeholders interviewed, interview questionnaire or any other relevant input will be added as Annexes to the report. Annex(es) 63 EN ISBN 978-92-895-0940-4 doi:10.2863/329600 QG-01-17-925-EN-N Created in 1994 following the signing of the Maastricht Treaty, the European Committee of the Regions is the EU's assembly of 350 regional and local representatives from all 28 Member States, representing over 507 million Europeans. Rue Belliard/Belliardstraat 101 | 1040 Bruxelles/Brussel | BELGIQUE/BELGIË | Tel. +32 22822211 www.cor.europa.eu | @EU_CoR | /european.committee.of.the.regions /european-committee-of-the-regions  (ATTENTION: OPTION mpared Urban project loan151 Mitigation Caisse des Dépôts Public Loans Sustainable transport and renewable energy Urban development loan152 Mitigation Caisse des Dépôts Public Loans Sustainable transport and renewable energy Heating Fund153 Investment Fund for Green Mitigation French Environment and Energy Management Agency (ADEME) EIB and local commercial banks155 Public Grants Renewable energy Mitigation Private Loans Renewable energy and energy efficiency 149 150 Caisse des Dépôts, Prêt Croissance Verte à taux zero, viewed 30 June 2017, https://www.prets.caissedesdepots.fr/IMG/pdf/fiche_pcv0.pdf Caisse des Dépôts, Prêt Croissance Verte, viewed 30 June 2017, https://www.prets.caissedesdepots.fr/pcv-offre-sur-mesure.html 151 Caisse des Dépôts, Prêt Projet Urbain, viewed 30 June 2017, https://www.prets.caissedesdepots.fr/ppu.html 152 Caisse des Dépôts, Prêt Renouvellement Urbain Aménagement, viewed 30 June 2017, https://www.prets.caissedesdepots.fr/pru-am.html 153 ADEME, Fonds chaleur 2017, viewed 30 June 2017, http://www.ademe.fr/sites/default/files/assets/documents/instruct_generales_fds_chal_2017_06-04-17.pdf 41 Financing options Economy Preveo154 Field Financing source Type Financing vehicle Sectors/areas Short description to market levels) for renewable energy, energy efficiency renovations and construction of low energy buildings. Picardie Pass Rénovation Supporting Funds for Local Investment 156 Mitigation The project benefits from ELENA Public Financial instruments and TA Energy efficiency Publicly-owned company in charge of delivering `zero upfront cost' retrofitting services to households All French cities can apply for energy transition and green growth projects (EUR 500 million allocated to this priority in 2016) The Ile-de-France region and the city of Paris have both issued green bonds, which could serve as example to other French LRAs. Green & Sustainability Bond are the municipal bonds issued by the Ilede-France region. The proceeds support sustainable development projects, including renewable energy, energy efficiency and sustainable transport. Climate adaptation measures can be Adaptation and mitigation National government Public Grants Sustainable energy and green growth Issuance of green bonds Adaptation and mitigation Financial market Private Bonds Renewable energy, energy efficiency, sustainable transport, adaptation measures in biodiversity, water and building renovation projects 155 154 Banque Populaire Val de France, Caisse d'Epargne, Crédit Agricole de la Touraine et du Poitou, Centre Ouest, Centre Loire et Val de France. Energy Cities, 2014, Financing schemes increasing energy efficiency and renewable energy use in public and private buildings, Comparative study for the INFINITE Solutions project. 156 Ministère de l'Aménagement du Territoire, de la Ruralité et des collectivités territoriales, Le fonds de soutien à l'investissement local, viewed 30 June 2017, https://www.territoires.gouv.fr/le-fonds-de-soutien-a-linvestissement-local-fsil/ 42 Financing options Field Financing source Type Financing vehicle Sectors/areas Short description imbedded in biodiversity, water and building renovation projects.157 Similarly, the city of Paris issued green bonds in 2015 to finance renewable energy, energy efficiency, low-carbon transport and climate adaptation (green surfaces and urban re-forestation).158 Medium or long-term financing (from 3 to 15 years) for projects that support GHG reduction. Available to companies and all non-for-profit organisations. Loan for low-carbon economy investments (e.g. production of renewable energy, circular economy etc.), starting from EUR 12,000 for a duration between 3 and 15 years. Only in the regions Nord-Pas de Calais and Picardie. PREVair159 Mitigation Crédit Coopératif Private (Commercial bank) Loans Reduction of GHG emissions Loan REV3160 Mitigation Crédit Coopératif and CCI Nord de France Private (Commercial bank) Loans Sustainable energy 157 Climate Bonds Initiative, 2014, viewed 3 July 2017, https://www.climatebonds.net/2014/05/%C3%AEle-de-france-issues-eur600m-830m-12yr-aa-green-muni-they-hadso-many-orders-one-hour 158 Climate Bonds Initiative, 2015, viewed 3 July 2017, https://www.climatebonds.net/2015/11/update-vive-paris-green-bond-mkt-builds-cop21-host-city-paris-issuinginaugural-green-bond159 Crédit Coopératif, viewed 3 July 2017, http://www.credit-cooperatif.coop/ 160 Crédit Coopératif, viewed 3 July 2017, http://www.credit-cooperatif.coop/ 43 Ireland Table 4 Overview of national public and private funding instruments for climate action in Ireland Financing options Field Financing source Type Financing vehicle Sectors/areas Short description In the 2014-2020 period two Regional OPs (Border, Midland and Western ROP and Southern and Eastern ROP) will implement the ESIF in Ireland and support the shift towards a low-carbon economy. Allocations to climate adaptation and risk prevention: EUR 1.3 billion from the EAFRD. Allocations to the low-carbon economy: EUR 175 million from the ERDF, EUR 404.4 million from the EAFRD and EUR 2.4 million from the EMFF.162 The Limerick and Clare Education and Training Board benefited from the EEEF TA for building upgrades and renewable energy installations for a total of EUR 336,000. The Roscommon County Council received EUR 184,000 for TA for a biomass district heating project.163 Through the Better Energy Communities initiative, the SEAI Regional programmes for the ESIF161 Adaptation and mitigation EU budget, national budget Public Grants and financial instruments Energy efficiency, renewable energy, sustainable transport, flood risk management, development of adaptation plans EEEF Mitigation EU budget and investment banks and private investors PPP Financial instruments and TA Energy efficiency and renewable energy Better Energy Communities164 161 162 Mitigation SEAI Public Grants Energy efficiency The two ROPs are available at: http://ec.europa.eu/regional_policy/ European Commission, 2017, ESIF Data, viewed 13 July 2017, https://cohesiondata.ec.europa.eu/themes 163 European Energy Efficiency Fund, viewed 13 July 2017, http://www.eeef.eu/technical-assistance.html 164 Sustainable Energy Authority of Ireland, Deep Retrofit Pilot Programme, viewed 5 July 2017, http://www.seai.ie/Grants/Better_Energy_Communities/ 44 Financing options Field Financing source Type Financing vehicle Sectors/areas Short description offers grant supports for community energy projects such as energy efficiency improvements in homes, community, private and public buildings. Although the end beneficiaries of the Deep Retrofit Pilot Programme will be households, the support is administered through community groups, local authorities and energy agencies. The offered services will aim for significant upgrades of buildings toward nearly zero energy requirements and integration of renewable energy solutions. Through the Electric Vehicle Grant Scheme, the SEAI offers grant support to private and public sector consumers for purchasing electric vehicles. The Fund can support various types of environmental projects including `partnership projects, that involve local authorities, to improve the quality of the environment for particular local communities'. Deep Retrofit Pilot Programme165 Mitigation SEAI Public Grants Energy efficiency and renewable energy Electric Vehicle Grant Scheme166 Mitigation SEAI Public Grants Sustainable transport Environmental Fund167 Adaptation and mitigation Revenues from the levies on plastic shopping bags and the landfill of waste Public No information Environment 165 166 Further details: http://www.seai.ie/Grants/Deep-Retrofit-Programme/ Further details: http://www.seai.ie/Grants/Electric_Vehicle_Grant_Scheme/ 167 Further details: http://www.dccae.gov.ie/en-ie/environment/topics/environmental-protection-and-awareness/environmental-fund/Pages/default.aspx 45 Lithuania Table 5 Overview of national public and private funding instruments for climate action in Lithuania Financing options Field Financing source Type Financing vehicle Sectors/areas Short description In addition to grants, Lithuania used financial instruments under the ESIF in the period 2007-2013 to establish the VIPA energy efficiency fund for residential buildings. During the current period (2014-2020), blending was used to support energy efficiency investments at national and local level (see below for more details about the Energy Efficiency Fund). Lithuania implements the ERDF, CF and ESF with the Lithuanian multifund Operational Programme. 2014-2020 ESIF allocations to climate adaptation and risk prevention: EUR 4.8 million from the ERDF, EUR 123.3 million from the CF and EUR 287.2 million from the EAFRD. 2014-2020 ESIF allocations to the low-carbon economy: EUR 608.5 million from the ERDF, EUR 455 million from the CF, EUR 176.1 million from the EAFRD and EUR 418.1 thousand from the EMFF.168 National Programmes of ESIF Adaptation and mitigation EU and national budgets Public and private Grants and financial instruments Energy efficiency, renewable energy, sustainable transport, flood risk management, development of adaptation plans 168 European Commission, 2017, ESIF Data, viewed 13 July 2017 at https://cohesiondata.ec.europa.eu/themes 46 Financing options Field Financing source Type Financing vehicle Sectors/areas Short description The ENEF was established by blending ESIF and private resources to finance energy efficiency projects. ENEF provides loans for energy efficiency investments in central government buildings and guarantees for modernization of cities' street lighting. Energy Efficiency Fund (ENEF)169 Mitigation Ministry of Finance, Ministry of Energy, Public Investment Development Agency Public and private (blending) Loans and guarantees Energy efficiency and public street lighting Climate Change Special Programme170 Adaptation and mitigation Assigned Amount Units and EU Emission Allowances; donations; penalties to operators. Public Grants Energy efficiency, renewable energy, environmentfriendly technologies, reforestation and afforestation, education programmes on climate change, and climate change management. A special programme to finance climate change mitigation and adaptation measures in Lithuania was launched in 2009. Programme for Environment and Climate Cooperation171 Adaptation and mitigation Nordic Council of Ministers and the Barents Hot Spots Facility Public Grants Climate projects in general Programme for Environment and Climate Co-operation between Nordic and North-West Russian non-commercial partners. It provides grant financing for cooperation projects that contribute to improvements of the environment and climate in North-West Russia. 169 170 VIPA (Public Investment Development Agency), Municipality grants, viewed 3 July 2017, http://vipa.lt/page/enefen Ministry of Environment of the Republic of Lithuania, Climate Change Special Programme: overview, viewed 3 July 2017, http://www.am.lt/VI/en/VI/index.php#a/538 171 Nordic Environment Finance Corporation (NEFCO), Programme for Environment and Climate Co-operation, viewed 3 July 2017, https://www.nefco.org/work-us/ourservices/grants/programme-environment-and-climate-co-operation 47 Financing options Field Financing source Type Financing vehicle Sectors/areas Short description Loans on market terms for energy efficiency, renewable energy district heating and pollution abatement. The maximum amount is EUR 5 million. Projects must be economically viable and have a positive environmental impact. Available also to Estonia, Latvia and Poland. NEFCO's Investment Fund172 Mitigation Nordic Environment Finance Corporation (NEFCO) Private Loans and equity Energy efficiency, renewable energy district heating and pollution abatement Municipality Grants173 Adaptation and mitigations National funding (managed by VIPA174) Public Grants Sustainable energy and transport, flood prevention, water measures and other adaptation projects eligible under ESIF National government grants available to municipalities to cofinance ESIF projects. 172 173 Nordic Environment Finance Corporation (NEFCO), Investment Fund, viewed 3 July 2017, https://www.nefco.org/work-us/our-services/loans-and-equity/investment-fund VIPA (Public Investment Development Agency), Municipality grants, viewed 3 July 2017, http://vipa.lt/page/municipality_grants 174 VIPA is the Lithuanian Public Investment Development Agency. 48 Annex 3: List of references African Development Bank, Asian Development Bank, European Bank for Reconstruction and Development, European Investment Bank, Inter-American Development Bank Group and World Bank Group, 2015 Joint Report on Multilateral Development Banks' Climate Finance, August 2016, viewed 31 July 2017, http://www.eib.org/attachments/documents/joint_mdb_report_on_climate_finance_2015.pdf Climate Alliance, 2015, EIB consultation on financing climate action, 16 March 2015, viewed 21 July 2017, http://www.eib.org/attachments/consultations/eib_climate_action_comments_cli matealliance_20150817_en.pdf Climate Alliance, 2016, Accounting rules creating barriers for mobilising energy efficiency investments, 21 June 2016, viewed 10 July 2017, http://www.climatealliance.org/fileadmin/Inhalte/7_Downloads/ClimateAlliance WrittenEvidence-1.pdf Climate Alliance, Eurocities, Energy Cities, RES Coop, Énergies POSIT'IF, 2017, Joint statement on local energy efficiency financing, viewed 10 July 2017, http://www.climatealliance.org/newsroom/news/news-detail/networks-releasejoint-statement-on-energy-efficiency-financing.html Climate Bonds Initiative, 2015, Bonds and Climate Change: the state of the market in 2015, viewed 5 July 2017, https://www.climatebonds.net/files/files/CBIHSBC%20report%207July%20JG01.pdf. Climate Bonds Initiative, 2017, Green Bonds Highlights 2016, viewed 5 July 2017, https://www.climatebonds.net/files/files/2016%20GB%20Market%20Roundup. pdf. Cochu, A. et al., 2016, Study on the potential of green bond finance for resource-efficient investments, November 2016, viewed 5 July 2017, http://ec.europa.eu/environment/enveco/pdf/potential-green-bond.pdf Committee of the Regions, 2015, Contribution of the Committee of the Regions to the stakeholder consultation of the European Investment Bank on the Bank's approach to supporting climate action, viewed 21 July 2017, http://www.eib.org/attachments/consultations/eib_climate_action_comments_co r_20150817_en.pdf 49 Committee of the Regions, 2016, Results of the CoR online consultation on obstacles to investments at local and regional level, September 2016. Covenant of Mayors for Climate & Energy, 2016, Quick reference guide on financing opportunities for local climate and energy actions (2014-2020). Covenant of Mayors, 2016, Sustainable energy investment in European local authorities, Report based on a survey by the Covenant of Mayors Office, May 2016. COWI, 2016, Mainstreaming of climate action into ESI Funds ­ Final report, European Commission DG Climate Action. De Boer, F., 2015, White Paper: Barriers to Private Sector Investments into Urban Climate Mitigation Projects, CDP with support from Low Carbon City Lab. Deng-Beck, C. and Price, L. 2016, Gap Analysis Report: Closing the gap between finance and urban climate action, viewed 10 July 2017, http://elib.iclei.org/wp-content/uploads/2016/03/Gap-analysis-report_final_20160307final.pdf E3G, 2014, Cities and resilience to climate change ­ Workshop summary, viewed 10 July 2017, https://www.e3g.org/docs/E3G_Workshop011014_Writeup.pdf. E3G, 2016, Stakeholders' letter on `Reviewing accounting rules and/or debt treatment for energy efficiency investments will help close the energy efficiency financing gap in Europe', viewed 14 July 2017, https://www.e3g.org/docs/Stakeholders_Letter__Accounting_rules_Energy_efficiency.pdf. Ecofys and DIW Econ, 2016, How can EU climate financing be improved to achieve the 2030 climate and energy targets?, Discussion paper, 09 May 2016. EIB, 2015, EIB Climate Action Public Consultation, Issue Matrix, viewed 21 July 2017, http://www.eib.org/attachments/consultations/eib_car_final_issues_matrix_20150922_en.pdf Energy Cities, 2014, Financing schemes increasing energy efficiency and renewable energy use in public and private buildings, Comparative study for the INFINITE Solutions project. Energy Cities, 2015, Unlocking investment in cities: ELENA-EIB technical assistance facility ­ Project review in five European local authorities, viewed 12 50 July 2017, http://www.energy-cities.eu/IMG/pdf/reviewelenaeib_projects_june2015.pdf Energy Efficiency Financial Institutions Group, 2015, Energy Efficiency ­ the first fuel for the EU Economy: How to drive new finance for energy efficiency investments, Final report. EU High Level Expert Group on Sustainable Finance, 2017, Financing a Sustainable European Economy, Interim Report, July 2017, viewed 21 July 2017, https://ec.europa.eu/info/sites/info/files/170713-sustainable-financereport_en.pdf EU Sustainable Energy Week, Conference `Accelerating the clean energy transition ­ financing energy efficiency at the local level', Brussels, 21 June 2017. European Commission, 2016, Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee, the Committee of the Regions and the European Investment Bank, Clean Energy for all Europeans, Brussels, 30.11.2016, COM(2016) 860 final. European Commission, Horizon 2020 Work Programme 2014-15, '19. General Annexes Revised', Commission Decision C (2014)4994 of 22 July 2014, part 18 European Environment Agency, 2017, Financing urban adaptation to climate change, EEA Report No 2/2017. Green Bonds for Cities project, Factsheet, viewed 5 July 2017, http://local.climate-kic.org/wp-content/uploads/2016/09/160825_Flyer_GreenBonds-for-Cities_LR.pdf Hancock, C., 2017, `Hayes says Ireland should issue green bonds', The Irish Times, 26 January 2017, viewed 5 July 2017, https://www.irishtimes.com/business/economy/hayes-says-ireland-should-issuegreen-bonds-1.2951120. Kommuninvest, 2017, PRESS RELEASE: Kommuninvest now behind the three largest green bonds ever issued out of Sweden, 17 May 2017, viewed 20 July 2017, http://kommuninvest.se/2017/05/press-release-kommuninvest-nowbehind-the-three-largest-green-bonds-ever-issued-out-of-sweden/ Lorenz, S. et al. 2016, `Use of Climate Projections in Adaptation Planning: Lessons from England & Germany', SRI Briefing Note 9, University of Leeds, viewed 12 July 2017, http://www.see.leeds.ac.uk/fileadmin/Documents/research/sri/briefingnotes/SRI BNs-9.pdf.pdf 51 Mabey, N. et al., 2014, Underfunded, underprepared, underwater? Cities at risk, E3G. OECD, 2010, Cities and Climate Change, OECD Publishing. http://dx.doi.org/10.1787/9789264091375-en. Regulation (EU) 2015/1017 on the European Fund for Strategic Investments, the European Investment Advisory Hub and the European Investment Project Portal. Sullivan, R., A. Gouldson, and P. Webber, 2012, `Funding low carbon cities: local perspectives on opportunities and risks', Climate Policy, 13 (4), pp. 514529. URBACT, 2016, The URBACT III Programme ­ Programme Manual 6th Version, October 2016, viewed 17 July 2017, http://urbact.eu/sites/default/files/programme_manual_v6_oct_2016_1.pdf. Websites consulted ADEME, Fonds chaleur 2017, viewed 30 June 2017, http://www.ademe.fr/sites/default/files/assets/documents/instruct_generales_fds _chal_2017_06-04-17.pdf Belfius, Smart Cities, Climate Action & Circular Economy, viewed 1 August 2017, https://www.belfius.be/publicsocial/FR/Themes/Smart-Cities/index.aspx Build Up, 2016, De-risking Energy Efficiency Platform, viewed 18 July 2017 at http://www.buildup.eu/en/explore/links/de-risking-energy-efficiency-platformdeep-0 Bulgarian-Swiss Cooperation Programme, viewed 4 July 2017, http://swisscontribution.bg/en Caisse des Dépôts, Prêt Croissance Verte à taux zéro, viewed 30 June 2017, https://www.prets.caissedesdepots.fr/IMG/pdf/fiche_pcv0.pdf Caisse des Dépôts, Prêt Croissance Verte, viewed 30 June 2017, https://www.prets.caissedesdepots.fr/pcv-offre-sur-mesure.html Caisse des Dépôts, Prêt Projet Urbain, viewed 30 June 2017, https://www.prets.caissedesdepots.fr/ppu.html Caisse des Dépôts, Prêt Renouvellement Urbain Aménagement, 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http://www.covenantofmayors.eu/about/signatories_en.html?city_id=6892&seap Crédit Coopératif, viewed 3 July 2017, http://www.credit-cooperatif.coop/offrepersonnes-morales/credits-dinvestissement/prevair-pour-personnes-morales/ Crédit Coopératif, viewed 3 July 2017, http://www.credit-cooperatif.coop/offrepersonnes-morales/credits-dinvestissement/pret-rev3-pour-la-troisiemerevolution-industrielle/ Department of Communications, Climate Action & Environment, Irish government, Environmental Fund, viewed 5 July 2017, http://www.dccae.gov.ie/en-ie/environment/topics/environmental-protectionand-awareness/environmental-fund/Pages/default.aspx EBRD, Sustainable Energy Initiative, viewed 1 August 2017, http://www.ebrd.com/what-we-do/sectors-and-topics/sustainable-energyinitiative.html EEA Grants, viewed 4 July 2017, http://eeagrants.org/What-we-do/EEA-andNorway-Grants-2014-2021 EIB, 2016, Urban Agenda: Smart Cities make a beautiful world, viewed 1 August 2017, http://www.eib.org/infocentre/blog/all/urban-agenda-smart-cities 53 EIB, 2017, Blending: Natural Capital Financing Facility - Boosting investment for biodiversity and nature-based adaptation to climate, viewed 28 June 2017, http://www.eib.org/products/blending/ncff/index.htm EIB, 2017, Blending: Private Finance for Energy Efficiency (PF4EE), viewed 28 June 2017, http://www.eib.org/products/blending/pf4ee/index.htm EIB, 2017, Climate and environment, viewed 21 July 2017: http://www.eib.org/projects/priorities/climate-and-environment/index.htm EIB, 2017, ELENA ­ Supporting investment in energy efficiency and sustainable transport, viewed 1 August 2017, http://www.eib.org/products/advising/elena/index.htm EIB, 2017, European Fund for Strategic Investments, viewed 1 August 2017, http://www.eib.org/efsi/index.htm EIB, 2017, European Investment Advisory Hub, viewed 28 June 2017, http://www.eib.org/eiah/about/index.htm EIB, 2017, Projects: Ambiente Urbano Bologna V, viewed 1 August 2017, http://www.eib.org/projects/pipelines/pipeline/20160008 EIB, 2017, Supporting urban development (JESSICA), viewed 4 July 2017, http://www.eib.org/products/blending/jessica/index.htm Energy Efficiency and Renewable Sources Fund ­ Bulgaria, viewed 4 July 2017, http://www.bgeef.com/display.aspx EU Structural Funds, Bulgaria, viewed 4 July 2017, https://www.eufunds.bg/programen-period-2014-2020/operativni-programi2014-2020 European Commission, 2014, Regional Policy, Community-led Local Development, viewed 1 August 2017, http://ec.europa.eu/regional_policy/en/information/publications/brochures/2014/ community-led-local-development European Commission, 2014, Regional Policy, Guidance Fiche: Integrated Territorial Investment, http://ec.europa.eu/regional_policy/en/information/publications/guidelines/2014/ guidance-fiche-integrated-territorial-investment-iti European Commission, 2015, Regional Policy, European Territorial Cooperation, viewed 1 August 2017, http://ec.europa.eu/regional_policy/en/policy/cooperation/european-territorial/ 54 European Commission, 2017, Environment, LIFE Programme, viewed 1 August 2017, http://ec.europa.eu/environment/life/ European Commission, 2017, ESIF Data, viewed 13 July 2017, https://cohesiondata.ec.europa.eu/themes European Commission, 2017, ESIF, viewed 4July2017, https://ec.europa.eu/info/funding-tenders/european-structural-and-investmentfunds_en European Commission, European Structural and Investment Funds, viewed 1 August 2017, https://ec.europa.eu/info/funding-tenders/european-structural-andinvestment-funds_en European Commission, Horizon 2020 ­ Programme sections, viewed 28 June 2017, https://ec.europa.eu/programmes/horizon2020/en/h2020-sections European Commission, Horizon 2020, viewed 1 August 2017, https://ec.europa.eu/programmes/horizon2020/ European Energy Efficiency Fund, Technical Assistance, viewed on 13 July 2017 at http://www.eeef.eu/technical-assistance.html European Energy Efficiency Fund, viewed 28 June 2017, http://www.eeef.eu/objective-of-the-fund.html European Environment Agency, 2016, Climate-ADAPT, Case study on Climate bond financing adaptation actions in Paris (2016), viewed 14 July 2017, http://climate-adapt.eea.europa.eu/metadata/case-studies/climate-bondfinancing-adaptation-actions-in-paris FI Compass, Financial instruments for energy efficiency in the programming period 2014-2020, viewed 17 July 2017, https://www.ficompass.eu/sites/default/files/publications/presentation_20161020_vienne_agne _kazlauskaite_1.pdf Fund for local authorities and governments ­ Bulgaria, viewed 4 July 2017, http://www.flag-bg.com/?l=2 Future for Rural Energy in Europe, Funding, viewed 28 June 2017, http://www.rural-energy.eu/funding/7/367/COUNCIL-OF-EUROPEDEVELOPMENT-BANK/#.WVOcnZKGOUn Gaelectric, 2016, Ireland targets emerging environmental finance market, viewed 5 July 2017, http://www.gaelectric.ie/ireland-targets-emergingenvironmental-finance-market/ 55 Global Environment Facility, viewed 28 June 2017, https://www.thegef.org/about/funding Global Environment Facility, viewed 9 August 2017, https://www.thegef.org/ ICLEI, Finance, viewed 14 July 2017, http://www.iclei.org/activities/finance.html INTERACT, 2017, viewed 04 July 2017, http://www.interact-eu.net/ JASPERS, 2017, viewed 04 July 2017, http://jaspers.eib.org/ Low Carbon City Lab, Climate-KIC, viewed 14 July 2017, http://local.climatekic.org/projects/climate-finance-for-territories/ Ministère de l'Aménagement du Territoire, de la Ruralité et des collectivités territoriales, Le fonds de soutien à l'investissement local, viewed 30 June 2017, https://www.territoires.gouv.fr/le-fonds-de-soutien-a-linvestissement-local-fsil/ Ministry of Environment of the Republic of Lithuania, Climate Change Special Programme: overview, viewed 3 July 2017, http://www.am.lt/VI/en/VI/index.php#a/538 National Trust Eco-fund ­ Bulgaria, viewed 4 July 2017, http://ecofundbg.org/en/home/ Nordic Environment Finance Corporation (NEFCO), Investment Fund, viewed 3 July 2017, https://www.nefco.org/work-us/our-services/loans-andequity/investment-fund Nordic Environment Finance Corporation (NEFCO), Programme for Environment and Climate Co-operation, viewed 3 July 2017, https://www.nefco.org/work-us/our-services/grants/programme-environmentand-climate-co-operation Sustainable Energy Authority of Ireland, Better Energy Communities, Deep Retrofit Pilot Programme, viewed 5 July 2017, http://www.seai.ie/Grants/Better_Energy_Communities/ Sustainable Energy Authority of Ireland, Deep Retrofit Pilot Programme, viewed 5 July 2017, http://www.seai.ie/Grants/Deep-Retrofit-Programme/ Sustainable Energy Authority of Ireland, Electric Vehicle Grant Scheme, viewed 5 July 2017, http://www.seai.ie/Grants/Electric_Vehicle_Grant_Scheme/ URBACT, 2017, viewed 04 July 2017, http://urbact.eu/ 56 VIPA (Lithuanian Public Investment Development Agency), Municipality grants, viewed 3 July 2017, http://vipa.lt/page/enefen 57 Annex 4: List of stakeholders interviewed Type of stakeholder City network City network Local and regional authorities network Network of organisations Think tank Think tank Financial institution International organisation Consultancy Name Climate Alliance Eurocities POLIS Climate-KIC, Low Carbon City Lab programme Institute for Climate Economics (I4CE) 2 Degrees Investing European Investment Bank Climate Bonds Initiative Ecofys (lead organisation responsible for delivering the Mayors-ADAPT project) 58 Annex 5: Methodological note Task 1: Desk research (part 1 of final report) Existing climate funding opportunities for Local and Regional Authorities (hereinafter LRAs) will be identified based on desk research in the following areas: EU and international funding (e.g. ESIF, LIFE, EIB, EBRD, Green Climate Fund); National public funding (e.g. development and investment banks); National private financing instruments (e.g. commercial banks, green bonds). Table 6 presents a preliminary non-exhaustive list of sources that provide information on the existing climate financing resources for LRAs. Table 6 Preliminary list of sources for the summary of existing climate finance instruments Public/ private EU/ national/ local Author/ organisation financing financing Covenant of Mayors (Overview of existing Public and private EU funding sources and cities' action plans) (incl. blending) Institute for Climate Economics (I4CE) Public and private (FR) EIB National Public and private EU (incl. blending) Other EU and national EU and national EU and national EU and national EU and national National National Cities Climate Finance Leadership Alliance Public and private (CCFLA) UNFCCC (national reports) National RE action plans to the EC National EE action plans to the EC Climate Bonds Initiative (CBI) Energies POSIT'IF (FR) Caisse des Dépôts (FR) KfW (DE) Public Public Public Private Public and private Private Private The research team will use the template illustrated in Table 7 to gather relevant information on the existing climate funding opportunities for LRAs. The template will allow an effective collection of information to cover different types of funding, as well as different Member States. 59 Table 7 Template for collecting information and examples of the existing climate funding opportunities for LRAs EU/ Funding Funding Climate mitigation Public/ private/ national instrument source and/or adaptation blending EU EU [...] ERDF ESIF Compass FI EU budget Climate mitigation Public and adaptation EU budget and Climate mitigation private Blending and adaptation resources The desk research on national public and private funding opportunities will be carried out for a selection of three or four EU Member States. The selection will be mainly based on the existence of national climate finance in the country and availability of information. To the extent possible, geographic representation of the selected countries will be sought. Possible countries to include are: Bulgaria, France, Germany, Netherlands, Italy, one Baltic State (e.g. Lithuania), Ireland. The research team will discuss the selection with the Committee of the Regions before finalisation. The main output of Task 1 will be Part 1 of the draft final report `Summary of the existing climate finance instruments that are available to EU regions and cities'. Task 2: Literature review (parts 2 and 3 of final report) The literature review on climate financing for LRAs will focus on the following research topics, as specified by the Committee of the Regions: The obstacles faced by LRAs in accessing the climate tools identified in Task 1; Recommendations to improve climate finance for LRAs. A preliminary non-exhaustive list of literature sources is presented below: Cities Climate Finance Leadership Alliance, 2015, The state of city climate finance 2015. Energy Efficiency Financial Institutions Group, 2015, Energy Efficiency ­ the first fuel for the EU Economy: How to drive new finance for energy efficiency investments. Germanwatch, 2015, Finding the Finance, Financing Climate Compatible Development in Cities. I4CE, 2016, Landscape of climate finance in France. Norden, 2015, Public-Private Partnerships for Climate Finance. ODI, 2015, Climate finance for cities How can international climate funds 60 best support low-carbon and climate resilient urban development?, Working paper 419. Sullivan R., A. Gouldson & P. Webber, 2013, `Funding low carbon cities: local perspectives on opportunities and risks', Climate Policy, 13:4, pp. 514-529. UNEP, 2014, Climate Finance for Cities and Buildings ­ A Handbook for Local Governments, UNEP Division of Technology, Industry and Economics (DTIE), Paris. World Bank, 2011, Guide to Climate Change Adaptation in Cities. The results of the literature review will feed into the drafting of Parts 2 (`Analysis of the main obstacles LRAs face when using climate finance instruments') and 3 (`Recommendations for further improving access to and use of climate finance instruments by EU regions and cities') of the draft final report. Task 3: Interviews (parts 2 and 3 of final report) The research team will carry out a maximum of 10 semi-structured interviews with relevant stakeholders. The main stakeholders' group will be associations representing national LRAs at the EU level. If possible, a national or EU financial institution will be included in the list of stakeholders to include the financial sector's point of view in the analysis. In the following, we present a preliminary list of stakeholders to interview: Covenant of Mayors; Energy Cities; Eurocities; ICLEI; The Council of European Municipalities and Regions (CEMR); Climate Alliance; Union of Baltic Cities; EIB or national investment bank. Based on Milieu's previous experience in stakeholders' consultations, we suggest sending to the stakeholders a letter of support from the Committee of the Regions when contacting them in order to increase the response rate. Examples of questions that will be asked during the interviews include: What climate finance options for LRAs are you familiar with? Which of these options do you think are most suitable for LRAs? Why? What is the experience of your organisation or within your member organisations with any specific climate finance options that have been 61 used? What do you think are the main obstacles to access the following types of climate finance for LRAs? EU funding (e.g. ESIF) Blending facilities National public funding National private financing (e.g. loans from commercial banks) How do you think that these obstacles can be overcome? The main challenge that we envisage in performing Task 3 is the short time frame to contact the relevant stakeholders and carry out interviews. To face this challenge, the research team will start contacting the stakeholders as soon as the methodology note is finalised with the Committee of the Regions. The information collected through interviews will provide the basis for analysing the obstacles faced by LRAs in accessing climate finance, as well as formulating recommendations for further improvement. The recommendations will be structured by groups of actors: LRAs, policy-makers at EU and national level, and private and public finance institutions. The main output of Task 3 will therefore be drafting Parts 2 and 3 of the draft final report. Task 4: Preparation of the final report Parts 1, 2 and 3 of the draft final report will be put together to prepare the draft final report due 24 July 2017. The draft final report will have the structure outlined in the Request for Services and will be revised based on comments and feedback by the Committee of the Regions to prepare the final report. Table 8 Outline of the final report Description Section Notes Summary [1 Summarises the objectives of the The summary will serve as an page] study, its research questions, its introduction to the report and will structure, and the content of Parts 1 synthesise the main findings to 3. Part 1 [ca. 8 pages] Summary of the existing climate Part 1 will contain primarily the finance instruments that are findings of the desk research (Task 1). available to EU regions and cities. Any relevant findings from tasks 2 and 3 will also be included. Analysis of the main obstacles Part 2 will contain the findings of the LRAs face when using climate literature review (Task 2) and the finance instruments. interviews (Task 3). Recommendations for further Part 3 will contain the findings of the Part 2 [ca. 6 pages] Part 3 62 Section [ca. 6 pages] Description Notes improving access to and use of literature review (Task 2) and the climate finance instruments by EU interviews (Task 3). regions and cities. Methodological note; References The final methodology note, list of and other information sources; list sources consulted during the desk of stakeholders consulted, if any. research and literature review, list of stakeholders interviewed, interview questionnaire or any other relevant input will be added as Annexes to the report. Annex(es) 63 EN ISBN 978-92-895-0940-4 doi:10.2863/329600 QG-01-17-925-EN-N Created in 1994 following the signing of the Maastricht Treaty, the European Committee of the Regions is the EU's assembly of 350 regional and local representatives from all 28 Member States, representing over 507 million Europeans. Rue Belliard/Belliardstraat 101 | 1040 Bruxelles/Brussel | BELGIQUE/BELGIË | Tel. +32 22822211 www.cor.europa.eu | @EU_CoR | /european.committee.of.the.regions /european-committee-of-the-regions  INVALIDE) (ATTENTION: OPTION stainable transport and renewable energy Heating Fund153 Investment Fund for Green Mitigation French Environment and Energy Management Agency (ADEME) EIB and local commercial banks155 Public Grants Renewable energy Mitigation Private Loans Renewable energy and energy efficiency 149 150 Caisse des Dépôts, Prêt Croissance Verte à taux zero, viewed 30 June 2017, https://www.prets.caissedesdepots.fr/IMG/pdf/fiche_pcv0.pdf Caisse des Dépôts, Prêt Croissance Verte, viewed 30 June 2017, https://www.prets.caissedesdepots.fr/pcv-offre-sur-mesure.html 151 Caisse des Dépôts, Prêt Projet Urbain, viewed 30 June 2017, https://www.prets.caissedesdepots.fr/ppu.html 152 Caisse des Dépôts, Prêt Renouvellement Urbain Aménagement, viewed 30 June 2017, https://www.prets.caissedesdepots.fr/pru-am.html 153 ADEME, Fonds chaleur 2017, viewed 30 June 2017, http://www.ademe.fr/sites/default/files/assets/documents/instruct_generales_fds_chal_2017_06-04-17.pdf 41 Financing options Economy Preveo154 Field Financing source Type Financing vehicle Sectors/areas Short description to market levels) for renewable energy, energy efficiency renovations and construction of low energy buildings. Picardie Pass Rénovation Supporting Funds for Local Investment 156 Mitigation The project benefits from ELENA Public Financial instruments and TA Energy efficiency Publicly-owned company in charge of delivering `zero upfront cost' retrofitting services to households All French cities can apply for energy transition and green growth projects (EUR 500 million allocated to this priority in 2016) The Ile-de-France region and the city of Paris have both issued green bonds, which could serve as example to other French LRAs. Green & Sustainability Bond are the municipal bonds issued by the Ilede-France region. The proceeds support sustainable development projects, including renewable energy, energy efficiency and sustainable transport. Climate adaptation measures can be Adaptation and mitigation National government Public Grants Sustainable energy and green growth Issuance of green bonds Adaptation and mitigation Financial market Private Bonds Renewable energy, energy efficiency, sustainable transport, adaptation measures in biodiversity, water and building renovation projects 155 154 Banque Populaire Val de France, Caisse d'Epargne, Crédit Agricole de la Touraine et du Poitou, Centre Ouest, Centre Loire et Val de France. Energy Cities, 2014, Financing schemes increasing energy efficiency and renewable energy use in public and private buildings, Comparative study for the INFINITE Solutions project. 156 Ministère de l'Aménagement du Territoire, de la Ruralité et des collectivités territoriales, Le fonds de soutien à l'investissement local, viewed 30 June 2017, https://www.territoires.gouv.fr/le-fonds-de-soutien-a-linvestissement-local-fsil/ 42 Financing options Field Financing source Type Financing vehicle Sectors/areas Short description imbedded in biodiversity, water and building renovation projects.157 Similarly, the city of Paris issued green bonds in 2015 to finance renewable energy, energy efficiency, low-carbon transport and climate adaptation (green surfaces and urban re-forestation).158 Medium or long-term financing (from 3 to 15 years) for projects that support GHG reduction. Available to companies and all non-for-profit organisations. Loan for low-carbon economy investments (e.g. production of renewable energy, circular economy etc.), starting from EUR 12,000 for a duration between 3 and 15 years. Only in the regions Nord-Pas de Calais and Picardie. PREVair159 Mitigation Crédit Coopératif Private (Commercial bank) Loans Reduction of GHG emissions Loan REV3160 Mitigation Crédit Coopératif and CCI Nord de France Private (Commercial bank) Loans Sustainable energy 157 Climate Bonds Initiative, 2014, viewed 3 July 2017, https://www.climatebonds.net/2014/05/%C3%AEle-de-france-issues-eur600m-830m-12yr-aa-green-muni-they-hadso-many-orders-one-hour 158 Climate Bonds Initiative, 2015, viewed 3 July 2017, https://www.climatebonds.net/2015/11/update-vive-paris-green-bond-mkt-builds-cop21-host-city-paris-issuinginaugural-green-bond159 Crédit Coopératif, viewed 3 July 2017, http://www.credit-cooperatif.coop/ 160 Crédit Coopératif, viewed 3 July 2017, http://www.credit-cooperatif.coop/ 43 Ireland Table 4 Overview of national public and private funding instruments for climate action in Ireland Financing options Field Financing source Type Financing vehicle Sectors/areas Short description In the 2014-2020 period two Regional OPs (Border, Midland and Western ROP and Southern and Eastern ROP) will implement the ESIF in Ireland and support the shift towards a low-carbon economy. Allocations to climate adaptation and risk prevention: EUR 1.3 billion from the EAFRD. Allocations to the low-carbon economy: EUR 175 million from the ERDF, EUR 404.4 million from the EAFRD and EUR 2.4 million from the EMFF.162 The Limerick and Clare Education and Training Board benefited from the EEEF TA for building upgrades and renewable energy installations for a total of EUR 336,000. The Roscommon County Council received EUR 184,000 for TA for a biomass district heating project.163 Through the Better Energy Communities initiative, the SEAI Regional programmes for the ESIF161 Adaptation and mitigation EU budget, national budget Public Grants and financial instruments Energy efficiency, renewable energy, sustainable transport, flood risk management, development of adaptation plans EEEF Mitigation EU budget and investment banks and private investors PPP Financial instruments and TA Energy efficiency and renewable energy Better Energy Communities164 161 162 Mitigation SEAI Public Grants Energy efficiency The two ROPs are available at: http://ec.europa.eu/regional_policy/ European Commission, 2017, ESIF Data, viewed 13 July 2017, https://cohesiondata.ec.europa.eu/themes 163 European Energy Efficiency Fund, viewed 13 July 2017, http://www.eeef.eu/technical-assistance.html 164 Sustainable Energy Authority of Ireland, Deep Retrofit Pilot Programme, viewed 5 July 2017, http://www.seai.ie/Grants/Better_Energy_Communities/ 44 Financing options Field Financing source Type Financing vehicle Sectors/areas Short description offers grant supports for community energy projects such as energy efficiency improvements in homes, community, private and public buildings. Although the end beneficiaries of the Deep Retrofit Pilot Programme will be households, the support is administered through community groups, local authorities and energy agencies. The offered services will aim for significant upgrades of buildings toward nearly zero energy requirements and integration of renewable energy solutions. Through the Electric Vehicle Grant Scheme, the SEAI offers grant support to private and public sector consumers for purchasing electric vehicles. The Fund can support various types of environmental projects including `partnership projects, that involve local authorities, to improve the quality of the environment for particular local communities'. Deep Retrofit Pilot Programme165 Mitigation SEAI Public Grants Energy efficiency and renewable energy Electric Vehicle Grant Scheme166 Mitigation SEAI Public Grants Sustainable transport Environmental Fund167 Adaptation and mitigation Revenues from the levies on plastic shopping bags and the landfill of waste Public No information Environment 165 166 Further details: http://www.seai.ie/Grants/Deep-Retrofit-Programme/ Further details: http://www.seai.ie/Grants/Electric_Vehicle_Grant_Scheme/ 167 Further details: http://www.dccae.gov.ie/en-ie/environment/topics/environmental-protection-and-awareness/environmental-fund/Pages/default.aspx 45 Lithuania Table 5 Overview of national public and private funding instruments for climate action in Lithuania Financing options Field Financing source Type Financing vehicle Sectors/areas Short description In addition to grants, Lithuania used financial instruments under the ESIF in the period 2007-2013 to establish the VIPA energy efficiency fund for residential buildings. During the current period (2014-2020), blending was used to support energy efficiency investments at national and local level (see below for more details about the Energy Efficiency Fund). Lithuania implements the ERDF, CF and ESF with the Lithuanian multifund Operational Programme. 2014-2020 ESIF allocations to climate adaptation and risk prevention: EUR 4.8 million from the ERDF, EUR 123.3 million from the CF and EUR 287.2 million from the EAFRD. 2014-2020 ESIF allocations to the low-carbon economy: EUR 608.5 million from the ERDF, EUR 455 million from the CF, EUR 176.1 million from the EAFRD and EUR 418.1 thousand from the EMFF.168 National Programmes of ESIF Adaptation and mitigation EU and national budgets Public and private Grants and financial instruments Energy efficiency, renewable energy, sustainable transport, flood risk management, development of adaptation plans 168 European Commission, 2017, ESIF Data, viewed 13 July 2017 at https://cohesiondata.ec.europa.eu/themes 46 Financing options Field Financing source Type Financing vehicle Sectors/areas Short description The ENEF was established by blending ESIF and private resources to finance energy efficiency projects. ENEF provides loans for energy efficiency investments in central government buildings and guarantees for modernization of cities' street lighting. Energy Efficiency Fund (ENEF)169 Mitigation Ministry of Finance, Ministry of Energy, Public Investment Development Agency Public and private (blending) Loans and guarantees Energy efficiency and public street lighting Climate Change Special Programme170 Adaptation and mitigation Assigned Amount Units and EU Emission Allowances; donations; penalties to operators. Public Grants Energy efficiency, renewable energy, environmentfriendly technologies, reforestation and afforestation, education programmes on climate change, and climate change management. A special programme to finance climate change mitigation and adaptation measures in Lithuania was launched in 2009. Programme for Environment and Climate Cooperation171 Adaptation and mitigation Nordic Council of Ministers and the Barents Hot Spots Facility Public Grants Climate projects in general Programme for Environment and Climate Co-operation between Nordic and North-West Russian non-commercial partners. It provides grant financing for cooperation projects that contribute to improvements of the environment and climate in North-West Russia. 169 170 VIPA (Public Investment Development Agency), Municipality grants, viewed 3 July 2017, http://vipa.lt/page/enefen Ministry of Environment of the Republic of Lithuania, Climate Change Special Programme: overview, viewed 3 July 2017, http://www.am.lt/VI/en/VI/index.php#a/538 171 Nordic Environment Finance Corporation (NEFCO), Programme for Environment and Climate Co-operation, viewed 3 July 2017, https://www.nefco.org/work-us/ourservices/grants/programme-environment-and-climate-co-operation 47 Financing options Field Financing source Type Financing vehicle Sectors/areas Short description Loans on market terms for energy efficiency, renewable energy district heating and pollution abatement. The maximum amount is EUR 5 million. Projects must be economically viable and have a positive environmental impact. Available also to Estonia, Latvia and Poland. NEFCO's Investment Fund172 Mitigation Nordic Environment Finance Corporation (NEFCO) Private Loans and equity Energy efficiency, renewable energy district heating and pollution abatement Municipality Grants173 Adaptation and mitigations National funding (managed by VIPA174) Public Grants Sustainable energy and transport, flood prevention, water measures and other adaptation projects eligible under ESIF National government grants available to municipalities to cofinance ESIF projects. 172 173 Nordic Environment Finance Corporation (NEFCO), Investment Fund, viewed 3 July 2017, https://www.nefco.org/work-us/our-services/loans-and-equity/investment-fund VIPA (Public Investment Development Agency), Municipality grants, viewed 3 July 2017, http://vipa.lt/page/municipality_grants 174 VIPA is the Lithuanian Public Investment Development Agency. 48 Annex 3: List of references African Development Bank, Asian Development Bank, European Bank for Reconstruction and Development, European Investment Bank, Inter-American Development Bank Group and World Bank Group, 2015 Joint Report on Multilateral Development Banks' Climate Finance, August 2016, viewed 31 July 2017, http://www.eib.org/attachments/documents/joint_mdb_report_on_climate_finance_2015.pdf Climate Alliance, 2015, EIB consultation on financing climate action, 16 March 2015, viewed 21 July 2017, http://www.eib.org/attachments/consultations/eib_climate_action_comments_cli matealliance_20150817_en.pdf Climate Alliance, 2016, Accounting rules creating barriers for mobilising energy efficiency investments, 21 June 2016, viewed 10 July 2017, http://www.climatealliance.org/fileadmin/Inhalte/7_Downloads/ClimateAlliance WrittenEvidence-1.pdf Climate Alliance, Eurocities, Energy Cities, RES Coop, Énergies POSIT'IF, 2017, Joint statement on local energy efficiency financing, viewed 10 July 2017, http://www.climatealliance.org/newsroom/news/news-detail/networks-releasejoint-statement-on-energy-efficiency-financing.html Climate Bonds Initiative, 2015, Bonds and Climate Change: the state of the market in 2015, viewed 5 July 2017, https://www.climatebonds.net/files/files/CBIHSBC%20report%207July%20JG01.pdf. Climate Bonds Initiative, 2017, Green Bonds Highlights 2016, viewed 5 July 2017, https://www.climatebonds.net/files/files/2016%20GB%20Market%20Roundup. pdf. Cochu, A. et al., 2016, Study on the potential of green bond finance for resource-efficient investments, November 2016, viewed 5 July 2017, http://ec.europa.eu/environment/enveco/pdf/potential-green-bond.pdf Committee of the Regions, 2015, Contribution of the Committee of the Regions to the stakeholder consultation of the European Investment Bank on the Bank's approach to supporting climate action, viewed 21 July 2017, http://www.eib.org/attachments/consultations/eib_climate_action_comments_co r_20150817_en.pdf 49 Committee of the Regions, 2016, Results of the CoR online consultation on obstacles to investments at local and regional level, September 2016. Covenant of Mayors for Climate & Energy, 2016, Quick reference guide on financing opportunities for local climate and energy actions (2014-2020). Covenant of Mayors, 2016, Sustainable energy investment in European local authorities, Report based on a survey by the Covenant of Mayors Office, May 2016. COWI, 2016, Mainstreaming of climate action into ESI Funds ­ Final report, European Commission DG Climate Action. De Boer, F., 2015, White Paper: Barriers to Private Sector Investments into Urban Climate Mitigation Projects, CDP with support from Low Carbon City Lab. Deng-Beck, C. and Price, L. 2016, Gap Analysis Report: Closing the gap between finance and urban climate action, viewed 10 July 2017, http://elib.iclei.org/wp-content/uploads/2016/03/Gap-analysis-report_final_20160307final.pdf E3G, 2014, Cities and resilience to climate change ­ Workshop summary, viewed 10 July 2017, https://www.e3g.org/docs/E3G_Workshop011014_Writeup.pdf. 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Environment Facility, viewed 28 June 2017, https://www.thegef.org/about/funding Global Environment Facility, viewed 9 August 2017, https://www.thegef.org/ ICLEI, Finance, viewed 14 July 2017, http://www.iclei.org/activities/finance.html INTERACT, 2017, viewed 04 July 2017, http://www.interact-eu.net/ JASPERS, 2017, viewed 04 July 2017, http://jaspers.eib.org/ Low Carbon City Lab, Climate-KIC, viewed 14 July 2017, http://local.climatekic.org/projects/climate-finance-for-territories/ Ministère de l'Aménagement du Territoire, de la Ruralité et des collectivités territoriales, Le fonds de soutien à l'investissement local, viewed 30 June 2017, https://www.territoires.gouv.fr/le-fonds-de-soutien-a-linvestissement-local-fsil/ Ministry of Environment of the Republic of Lithuania, Climate Change Special Programme: overview, viewed 3 July 2017, http://www.am.lt/VI/en/VI/index.php#a/538 National Trust Eco-fund ­ Bulgaria, viewed 4 July 2017, http://ecofundbg.org/en/home/ Nordic Environment Finance Corporation (NEFCO), Investment Fund, viewed 3 July 2017, https://www.nefco.org/work-us/our-services/loans-andequity/investment-fund Nordic Environment Finance Corporation (NEFCO), Programme for Environment and Climate Co-operation, viewed 3 July 2017, https://www.nefco.org/work-us/our-services/grants/programme-environmentand-climate-co-operation Sustainable Energy Authority of Ireland, Better Energy Communities, Deep Retrofit Pilot Programme, viewed 5 July 2017, http://www.seai.ie/Grants/Better_Energy_Communities/ Sustainable Energy Authority of Ireland, Deep Retrofit Pilot Programme, viewed 5 July 2017, http://www.seai.ie/Grants/Deep-Retrofit-Programme/ Sustainable Energy Authority of Ireland, Electric Vehicle Grant Scheme, viewed 5 July 2017, http://www.seai.ie/Grants/Electric_Vehicle_Grant_Scheme/ URBACT, 2017, viewed 04 July 2017, http://urbact.eu/ 56 VIPA (Lithuanian Public Investment Development Agency), Municipality grants, viewed 3 July 2017, http://vipa.lt/page/enefen 57 Annex 4: List of stakeholders interviewed Type of stakeholder City network City network Local and regional authorities network Network of organisations Think tank Think tank Financial institution International organisation Consultancy Name Climate Alliance Eurocities POLIS Climate-KIC, Low Carbon City Lab programme Institute for Climate Economics (I4CE) 2 Degrees Investing European Investment Bank Climate Bonds Initiative Ecofys (lead organisation responsible for delivering the Mayors-ADAPT project) 58 Annex 5: Methodological note Task 1: Desk research (part 1 of final report) Existing climate funding opportunities for Local and Regional Authorities (hereinafter LRAs) will be identified based on desk research in the following areas: EU and international funding (e.g. ESIF, LIFE, EIB, EBRD, Green Climate Fund); National public funding (e.g. development and investment banks); National private financing instruments (e.g. commercial banks, green bonds). Table 6 presents a preliminary non-exhaustive list of sources that provide information on the existing climate financing resources for LRAs. Table 6 Preliminary list of sources for the summary of existing climate finance instruments Public/ private EU/ national/ local Author/ organisation financing financing Covenant of Mayors (Overview of existing Public and private EU funding sources and cities' action plans) (incl. blending) Institute for Climate Economics (I4CE) Public and private (FR) EIB National Public and private EU (incl. blending) Other EU and national EU and national EU and national EU and national EU and national National National Cities Climate Finance Leadership Alliance Public and private (CCFLA) UNFCCC (national reports) National RE action plans to the EC National EE action plans to the EC Climate Bonds Initiative (CBI) Energies POSIT'IF (FR) Caisse des Dépôts (FR) KfW (DE) Public Public Public Private Public and private Private Private The research team will use the template illustrated in Table 7 to gather relevant information on the existing climate funding opportunities for LRAs. The template will allow an effective collection of information to cover different types of funding, as well as different Member States. 59 Table 7 Template for collecting information and examples of the existing climate funding opportunities for LRAs EU/ Funding Funding Climate mitigation Public/ private/ national instrument source and/or adaptation blending EU EU [...] ERDF ESIF Compass FI EU budget Climate mitigation Public and adaptation EU budget and Climate mitigation private Blending and adaptation resources The desk research on national public and private funding opportunities will be carried out for a selection of three or four EU Member States. The selection will be mainly based on the existence of national climate finance in the country and availability of information. To the extent possible, geographic representation of the selected countries will be sought. Possible countries to include are: Bulgaria, France, Germany, Netherlands, Italy, one Baltic State (e.g. Lithuania), Ireland. The research team will discuss the selection with the Committee of the Regions before finalisation. The main output of Task 1 will be Part 1 of the draft final report `Summary of the existing climate finance instruments that are available to EU regions and cities'. Task 2: Literature review (parts 2 and 3 of final report) The literature review on climate financing for LRAs will focus on the following research topics, as specified by the Committee of the Regions: The obstacles faced by LRAs in accessing the climate tools identified in Task 1; Recommendations to improve climate finance for LRAs. A preliminary non-exhaustive list of literature sources is presented below: Cities Climate Finance Leadership Alliance, 2015, The state of city climate finance 2015. Energy Efficiency Financial Institutions Group, 2015, Energy Efficiency ­ the first fuel for the EU Economy: How to drive new finance for energy efficiency investments. Germanwatch, 2015, Finding the Finance, Financing Climate Compatible Development in Cities. I4CE, 2016, Landscape of climate finance in France. Norden, 2015, Public-Private Partnerships for Climate Finance. ODI, 2015, Climate finance for cities How can international climate funds 60 best support low-carbon and climate resilient urban development?, Working paper 419. Sullivan R., A. Gouldson & P. Webber, 2013, `Funding low carbon cities: local perspectives on opportunities and risks', Climate Policy, 13:4, pp. 514-529. UNEP, 2014, Climate Finance for Cities and Buildings ­ A Handbook for Local Governments, UNEP Division of Technology, Industry and Economics (DTIE), Paris. World Bank, 2011, Guide to Climate Change Adaptation in Cities. The results of the literature review will feed into the drafting of Parts 2 (`Analysis of the main obstacles LRAs face when using climate finance instruments') and 3 (`Recommendations for further improving access to and use of climate finance instruments by EU regions and cities') of the draft final report. Task 3: Interviews (parts 2 and 3 of final report) The research team will carry out a maximum of 10 semi-structured interviews with relevant stakeholders. The main stakeholders' group will be associations representing national LRAs at the EU level. If possible, a national or EU financial institution will be included in the list of stakeholders to include the financial sector's point of view in the analysis. In the following, we present a preliminary list of stakeholders to interview: Covenant of Mayors; Energy Cities; Eurocities; ICLEI; The Council of European Municipalities and Regions (CEMR); Climate Alliance; Union of Baltic Cities; EIB or national investment bank. Based on Milieu's previous experience in stakeholders' consultations, we suggest sending to the stakeholders a letter of support from the Committee of the Regions when contacting them in order to increase the response rate. Examples of questions that will be asked during the interviews include: What climate finance options for LRAs are you familiar with? Which of these options do you think are most suitable for LRAs? Why? What is the experience of your organisation or within your member organisations with any specific climate finance options that have been 61 used? What do you think are the main obstacles to access the following types of climate finance for LRAs? EU funding (e.g. ESIF) Blending facilities National public funding National private financing (e.g. loans from commercial banks) How do you think that these obstacles can be overcome? The main challenge that we envisage in performing Task 3 is the short time frame to contact the relevant stakeholders and carry out interviews. To face this challenge, the research team will start contacting the stakeholders as soon as the methodology note is finalised with the Committee of the Regions. The information collected through interviews will provide the basis for analysing the obstacles faced by LRAs in accessing climate finance, as well as formulating recommendations for further improvement. The recommendations will be structured by groups of actors: LRAs, policy-makers at EU and national level, and private and public finance institutions. The main output of Task 3 will therefore be drafting Parts 2 and 3 of the draft final report. Task 4: Preparation of the final report Parts 1, 2 and 3 of the draft final report will be put together to prepare the draft final report due 24 July 2017. The draft final report will have the structure outlined in the Request for Services and will be revised based on comments and feedback by the Committee of the Regions to prepare the final report. Table 8 Outline of the final report Description Section Notes Summary [1 Summarises the objectives of the The summary will serve as an page] study, its research questions, its introduction to the report and will structure, and the content of Parts 1 synthesise the main findings to 3. Part 1 [ca. 8 pages] Summary of the existing climate Part 1 will contain primarily the finance instruments that are findings of the desk research (Task 1). available to EU regions and cities. Any relevant findings from tasks 2 and 3 will also be included. Analysis of the main obstacles Part 2 will contain the findings of the LRAs face when using climate literature review (Task 2) and the finance instruments. interviews (Task 3). Recommendations for further Part 3 will contain the findings of the Part 2 [ca. 6 pages] Part 3 62 Section [ca. 6 pages] Description Notes improving access to and use of literature review (Task 2) and the climate finance instruments by EU interviews (Task 3). regions and cities. Methodological note; References The final methodology note, list of and other information sources; list sources consulted during the desk of stakeholders consulted, if any. research and literature review, list of stakeholders interviewed, interview questionnaire or any other relevant input will be added as Annexes to the report. Annex(es) 63 EN ISBN 978-92-895-0940-4 doi:10.2863/329600 QG-01-17-925-EN-N Created in 1994 following the signing of the Maastricht Treaty, the European Committee of the Regions is the EU's assembly of 350 regional and local representatives from all 28 Member States, representing over 507 million Europeans. 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