GREEN FUND PORTFOLIO OF INVESTMENT PROJECTS. Monitoring Overview 28 August 2014

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Ezra Pierce Washington
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GREEN FUND PORTFOLIO OF INVESTMENT PROJECTS Monitoring Overview 28 August 2014 During the year to date, the Green Fund s portfolio of projects with signed contracts stood at to 16 out of a total of

1 GREEN FUND PORTFOLIO OF INVESTMENT PROJECTS Monitoring Overview 28 August 2014 During the year to date, the Green Fund s portfolio of projects with signed contracts stood at to 16 out of a total of 25 approved projects. The Green Fund team undertook site visits to 14 1 projects, and was able to physically check the level of implementation progress. Emphasis was placed on checking the administrative, technical and financial aspects of the projects under implementation. This overview is based on detailed reporting and analysis of all 14 active projects. A total of 7 approved projects are in various stages of contracting (including the fulfillment of special conditions) before funds can be released. One approved project was withdrawn from the contracting process by the applicant. A second project was withdrawn by fund owing to inability of the applicants to meet conditions precedent. Annexures 1 and 2 provide the list of approved projects with key status information. In addition to on-site monitoring, the fund undertakes off-site monitoring wherein projects are obliged to provide quarterly reports on progress. The fund has been receiving reports regularly from projects. Based on assessments of the reporting, additional site visits were undertaken in some cases in order to clarify issues and provide support where necessary. From the portfolio the following can be noted: Technical 11 out of 14 active projects are well on track with implementation All in all implementation has progressed smoothly. Some projects that initially started off slowly have now begun to ramp up with some even surpassing their implementation targets. One of the projects (Use-It) that had been experiencing delays due to a necessary change of site issue, is back on track and implementation is expected to accelerate. The 3 projects that have experienced delays are being closely monitored. The projects that are experiencing significant delays are the Bamboo project, Kevlar and Betona. Engagements have been held with project owners and are ongoing. Measures have been put in place to minimise the delays to the extent possible and mitigate risks to successful implementation. 1 Project (City of Cape Town) is yet to commence implementation 1 Implementation on the 15 th project has not yet commenced owing to a condition precedent that needs to be first met. The 16 th project was cancelled. 1

2 Outstanding condition precedent related to the appointment of service providers is yet to be fulfilled. Financial Funds are being used according to budget The majority of projects have so far been able to use the funds disbursed to them in accordance with implementation plans and within budget parameters. Where there have been delays, the Green Fund s stage-gated and performance based disbursement system has helped ensure that further funds are not disbursed until milestones are met. Prudent practices have thus ensured that the fund s financial exposure to underperforming projects is minimized. Administrative Project administration is generally stable There haven t been any major issues regarding the manner in which project promoters are administering projects in general. The core teams have generally stayed intact and reporting and feedback to the Green Fund has been occurring on a regular basis. Project Risk Based on the general progress that has been made in terms of technical and financial implementation as well as project administration, the qualitative level of risk at this stage in respect of projects in the current portfolio is considered to be within bounds that are acceptable for innovative and in some instances early stage green projects. The projects that are currently experiencing challenges and associated delays are being actively monitored and the fund is working closely with them as far as possible to reactivate lost momentum. 2

3 Impacts The projects in the Green Fund s portfolio are in various stages of implementation. Accordingly, the extent to which tangible outcomes and impacts are being realized varies. Whereas there are projects that are only starting to get off the ground with implementation activities, the fund is also managing some projects that are already beginning to deliver tangible outcomes and impacts. The fund assesses the level of impact achieved in terms of economic, social and environmental dimensions through a number of high level portfolio indicator aggregates. Impact is viewed from the perspectives of actual, that has been achieved to date and potential, based on successful project completion and effects thereafter to a foreseeable future horizon. Conservative assumptions are employed on a project case by case basis in deriving potential future impact forecasts. Economic Impact Although a significant proportion of projects were funded on the non-recoverable grant basis, we anticipate that the portfolio of current commitments will generate significant economic impact, particularly in terms of revenues generated from scale up and resultant economic activity. As the summarized portfolio indicators below are showing, we except a modest increase in the number of economic enterprises within the foreseeable five year horizon as well as increasing participation of the private sector in developing the demonstrated project concepts further. As the fund invests in new projects and expands its portfolio beyond the current 15, it is anticipated that the footprint of the realizable economic impact will be amplified beyond what is currently presented. 3

4 Table 1: Portfolio impact indicators and measures Theme ECONOMIC SOCIAL ENVIRONMENTAL PORTFOLIO IMPACT INDICATORS Indicator * New economic entity creation - new enterpises that are created as a result of the implementation of the project Measurement Parameter Number of entities PORTFOLIO MEASURES Measure Achieved Potential * Revenue Generation - rand value of sales generated Rand 6,350, ,133,235 * Profitability Rand 30,000 35,331,511 * Financial asset base - rand value of assets that are created as resulf of the Rand 19,762, ,102,215 implementation of the project * Private sector participation in green initiatives - The financial contribution from Rand 44,771, ,050,000 private sector participants * Direct investments (foreign and local) including follow on funding to de-risked Rand 229,625, ,358,900 projects - total additional funds attracted by the project in addition to Green Fund support * Leveraging of other investment funds - Additional financial assistance raised by the Rand 6,825, ,200,000 project from other investment fund sources including bilateral, multilateral, private and commercial banks * Existing industries involved in implementing the green project Number * New Prototypes created Number 7 9 * Project scale up or replications arising from pilot/demonstration Number * Direct Jobs created Number 1,378 14,957 - Women Number 601 7,344 - Youth Number 1,037 11,732 - Disabled Number 16 1,200 * Indirect Jobs Number 6,117 76,735 * Green Jobs skill training Number of people trained 6,291 33,570 * Improved Access to domain specific resources (e.g number of people with clean water, Number of people 105,894 4,288,750 renewable energy, efficient transport) Climate Change * Carbon emissions reduction Tonnes (CO2) 21, ,693 Ÿ* Renewable energy installed capacity (share of power supply) Installed capacity (MW) Ecosystem Management - 4 Ÿ* Area protected - Land and marine conservation area (ha) protected from Hectares 30,008 1,015,019 development * Area restored - Land Area in which management and restoration has been Number of 16,375 24,455 implemented Hectares * Air and water quality - Diversion of toxic waste from water sources Kilogrammes 1 5 * (Number of Protected birds / animals since Green Fund's investment) Number 1,245 50,000 Resource efficiency * Total energy savings from project implementation Number of KWh 107,648 2,683,944 Chemicals and Waste Management Ÿ* Increase in waste collection Waste collected (Kg/year) 9,462,098 53,494,000 * Waste recycled and reused otherwise destined for landfill Kg 8,500,948 48,195,200 Note: Indicator measures are calculated based on information provided by project owners. The underlying assumptions, on which the estimates are based, are checked for reasonability. In the medium term, it is planned that the base data and assumptions will be subjected to independent technical verification. 4

5 Social Impact The most significant impacts arising from the current portfolio relate to improving the access to resources of marginalised communities. Some of the projects, particularly in the environmental and natural resources management window present tangible opportunities for meaningful job creation and empowerment particularly in areas related to payment for ecosystem services, tourism and sustainable land use. Innovative projects some of which showcase new technologies at the very cutting edge of their domains such as information and communication technologies will contribute significantly to the country s competitiveness. Although not all the projects are in labour intensive domains, it is anticipated that economic spillovers and multiplier effects are likely to result in indirect job opportunities also being created. Significant green skills training opportunities are already being realized in most of the projects and this is expected to increase substantially through replication and scale-up of the portfolio. Environmental Impact All of the projects are expected to yield strongly positive environmental impacts particularly in terms of carbon emission reductions and ecosystem management. A great deal of impact is already beginning to be demonstrated with respect to waste management. Key projects are raising awareness to the importance of recycling and reducing waste. In the area of conservation, private sector players and landowners are coming to the fore and contributing to the conservation of critical natural resources. It is anticipated that within a fairly reasonable time horizon, even more markedly positive environmental impacts and benefits will be realized over and above the current picture. 5

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