Climate Investment Funds

Established in 2008 at the request of G8 and G20 countries, the Climate Investment Funds (CIF) aims to help developing countries shift to low-carbon technologies and promote climate-resilient development. CIF works with multilateral development banks: ADB, the African Development Bank, the European Bank for Reconstruction and Development, the Inter-American Development Bank, the World Bank, and the International Finance Corporation.

There are two funding windows under CIF.

Clean Technology Fund (CTF): The CTF provides resources to scale up low-carbon technologies with significant potential for long-term savings in greenhouse gas emissions, such as renewable energy, energy efficiency, and clean transport.

Strategic Climate Fund (SCF): The SCF serves as an overarching framework supporting seven targeted programs with dedicated funding to pilot new approaches with the potential for scaled-up, transformational action aimed at a specific climate change challenge or sector response.

ADB, as a CIF partner multilateral development bank, is also responsible for strategic engagement in the design and development of new programs under CIF: the Accelerating Coal Transition Program (ACT), Renewable Energy Integration Program (REI), Nature People and Climate, and Industry Decarbonization. Under ACT, ADB supported the Government of Indonesia in finalizing its investment plan, which was approved by the CTF Trust Fund Committee (TFC) for $500 million on 16 June 2023. ADB also supported the Government of the Philippines in developing its investment plan, which the CTF TFC approved in principle on 8 November 2023. The technical assistance (TA) project Accelerating the Clean Energy Transition in Southeast Asia supports the ACT program by helping the governments of Indonesia and the Philippines advance their transition to clean energy and align with the Paris Agreement.

ADB also engaged with Fiji to finalize its REI investment plan, which was approved by the Global Climate Action Program (GCAP) subcommittee on 10 November 2023. The GCAP subcommittee allocated $30.5 million in REI funding to support a modular approach to be determined by the investment plan’s indicative pipeline. Another TA project, Preparing Clean and Renewable Energy Investments in the Pacific, intends to remove market barriers to energy investments in Fiji as part of ADB’s Pacific Program.

Further to the REI program, ADB is working with the Government of India to prepare its REI investment plan with an indicative allocation of up to $70 million. ADB is also assisting Fiji in preparing another investment plan with an indicative allocation of up to $30 million under the Nature, People and Climate program. These investment plans will be presented for review and approval by the Trust Fund Committees (TFC) of the CTF and the Strategic Climate Fund (SCF) in April 2024. ADB’s engagement at the upstream strategic level helps developing member countries achieve a transformational impact on climate change through these projects.

In 2023, ADB’s Climate Change, Resilience, and Environment Cluster actively participated and contributed to three TFC meetings of the CTF and SCF, which happened in Washington, DC, on 31 January–2 February and 6–10 November, and in Brazil on 25–30 June. The topics discussed included the implementation of the Climate Investment Funds (CIF) Capital Market Mechanism, the grant allocation of the CTF, and future CIF governance enhancements. As a representative of the regional development banks, ADB shall continue supporting the next phase of the CIF governance and operational review process.

Throughout 2023, ADB has actively participated in developing and designing CIF’s proposed Climate Resilience Program. ADB has also co-organized a COP28 side event for this topic to discuss the critical role of the partnership of multilateral development banks through CIF in spearheading a new generation of adaptation finance.

Highlights

Sovereign Cofinancing. In 2023, CIF committed $16.8 million in cofinancing for three technical assistance and one investment project. Of these, $10 million in loans and $5 million in grants were to support Maldives in improving energy security by increasing the use of renewable energy and promoting energy efficiency.