We believe that sustainable investing and profitability go hand in hand. Our long-term vision is to play a transformative role in the energy, water & oceans, sanitation, landscape and sustainable cities sectors. To realise this vision, we are creating and developing a series of financing facilities, each focussed on a vital element of climate change mitigation or adaptation.
Our initial focus has been on managing Climate Investor One, with a mandate to finance renewable energy projects in emerging markets. With the momentum gained from CIO we are headed towards Climate Investor Two, which will broaden our focus to include the climate adaptation sectors of water, oceans and sanitation.
This programme is funded
by the European Union
Climate Investor One (CI1) is a blended finance facility delivering renewable energy infrastructure projects in emerging markets with a technological focus on:
- Onshore and near-shore wind
- Solar PV
- Run-of-river Hydro.
CI1 employs a mix of public and private-sector funding as well as commitments from development finance institutions (DFIs) whilst making use of an export credit agency (ECA) guarantee, all in mutually beneficial and complementary ways.
Public-sector donors fund the development stage of the projects, which typically cannot be financed by private-sector investors. Donors also play a key role in mobilizing private-sector capital during the construction stage of the project, where risks are better understood and financial returns can be achieved. CIO donors include the European Union (EU), the Green Climate Fund (GCF), USAID via PowerAfrica, the Nordic Development Fund (NDF) and the Directorate General for International Cooperation (DGIS) within the Ministry of Foreign Affairs of the Netherlands.
CI1 offers financing for the entire lifecycle of a project to developers, from design to construction and into operations through a post-construction refinancing.
To achieve this, CI1 comprises three funds, each targeted at a different project stage:
THE DEVELOPMENT FUND
The Development Fund (USD 50 million) funds up to 50% of the planning and development stage of a project. It offers both technical assistance and financing.
CONSTRUCTION EQUITY FUND
The Construction Equity Fund (USD 800 million) funds the construction phase of a project, financing up to 75% of the construction funding requirement through equity, thereby eliminating the traditional need for debt during construction.
Operating as a post-construction debt facility, the Refinancing Fund, yet to be established, will look to provide long-term senior debt to a project once it is fully operational.
The foundations for Climate Investor Two (CI2) are already in place. In May 2019 a consortium formed of Dutch development bank FMO, SNV Netherlands Development Organisation (SNV), World Wide Fund for Nature (WWF-NL) and Climate Fund Managers (CFM) won the tender to manage the €160 million Dutch Fund for Climate and Development (DFCD), awarded by the Dutch Government. This pioneering partnership of financial institutions and NGOs aims to help developing countries build climate-resilient economies.
Climate Investor Two will manage €75 million of the total DFCD for cornerstone investment.
In keeping with our long term vision, CI2 will focus on water, oceans and sanitation sub-sectors, including:
- Municipal and industrial water and wastewater supply
- Bulk water supply
- Waste and wastewater to energy
- Riverine and coastal ecosystem management and protection
CI2 will replicate the proven fund structure of CI1 by providing financing for every stage of a project.