Climate Funds: Private Sector Observer Roles
There are now over one hundred climate funds globally that are dedicated to financing climate mitigation and adaptation activities, mostly in emerging markets. They are predominantly funded by donor governments, but are increasingly looking to leverage private capital in order to mobilise private investment in their projects and undertakings.
Understanding and accessing the complex world of climate funds can be challenging for private sector participants as information on their policies and activities is not always clearly available, and there may be multiple layers of bureaucracy to navigate. Our Active Private Sector Observer status at some of the most influential global climate funds grants us privileged access to participate at their Board meetings and play a vital role in presenting private sector insight to inform Board decision making.
CMIA is one of a limited number of business organisations which have been granted Active Private Sector Observer (APSO) status at some of the most influential global climate funds, including the World Bank’s Climate Investment Funds (CIF) and Forest Carbon Partnership Facility (FCPF). CMIA has held the developed markets APSO seat at the world’s biggest climate fund, the Green Climate Fund (GCF), from its inception. The GCF is committed to investing US$100 billion annually from 2020.
Green Climate Fund
The Green Climate Fund (GCF) was established by the UN in 2010 and is the world’s only financial institution devoted solely to climate finance in the developing world. CMIA holds one of two APSO seats on the UN Green Climate Fund Board. As such, CMIA leads a global coalition of private sector players who are driven to mobilise private finance through the GCF, ensuring that their voice is heard by the GCF board to facilitate the design of effective finance and market solutions to combat climate change.
Climate Investment Funds
The $8.3 billion Climate Investment Funds (CIF) is providing 72 developing and middle income countries with urgently needed resources to manage the challenges of climate change and reduce greenhouse gas emissions. The CIF is comprised of four programs:
- $5.6 billion Clean Technology Fund (CTF)
- The $1.2 billion Pilot Program for Climate Resilience (PPCR)
- The $780 million Scaling Up Renewable Energy in Low Income Countries Program (SREP)
- The $775 million Forest Investment Program (FIP)
CMIA is the APSO at the FIP, a funding window of the CIF, providing indispensable direct investments to benefit forests, development and climate. FIP grant and low-interest loans, channelled through partner multilateral development banks (MDBs), are empowering countries to address the drivers of deforestation and forest degradation both inside and outside of the forest sector to achieve the triple win of being good for forests, good for development and good for the climate.
Forest Carbon Partnership Facility
The Forest Carbon Partnership Facility (FCPF) assists developing countries in their efforts to reduce emissions from deforestation and forest degradation, as well as fostering conservation, sustainable management of forests, and enhancement of forest carbon stocks. All these activities are commonly referred to as “REDD+”. The FCPF is a multi-stakeholder partnership including 47 developing forest countries. There are 17 financial contributors comprised of developed countries, private sector participants and NGO and the Fund capital is $1.1 billion. This is split between two separate but complimentary funding mechanisms:
- $370 million for the Readiness Fund
- $740 million for the Carbon Fund
44 countries signed Readiness Fund grants and 19 countries are in the Carbon Fund pipeline.