Role of ODA Loans forenabling LCS
The 3rd Workshop of Japan-UK Joint Research Project“Roadmap to Low-Carbon World”
13th-15th February, 2008
Tokyo.

Tomonori SUDO
Advisor, Coordination Division,Development Assistance Strategy Department
Japan Bank for International Cooperation (JBIC)

What is ODA Loans ?

ODA Loansz Government to Government (G-G) loans

z Focus on development objectivez Support public projects and public-private partnership projects
z Low commercially viable projects
z Create enabling environment for private investors to invest inDeveloping countries.

Japanese ODA Loan offers very concessional terms
and conditions for environmentally sound projects(Interest rate: 0.55%-0.65% p.a.,
Repayment period : 40 years with 10 years graceperiod)

Japan’s ODA Policies and JBIC OECO’s Strategy
Government of Japan

Japan’s ODA Charter
Mid Term Policy on ODA

Basic Policy for Japan’s ODA

Mid-term Policy for Japan’s ODA

JBIC’s Basic Strategy for ODA Loan Operation

The Medium-Term Strategy forOverseas Economic Cooperation Operation
Basic Approach(1) Focus on Development Results(2) Medium to Long Term Perspectives(3) Efforts for Transparency of Japanese ODA Loans
Priority Areas(1) Poverty Reduction(2) A Foundation for Sustained Growth(3) Global Issues and Peace Building(4) Human Resources Development

ODA Loans as policy incentive toolMillion USD

6,000

70

5,000

60
50

4,000

40

3,000

30

2,000

20

1,000

10001997

1998

1999

2000

2001

Loan Amount
Share in Total ODA Loansz2002

2003

2004

2005

2006

Number of Loans

Introduced “Special terms and condition for environmental
projects/programmes (0.75% of interest rate and 40 years
repayment period)” as a part of Kyoto Initiative in 1997.
Î Since then, number of environmental projects has been
increasedzz

Effectively work as “policy incentive tool”
Stocktaking of “know-how” to address to climate change

FYNumber/Per cent

Trend of Environmental ODA Loansz

What type of existing / future financing
schemes could be applicable LCS?
zODA Loansz Project Loans Æ Support LCS
z Development policy Loans (DPLs) ÆSupport SD-PAM
z Two Step Loansz Engineering Service Loan
=Co-finance with WB, ADB, GEF and/or other donors arewelcome.

zTechnical Assistancez Special Assistance facility (SAF)We support to generate “co-benefit”.
<Sample case>

Increase ofPower Demand,RuralElectrifications

Needs toIncrease
Power supplyÆ
Constructionof New Power
Stations

New Technology+ODA（Finance and T/A）

Developmentalbenefit

Increase ofpower supply
Development
Objectives

Policy Æ
Project

Could it reduce
GHG?

ProjectImplementation

Introduce
climate friendly
technology

GHG
Reduction
Mitigation of
Climate Change(Global Benefit）

Co-benefit!

Climate Change Program Loan
supporting SD-PAM (Concept Image)National Development Strategy Addressing Climate Change
Bi-Donors

Japanese Assistance
UNUS

Multi-donor fundEC

AUS

PolicyDialogue

ProgramAssistance

ProjectAssistance

ActionProgram-typed Assistance for 2007-09
Policy Dialogue/ General Budget Support
Pillar 1： Mitigation
1.1：LULUCF(Land Use, Land
Use Change andForestry)-Forestry-Implementation ofincentive
mechanism-Supporting
policies

Pillar 2： Adaptation

1.3：Energy-Power plant-Transportation-Industry-Domestic(household) andcommercial-Others

1.2：Marine-To increasecarbon absorption

2.1：Water
Resource

2.2：Agriculture

2.3：Marine,Coastal andFisheries

2.4：Infrastructure

2.5：Health

2.6：Forestry andBiodiversity

Pillar 3： Cross-cutting Issues
3.1：Understanding the
Impact of Climate
Change3.2：Mainstreaming
Climate Change in theNational Development
Program

3.3：CDM

3.4：Co-Benefits

Project Assistance to executing agencies (line ministries)
ProjectTAProjectTA

mutually complementary
relationship

Multi-donor fundandother donors’ projects

ProjectTAProjectTA

Mechanism of Program Loan
CY2008

CY2009CY2010・Assessment of CY2007
progress・Loan disbursement (Year 1)
・Monitoring

・Assessment of CY2008
progress・Loan disbursement (Year 2)
・Monitoring

・Assessment of CY2009
progress・Loan disbursement (Year 3)
・Monitoring

Key Points of “Roadmap to LowCarbon World”
z Enabling environment to realise LCSz Ownership with strong political will to achieve LCS
z Result-oriented development policies & actionsz Access to adequate, predictable and sustainablefinancial resources with Incentive

Investment & development environment is different
among countries due to their potential
z Political stabilityz Resource endowment

Thank you !
Please do not hesitate to contact us!
Tomonori SUDO
Tel: +81-3-5218-3170
Fax: +81-3-5218-3696
E-mail: t-sudo@jbic.go.jp