The European Union (EU) has committed EUR 19.7 million to Climate Investor Two (CI2), the second facility under the management of Climate Fund Managers (CFM).
This investment in CI2 is channelled through the EU’s partner bank – the Dutch Development Bank (FMO) – and expands the EU’s support for sustainable infrastructure in climate change adaptation sectors across global emerging markets. CI2 is the second CFM-managed facility to receive a commitment from the EU, joining the renewable energy focused Climate Investor One (CI1) which also benefitted from EU support.
CI2, which also enjoys cornerstone support from the Government of the Netherlands via the Dutch Fund for Climate and Development (DFCD), is a blended finance facility offering an integrated funding solution for commercially viable water, sanitation and oceans projects in emerging markets. The focus of CI2 is to form a direct response to both the threat that climate change poses to water security, and the threat that improper wastewater management poses to ecosystems.
The EU’s commitment to the facility is allocated across the two underlying funds of CI2, the CI2 Development Fund (DF2) and the CI2 Construction Equity Fund (CEF2). Through its allocation to DF2, the EU will provide scarce development capital to facilitate a pipeline of bankable water, sanitation and oceans projects. In CEF2, the EU plays a key role in catalysing equity investors for the construction phase, where each EU dollar enables another four dollars of commercially sourced capital to be invested across the rest of the structure. In supporting CI2’s ability to catalyse commercial capital, the EU is enabling CI2 to achieve the scale needed to maximize its climate impact.
With its in-house engineering, financial, and environmental and social governance expertise, CFM takes an active role throughout all stages of a projects lifecycle. CI2 is expected to construct an additional 1.2 million m3 per day in water treatment capacity and 3.2 million m3 per day in waste water treatment capacity, respectively. As part of its water and sanitation investments, CI2 will also avoid greenhouse gas emissions. Using waste and wastewater as inputs for renewable energy generation, approximately 115 MW of renewable energy capacity and an additional 1,200 GWh of clean electricity will be provided annually. CFM estimates that CI2 will provide improved access to safe drinking water for approximately 8 million people, and reach an estimated 4 million people with improved access to treated wastewater in some of the world’s most vulnerable and polluted regions.
Andrew Johnstone, CEO of CFM, said “Over its lifetime, Climate Investor Two will both mitigate the causes of climate change and help humans adapt to its consequences, by investing in some of the most underserved and impactful sectors. We are very pleased to welcome the EU to the Climate Investor Two community. Their participation and support highlights the necessity to act now on all fronts against climate change.”
About The European Commission
The European Commission (EC) is the EU’s politically independent executive arm. The CI2 commitment originates from the EC’s Directorate-General for International Partnerships (DG INTPA), which is responsible for designing European international cooperation and development policy and delivering aid throughout the world. Under the Green Deal, the new framework for International Partnerships, and the new Neighbourhood, Development and International Cooperation Instrument (NDICI), the EU continues to be a leader in global climate and environmental action through international cooperation.
About Climate Fund Managers
CFM is a leading blended finance fund manager dedicated to securing a sustainable future through investing across global emerging markets. CFM has a long-term vision to structure cutting edge financing facilities around thematic areas of climate change mitigation and adaptation, including renewable energy, water, sanitation and oceans, sustainable land use and sustainable cities. Established in 2015, CFM is a joint venture between the Dutch development bank FMO and Sanlam InfraWorks – part of the Sanlam Group of South Africa.
Climate Investor Two (CI2) is a financing facility mandated to invest in water, sanitation and ocean infrastructure projects in emerging economies. CI2 will follow the proven ‘whole-of-life’ financing methodology of Climate Investor One (CI1), which has been acclaimed for its approach to risk mitigation and private sector capital mobilization. CI2 similarly makes use of public sector capital deployed alongside commercial funding. This commitment from the EU brings CI2‘s assets under management to EUR ~95 million. CI2 also enjoys cornerstone support from by the Dutch Fund for Climate and Development (DFCD). The consortium that manages the EUR 160 million DFCD also includes CFM, World Wide Fund for Nature Netherlands (WWF-NL), Netherlands Development Organisation (SNV) and Entrepreneurial Development Bank, FMO.
FMO is the Dutch entrepreneurial development bank. As a leading impact investor, FMO supports sustainable private sector growth in developing countries and emerging markets by investing in ambitious projects and entrepreneurs. FMO believes that a strong private sector leads to economic and social development and has a 50-year proven track-record of empowering people to employ their skills and improve their quality of life. FMO focuses on three sectors that have high development impact: financial institutions, energy, and agribusiness, food & water. With a committed portfolio of EUR 10.4 billion spanning over 80 countries, FMO is one of the larger bilateral private sector developments banks globally. For more information: please visit www.fmo.nl
About The DFCD
The Dutch Fund for Climate and Development (DFCD) enables private sector investment in projects aimed at climate adaptation and mitigation in developing countries. The Dutch Ministry of Foreign Affairs has made EUR 160 million available to increase the resilience of communities and ecosystems most vulnerable to climate change. The DFCD is managed by a pioneering consortium of Climate Fund Managers (CFM), World Wide Fund for Nature Netherlands (WWF-NL) and SNV Netherlands Development Organisation, led by the Dutch Entrepreneurial Development Bank, FMO. The DFCD forms an important additional instrument for the Dutch government’s efforts in contributing to the Paris Agreement and the Sustainable Development Goals (SDGs). For more information, please visit: https://www.thedfcd.com/