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Application Title Transforming Finance to Unlock Climate Action in the Caribbean

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Application Title Transforming Finance to Unlock Climate Action in the Caribbean TRANSFORMING FINANCE TO UNLOCK CLIMATE ACTION IN THE Application Title CARIBBEAN Country/ Region Belize, Jamaica, St Lucia Accredited Entity Caribbean Development Bank Approval Date 20/09/2020 GREEN CLIMATE FUND | PAGE 0 OF 2 Request for Support from the Project Preparation Facility (PPF) Application Title Transforming Finance to Unlock Climate Action in the Caribbean Country(ies) Belize, Jamaica, St Lucia Accredited Entity Caribbean Development Bank Date of first submission/ June 8, 2020 V.1 Version number Date of current submission/ August 27, 2020 V.2 version number Please submit the completed form to [email protected], using the following naming convention in the subject line and the file name: “PPF-[Accredited Entity]- [Country]-yyyymmdd” 2017 Project Preparation Facility GREEN CLIMATE FUND | PAGE 1 OF 9 Version 2.0 Notes • The PPF supports the development of projects and programmes and enhance their quality at entry into the Fund’s pipeline. With a view to enhancing the balance and diversity of the project pipeline, the PPF is designed to especially support Direct Access Entities for projects in the micro-to-small size category. International Accredited Entities seeking project preparation support from the PPF are encouraged to do so especially for LDCs, SIDS and African countries where no Direct Access Entity is accredited. All Accredited Entities are encouraged to articulate counterpart support for project preparation within their requests for support from the PPF. • A PPF submission should include below documents: 1. PPF request (this form) 2. PPF No-Objection letter1 3. Concept Note • Please copy the National Designated Authority (ies) when submitting this PPF request. • Requests for support from the PPF should be submitted at the same time or following submission of a GCF Concept Note for a project or programme. • Further information on GCF PPF can be found on GCF website Project Preparation Facility Guidelines. 1 Please note that the PPF No-Objection Letter is different from the Funding Proposal No-Objection Letter. PPF No-Objection Letter template can be downloaded from here. Project Preparation Facility GREEN CLIMATE FUND | PAGE 2 OF 9 Version 2.0 A. Executive Summary Daniel Best Director, Projects Department [email protected] Accredited Entity +1 (246) 539-1710 (AE) Caribbean Development Bank P.O. Box 408 Wildey, St. Michael Barbados Has a Concept Note Yes ☒ No ☐ Yes ☒ No ☐ been submitted in Transforming Finance to Unlock Has a No-Objection association with Climate Action in the Caribbean Letter been submitted this request for for this request for support from the support from the PPF? PPF? Total Cost [This information has been withdrawn for confidentiality purposes] Anticipated Number of months to implement the Project Preparation activities: 12 months Duration 1. Through this application, the Caribbean Development Bank (CDB) is requesting financial resources from the GCF Project Preparation Facility (PPF) to develop a full funding proposal for the Transforming Finance to Unlock Climate Action in the Caribbean programme (hereafter referred to as “the programme”). The programme aims to unlock the private sector investment needed to transform Caribbean productive sectors and energy systems by catalysing a transformation of finance. The programme will accomplish this by blending GCF and CDB resources to extend concessional lines of credit to Development Finance Institutions (DFIs), who in turn will on-lend to MSMEs and homeowners for climate action investments.2 The programme will simultaneously deliver technical assistance to facilitate programme lending and support the transformation toward climate-informed lending by Caribbean DFIs. In delivering this support, the programme aims to: • Achieve tangible results during its implementation period, both with regards to (a) increasing lending and investment as well as (b) reducing/avoiding greenhouse gas emissions and enhancing resilience to the incremental risks/challenges associated Summary of the with climate change; and request for Project • Equip Caribbean financial service providers and local private sector actors with the Preparation support knowledge and capacity needed to enable the continued flow of financing for climate action investments after programme closure. 2. To develop a complete funding proposal (and associated annexes) for the programme, CDB is requesting GCF PPF resources to support the following: ACTIVITY DELIVERABLES 1) Assess relevant baseline conditions in • Sub-project project eligibility criteria. each partner country, define programme- • Consolidated feasibility study, including eligible support, and develop the country profiles and indicative lists of eligible programme eligibility criteria and a technologies/practices. consolidated feasibility study. 2) Develop an Environmental and Social • Consolidated ESMS report, including a Management System (ESMS) for the stakeholder engagement plan, programme- programme. specific grievance redress mechanism, and records of in-country consultations. 2 Each portfolio of programme-supported sub-loans managed by a particular DFI will hereafter be referred to as a “project”. Each project/investment financed by a particular MSME or homeowner through a sub-loan from a DFI that is itself financed through a CDB line of credit (and thus part of a project) will hereafter be referred to as a “sub-project”. Project Preparation Facility GREEN CLIMATE FUND | PAGE 3 OF 9 Version 2.0 3) Develop a gender assessment and • Consolidated gender assessment and Gender Gender Action Plan (GAP) for the Action Plan (GAP), including records of in- programme. country consultations. 4) Develop an integrated financial model • Initial programme costing/budget. to help structure the programme and • Impact potential estimates. assess its benefits. • Financial analysis with sensitivity analysis. • Economic analysis with sensitivity analysis. 5) Formulate the programme funding • Funding Proposal. proposal and operations manual, building • Programme Operations Manual. on all deliverables produced under • Detailed programme budget (using GCF Activities 1-4. template). • Procurement plan. • Timetable of programme implementation. • Term Sheet. B. Description of Project Preparation Activities Month Outputs and Activities 1-3 4 5 6 7 8 9 10 11 12 13 Procure services for Activities 1-5. X Activity and deliverable 1: Assess relevant baseline conditions in each partner country, define programme- eligible support, and develop the programme eligibility criteria and a consolidated feasibility study. PPF activity area: Pre-feasibility, feasibility studies and project design Activity: Under this Activity, the selected firm will lead the process of designing and formulating the core technical elements of the programme, and those of the projects and sub-projects it will finance. To accomplish this, the selected firm will: (i) work with partner DFIs to identify and prioritize ‘focus sectors/areas’ for each project; (ii) define key climate change challenges/opportunities in the ‘focus sectors/areas’ in each country; (iii) collect baseline information on the ‘focus sectors/areas’ in each country; (iv) identify priority X technologies/practices to be promoted/supported through the programme; (v) assess the supply and demand for financing within the ‘focus sectors/areas’ in each country; (vi) define the implementation arrangements and flow of funds for the programme, and assess its operational feasibility; (vii) develop the sub-project eligibility criteria for the programme; (viii) assess prospects for developing an initial pipeline of sub-projects; and (ix) develop the consolidated feasibility study for the programme. Deliverables: (i) a set of sub-project eligibility criteria, including all relevant guidance, methods and tools; and (ii) a consolidated feasibility study, including a detailed ‘country profile’ for each country, as well as an indicative list of eligible technologies/practices and a list of excluded technologies/practices. Project Preparation Facility GREEN CLIMATE FUND | PAGE 4 OF 9 Version 2.0 Activity and deliverable 2: Develop an Environmental and Social Management System (ESMS) for the programme. PPF activity area: Environmental, social and gender studies Activity: Under this Activity, the selected firm will lead the process of defining how the programme will ensure appropriate environmental and social (E&S) safeguards are adhered to in all projects and sub-projects. The selected firm will: (i) identify an initial list of E&S risks that may arise during sub-project implementation, as well as define appropriate risk mitigation and management X measures (including through in-country consultations); (ii) design a system (the ESMS) for ensuring E&S risks are properly screened and mitigated/managed within all projects and sub- projects; (iii) identify any/all capacity-building support the DFIs will require to adhere to the ESMS; and (iv) draft a report that captures all of this information. Deliverables: a consolidated ESMS report, including all information described in sub-activity 2(d) of these TORs. Activity and deliverable 3: Develop a gender assessment and Gender Action Plan (GAP) for the programme. PPF activity area: Environmental, social and gender studies Activity: Under this Activity, the selected firm will lead the process of defining how the programme will ensure that gender considerations are properly mainstreamed in all projects and sub- projects. The selected firm will: (i) conduct an X assessment of gender dynamics and
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