- Cornerstone commitments from MUFG, FinDev Canada and the Green Climate Fund
- Long-term private credit prioritising adaptation projects in climate-vulnerable markets
- Aims to benefit 19 million people, support 11,000 jobs, avoid 30 million tonnes of CO₂ emissions annually and enhance the resilience of 5,000 km² of natural resources
The Hague, 3 November 2025: Climate Fund Managers (CFM), MUFG Bank Ltd (MUFG), FinDev Canada and the Green Climate Fund (GCF) today announced the first close of the GAIA Climate Loan Fund (GAIA) at USD 600 million. GAIA will provide loans to predominantly climate adaptation projects in markets most severely impacted by, and least equipped to respond to, climate change – helping to close the estimated ~USD 300 billion annual adaptation finance gap¹. The fund targets a total size of USD 1.48 billion, with final close anticipated in 2027.
Co-founded by MUFG, Japan’s largest financial group, FinDev Canada, Canada’s development finance institution, and the Green Climate Fund (GCF), the world’s largest dedicated climate fund, GAIA is managed by Climate Fund Managers (CFM), a climate-focused blended finance investment manager, with delivery supported by Pollination, the global advisory firm focused on climate and nature.
GAIA marks a new approach to climate finance by providing long-term loans to sovereign, sub-sovereign, quasi-sovereign and state-owned entities, including municipalities, development banks and state-owned utilities, across 19 emerging and developing countries². A minimum of 25% of commitments will be deployed in Least Developed Countries (LDCs) and Small Island Developing States (SIDS), where financing needs are greatest. At least 70% of capital will be dedicated to climate adaptation – such as sustainable agriculture, water management, ecosystem resilience and climate-smart infrastructure – with up to 30% supporting mitigation, including renewable energy and low-carbon transport.
Upon full deployment, GAIA aims to benefit an estimated 19 million people and create more than 11,000 permanent jobs; avoid ~30 million tonnes of CO₂ equivalent emissions per year, deliver ~700 MW of renewable energy capacity and ~36,000 GWh of clean generation annually, and improve the climate resilience of over 5,000 km² of natural resources.
GAIA uses a blended finance structure that combines public and private investment, with public funding deployed strategically to reduce risk and mobilise private capital. The facility is structured with a junior tranche funded by concessional partners and a senior tranche for commercial investors, alongside a dedicated FX facility for local currency lending and a parallel Technical Assistance Facility to strengthen project preparation, ESG readiness, performance and impact outcomes.
Cornerstone commitments were secured from MUFG (senior capital), FinDev Canada (senior and junior capital) and the Green Climate Fund (junior capital). FinDev Canada has also provided additional grant funding for both the FX and TA facilities, while MUFG serves as origination partner for the fund.
While climate change is a global challenge, its impacts fall most heavily on developing and emerging economies, where communities often lack the infrastructure and resources to withstand events such as floods, droughts and extreme heat. Projects that build climate resilience have traditionally relied on public funding, which is constrained by limited budgets and competing priorities, and are often overlooked by commercial investors. By providing private credit to public and quasi-public entities, GAIA aims to help tackle one of the biggest barriers in the adaptation space: the shortage of financing for infrastructure most exposed to climate risk. This model proves that blended finance can unlock institutional capital for sectors critical to resilience, creating a pathway for sustainable development where it is needed most.
Lori Kerr, Chief Executive Officer of FinDev Canada, said: “GAIA demonstrates the power of partnership in advancing climate action and inclusion in emerging markets and developing economies. By combining commercial and concessional capital, alongside grant funding for technical assistance and FX facilities, FinDev Canada is accelerating the mobilisation of critical investment and enabling local-currency lending where it is needed most, maximising the impact of every development dollar.”
Christopher Marks, Head of Growth Markets, Innovative Finance & Portfolio Solutions, EMEA, MUFG, said: “Achieving first close of GAIA is a major milestone in our ambition to help bridge the climate finance gap through an innovative public-private platform. As origination partner, MUFG will leverage its global network to source high-impact projects that improve lives and livelihoods in developing and emerging economies.”
The Executive Director of the Green Climate Fund, Mafalda Duarte, said: “GAIA stands to show that adaptation in the world’s most climate-vulnerable regions can yield returns for global investors and communities facing the harshest impacts of the climate crisis. GCF is committing up to $150 million as a first-loss investor to anchor a platform set to mobilise nearly ten times that amount for resilience across Africa, Asia, and Latin America. This first-of-its-kind initiative brings private investment to sectors and geographies long shut out of markets, and it proves that smart public-private design can turn perceived risk into real-world opportunity.”
Andrew Johnstone, CEO of Climate Fund Managers, said: “GAIA marks an important step in CFM’s evolution – extending our blended finance model beyond private equity into private credit for the first time, enabling us to provide long-term funding for adaptation projects that build the resilience of climate-vulnerable communities. The first close of GAIA builds on the success of our Climate Investor One, Two and Three equity funds, which have mobilised investment in more than 50 climate-focused projects across emerging markets.”
GAIA contributes to seven of the UN Sustainable Development Goals: (5) Gender Equality, (6) Clean Water and Sanitation, (7) Affordable and Clean Energy, (9) Industry, Innovation and Infrastructure, (11) Sustainable Cities and Communities, (13) Climate Action and (17) Partnerships for the Goals.
