Case Studies
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Case Studies
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EFSI
The European Fund for Strategic Investment is the major pillar of the European Union’s investment plan for Europe. It uses an EU and EIB guarantee to allow the latter to invest in a broad spectrum of infrastructure, SME, banking and fund of fund investments. As such it is the biggest Infrastructure fund structure globally. Since inception in 2015, it has invested in over EUR50 billions of underlying projects and companies, split between SME’s (30%), R&D (22%), Energy (20%), digital (11%) and transport (9%), with social impact and efficiency investments making up the remainder.
UNCDF
UNCDF is the UN’s capital investment agency for the world’s 47 least developed countries (LDCs). With its capital mandate and instruments, UNCDF designs finance models to unlock private resources and to reduce poverty and support local economic development. The UNCDF is trying to reach pockets of poverty, where available resources for development are scarcest; where market failures are most pronounced; and where benefits from national growth tend to leave people excluded. UNCDF is involved in advocacy, advisory services and investments. Gregor sits on the Impact Investment Committee, which makes commercial lending decisions on borrowing propositions from SME’s in countries like Myanmar, Cambodia, Tanzania, Benin, and Burkina Faso.
Mergence
Mergence is a full service listed and unlisted equity and debt house that specializes in investing funds on behalf of institutional and pension fund clients. It is based in Cape Town, South Africa. Mergence is a 100% black-owned, organically grown, South African asset manager, who was the most active non-bank players in the earlier investment activity into the renewable energy sector experienced in South Africa. Mergence now has three Infrastructure facilities targeting respectively; senior debt, equity and mezzanine positions in attractive Infrastructure assets, as well as numerous projects in the Southern African market.
Green Investment Bank & UK Climate Investments
Gregor was previously the Managing Director of the UK Green Investment Bank (UK GIB). The GIB was an institution created by a UK Act of Parliament, which in three short years has grown into a global leader in the Green Infrastructure investment sector. Initially allocated £3.8bn, it successfully concluded over 70 individual investments in clean energy infrastructures in the UK from £10m in transactions in Public Lighting to £270m in investments in offshore wind farms. The UK GIB has subsequently been privatized through a sale to Macquarie Bank and renamed the Green Investment Group. While MD, Gregor also sat on the UKCI Investment Committee. UK Climate Investments is a joint venture company between the government department BEIS and the GIB with a funding commitment of £200m focusing on equity and quasi-equity investments in renewable energy and energy efficiency in South Africa, East Africa and India.
Coalition for Green Capital
The Coalition for Green Capital (CGC), a non-profit, is a leading expert and advisor on Green Banks and related clean energy finance and deployment entities. The Coalition for Green Capital’s (CGC) mission is to drive greater clean energy investment into existing and new markets, in the United States and in developing countries with the goal of creating a 100% clean energy platform. To realize this goal, CGC incubates local clean energy finance organizations – often called Green Banks – and structures public, private and mission-driven capital for investment through those organizations. A large network of local clean energy finance organizations can access hard-to-reach projects, expand clean energy equity, and provide a scalable model for a thriving network for clean energy investment. CGC, a 501c3 non-profit, is the leading expert and implementer of Green Banks, with a decade of work around the world that has led to over $2 billion of clean energy investment.
Gregor is Chairman of the Investment Committee for SEACEF
SEACEF is designed to play a catalytic role in reducing and removing many of the key early-stage barriers that stall or prevent successful clean energy projects and businesses. By placing development risk capital into innovative, high-impact clean energy opportunities, SEACEF intends to have a leveraged impact to accelerate Southeast Asia’s clean energy transition. SEACEF is currently active in Vietnam, Indonesia, and the Philippines.
SEACEF is focused on the scale-out of globally proven technologies and business models such as solar, wind, and energy storage (on-grid and behind the meter), plus other business models that accelerate the low carbon transition – such as transmission infrastructure, demand side management technology, and e-mobility.
North Macedonia Innovation Fund
Gregor is member of the Investment Committee for the North Macedonian Innovation Fund - appointed through a competitive process originally advertised in the Economist.
The mission of the Fund for Innovation and Technological Development is to encourage and support innovation activities in micro, small and medium-size enterprises (MSMEs) in order to achieve more dynamic technological development based on knowledge transfer, development research and on innovations that contribute to job creation, and to economic growth and development, while simultaneously improving the business environment for the development of competitive capabilities of companies. The priorities and objectives are to improve access to financial support for innovation and technological development and to promote and encourage innovation activities in North Macedonia.
Middle Eastern Sovereign Wealth Fund
Working alongside the Global Strategy Consultancy, Boston Consulting Group, PJ and Company has provided expert strategic advice on fund establishment, fund governance, asset allocation, institutional setup, investment policy and risk management procedures. These have been in service of a number of newly established vehicles by a Middle Eastern sovereign. PJ and Company continues to work closely as a subject matter expert with the BCG teams in the Middle Eastern market.
Blue Economy Investment Platform
The Blue Economy is already significant and comprises shipping, fisheries, aquaculture, marine renewables, bioeconomic and even coastal tourism. In 2012, the Commission estimated that it represented over 5 million jobs and a gross added value of around €500bn per year. It also affects a large number of the EU population, with an estimated 40% living within 50km from the sea. The European Commission's Directorate General for Maritime Affairs and Fisheries is developing an approach to promote innovation and mobilize investment in the blue economy. This is encouraged through establishing a project pipeline of potential initiatives. PJ and Company is part of a team that is currently consulting with the European Commission on the establishment of a dedicated investment platform for the Blue Economy.
World Bank
Most of Kenyan pension funds are far smaller in scale and lack the experience and expertise to move into new asset classes. One way to overcome these hurdles is for pension funds to come together and co-invest via collaborative investment platforms. This was the route taken by, for example, several pension funds in the UK – which established the Pension Infrastructure Investment Platform (PIP) in 2013. This Kenyan project has involved creating an investment strategy for a group of Kenyan pension Funds that will allow them to invest in Infrastructure as an asset class in Kenya and the East African community. It comprised legal and commercial structuring, consideration of the market potential, governance structures and alignment with regulation by the CMA, the Retirement Benefits Authority and the Kenyan Revenue Authority.
Vietnam Green Banking
Green energy is expected to be a new business category at the local bank. However, providing credit for green energy is a quite new thing to many local commercial banks. Therefore, it is very necessary to develop regulations and guidelines for the local banks on providing credit for the green energy projects. In addition, in the context of limited sovereign loans, finding new methods and approaches for the energy sector investment is of extremely necessary due to high capital requirement for development of the energy sector. This project is applying international best practice to green credit mechanisms and policies and developing guideline for credit institutions to extend credit to green energy projects. In addition, it is developing financing model for accessing foreign concessional loans of credit institutions I the form of a separate investment institution in Vietnam.
UNDP – Credit Guarantee Fund Ethiopia
The government of Ethiopia required support in providing electricity to the millions of households that currently don’t have access to power. And by extension also reducing pressure on indigenous forest resources. This is why the United Nations Development Programme (UNDP) and the Ministry of Water, Irrigation and Electricity (MoWIE), with support from United Nations Capital Development Fund (UNCDF), initiated a project. One that would see the implementation of a more market-based approach towards promoting renewable energy technologies in rural communities all throughout Ethiopia and even impact African renewables in general.
A key pillar of this strategy was the operationalization of a Credit Risk Guarantee Fund, to provide partial credit risk guarantees and to increase the availability of capital for investments (CAPEX) or working capital requirements (opex) of RET enterprises. Particularly, for the distribution of solar home systems, bio-digesters (anaerobic digesters) producing biogas, and clean cookstoves. Work involved legal structuring, tender documentation, capital adequacy and accounting treatment advice, material contract terms, and governance structures.
UNCDF LDCIP
The Least Developed Economies Investment Platform is a pilot infrastructure providing commercial lending to private sector SMEs in the most impoverished countries in the world. It lends based on strict commercial underwriting principles and prices the lending risk accordingly. On certain occasions, this capital is blended with concessional financing to accelerate the development or sustainability of a particular business. Work included the creation of a fund specific loan underwriting tool, forex hedging, investment policies and procedures, standard financial models, structuring and standard financing documentation and material terms for client lending in a number of least developed economies. PJ and Company now sits on the Investment Committee for this facility.
Carbon Credit Note
The Carbon Credit Note was the world’s first listed Carbon Investment vehicle. It was listed on the equities platform on the JSE Securities Exchange in South Africa in 2004. It was innovative not only because it was the first listed product in the Clean Development Mechanism of the UNFCCC (as well as predating the formal launch of the EUA trading market in Europe), but it was also the first inwardly listed financial product on the JSE. It was also the second inward listing on the exchange in its history.
PJ and Company conceptualized the financial product, conducted all negotiations with regulatory bodies in South Africa and Mauritius, including with the FSC, the FSB, the Reserve Bank, SARS and the JSE Securities Exchange. He negotiated the counterparty agreements with Eco-securities in the USA and Australia, managed the legal and technical supplier contracts, banking and Trustee relationships and finally led the distribution and product marketing too.
Nepal Credit Guarantee Fund
Through use of a blended finance instrument and capacity building activities the project aims to mainstream commercial lending for small-scale renewable energy (RE) projects in Nepal; build capacity among key stakeholders at province level for upscaling RE programmes. As part of this programme, the project is establishing a Credit guarantee facility (CGF) in partnership with NMB Bank Ltd, SNV Netherlands Development Organization (SNV) and the Alternative Energy Promotion Centre (AEPC).
UNCDF UNDP Gambia Guarantee Instrument – The Gambia Solar
The presence of risk guarantee instruments and financing provided (based on analysis performed for the World Bank) has proved essential in attracting private equity and debt investment in large and small scale renewables in Africa. On the debt side, in particular, PRGs (Partial Risk Guarantees) mobilized loans from commercial banks at maturities and interest rates comparable to development lenders: these terms allowed a reduction of the required initial tariff of at least 7% and up to 60%. This project involves the structuring of a liquidity support and termination event guarantee product to enhance the bankability for successful bidders on The Gambia’s solar projects, in conjunction with the UNCDF and UNDP.
World Bank
Uganda has recently launched a world class PPP programme which will result in a number of projects coming to market in the next few years. As the government’s debt levels have increased, so the need for local currency financing of longer tenors for infrastructure financing. Detailed analysis was required of the Institutional Fund market, the procurement processes, international bond financing models and structures, credit enhancement structures and the regulatory environment, in order to initiate a number of strands of policy, regulatory, and implementation work – all related to making it possible for bidders to use local currency bond financing as part of their debt arsenal. And to make a new asset class available to pension and insurance funds.
Get.InVest
The Finance Catalyst links renewable energy projects to finance opportunities and vice versa, targeting small- and medium-scale renewable energy (RE) projects, currently in sub-Saharan Africa.It provides advisory support on project development, project structuring and accessing finance through a team of dedicated experts with extensive experience in renewable energy project development and finance. Many of these projects are challenging for financiers due to the relatively small ticket size, and due to their limited experience with these technologies and new business models. Project developers may lack the experience, networks or time to identify appropriate sources of finance, resulting in high transaction costs and few projects reaching financial close.
UNDP SDG Innovation Finance
The United Nations Development Programme (UNDP) works in about 170 countries and territories (36 of them in Asia and the Pacific), helping countries to implement the Sustainable Development Goals (SDGs). We work closely with governments, civil society, the private sector and communities. UNDP SDG Innovation Finance (UNSIF) is a major initiative supporting the Financing for Development agenda, bringing together the public and private sector to invest for the SDGs via:
1. Policy dialogue & National ecosystem development
2. Investor engagement and Impact Measurement & Management
3. Pipeline development: impact funds, SDG bonds, incubators and accelerators, etc.
4. Innovative finance: fintech and beyond
EIB & GIZ
PJ and Company are advisors to FELICITY. FELICITY stands for Financing Energy for Low-carbon Investment - Cities Advisory Facility, and is a joint initiative of the European Investment Bank (EIB) and the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ). It is funded by the International Climate Initiative (IKI) of the German Federal Ministry for the Environment, Nature Conservation, Building and Nuclear Safety (BMUB). It offers guidance on the technical, financial and economic feasibility of investments planned in cities, procurement procedures as well as advice on a project’s social and environmental soundness to potentially meet the EIB’s requirements for financing. It also offers capacity development for municipalities to develop bankable projects and access international finance, especially for the purpose of addressing climate change.
Innovation Fund
The Innovation Fund is one of the world’s largest funding programmes for demonstration of innovative low-carbon technologies. The Innovation Fund focuses on: Innovative low-carbon technologies and processes in energy intensive industries, including products substituting carbon intensive ones, Carbon capture and utilisation (CCU), Construction and operation of carbon capture and storage (CCS), Innovative renewable energy generation, and Energy storage.
The Fund may amount to about €10 billion, depending on the carbon price. In parallel to the Innovation Fund, the EU ETS provides the main long-term incentive for these technologies to be deployed. One of the most challenging design aspects is to ensure that candidate investee projects can be evaluated on a like for like, and fair and transparent basis. This project aims to do just that.
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