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The lab provides reference for investors from different angles (e.g., research, financial, 2.2
governmental, and private investment, etc.) and consult with investors for the sake of
the best forms of investment.
Public–Private Partnerships (PPPs)
As an important supplement to public finance and private finance
is an important source of fund for local governments to effectively
develop the low carbon economy. As this economy further develops,
it requires more and more capital. To finance the low carbon growth
only through the public sector is not sustainable in terms of both time
and budget, and excessive government support cannot effectively
promote industrialization and commercialization of the low carbon
growth. It is therefore not conducive to the reduction of cost, impeding
normal development of the low carbon economy. The PPP led by the
government is nowadays quite widely adopted in a majority of the
OECD countries, but varies greatly in content and organizational
structure from country to country. It covers a wide range of forms
ranging from the simplest government-entrusted management
contract to the private finance initiative.7
Under this model, the private sector can effectively participate
more in the design and early analyses of the projects; in return, the
private sector can utilize capital in the long run (Box 2.3), rather than
undertake the contracted government work in strict accordance with
contract in the traditional way. This is very helpful in dispersing risks
and lowering the cost of investment. Table 2.9 summarizes cities which
employ the PPP form of financing successfully. Box 2.4 presents a
success story in the innovation of low carbon financing where the local
governments and private enterprises provide guarantee jointly.
Another example is the Infrastructure Credit Guarantee Fund
(ICGF) of South Korea, managed by the Korea Credit Guarantee Fund.
It aims to provide guarantee for low carbon projects, funded jointly
by public and private sectors. The fund of the ICGF comes from three
sources—the government fund, the guarantee fee, and the return of
investment. Guarantee for low carbon projects is capped at 100 billion
Won, or 200 billion Won in some special circumstances, with the
annual rate of guarantee standing at 1.5 per cent. The ICGF provides
effective support for the low carbon green city and overall green
7 OECD, Les Partenariats Public–Privé: Partager les Risqueset Optimiser les
Ressources.Paris: OECD 2008.
Chapter 2 Innovative Financing for Low Carbon Development 103
governmental, and private investment, etc.) and consult with investors for the sake of
the best forms of investment.
Public–Private Partnerships (PPPs)
As an important supplement to public finance and private finance
is an important source of fund for local governments to effectively
develop the low carbon economy. As this economy further develops,
it requires more and more capital. To finance the low carbon growth
only through the public sector is not sustainable in terms of both time
and budget, and excessive government support cannot effectively
promote industrialization and commercialization of the low carbon
growth. It is therefore not conducive to the reduction of cost, impeding
normal development of the low carbon economy. The PPP led by the
government is nowadays quite widely adopted in a majority of the
OECD countries, but varies greatly in content and organizational
structure from country to country. It covers a wide range of forms
ranging from the simplest government-entrusted management
contract to the private finance initiative.7
Under this model, the private sector can effectively participate
more in the design and early analyses of the projects; in return, the
private sector can utilize capital in the long run (Box 2.3), rather than
undertake the contracted government work in strict accordance with
contract in the traditional way. This is very helpful in dispersing risks
and lowering the cost of investment. Table 2.9 summarizes cities which
employ the PPP form of financing successfully. Box 2.4 presents a
success story in the innovation of low carbon financing where the local
governments and private enterprises provide guarantee jointly.
Another example is the Infrastructure Credit Guarantee Fund
(ICGF) of South Korea, managed by the Korea Credit Guarantee Fund.
It aims to provide guarantee for low carbon projects, funded jointly
by public and private sectors. The fund of the ICGF comes from three
sources—the government fund, the guarantee fee, and the return of
investment. Guarantee for low carbon projects is capped at 100 billion
Won, or 200 billion Won in some special circumstances, with the
annual rate of guarantee standing at 1.5 per cent. The ICGF provides
effective support for the low carbon green city and overall green
7 OECD, Les Partenariats Public–Privé: Partager les Risqueset Optimiser les
Ressources.Paris: OECD 2008.
Chapter 2 Innovative Financing for Low Carbon Development 103
