/Climate Investment Funds

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

There are two funding windows under CIF:

• Clean Technology Fund (CTF): The CTF trust fund of CIF 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 trust fund of CIF serves as an overarching framework supporting seven targeted programs with dedicated funding to pilot new approaches that have the potential for scaled-up, transformational action aimed at a specific climate change challenge or sector response.

ADB, as a CIF partner MDB, 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 (NPC), and Industry Decarbonization. Under ACT, ADB is supporting the governments of India, Indonesia, and the Philippines to prepare their respective investment plans, each with an indicative allocation of up to $500 million. The technical assistance (TA) project Accelerating the Clean Energy Transition in Southeast Asia supports the ACT program by helping the Government of Indonesia advance its transition to clean energy and align with the Paris Agreement. ADB is engaging with Fiji to prepare its REI investment plan with an indicative allocation of up to $70 million. 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. ADB is also assisting Fiji in preparing another investment plan with an indicative allocation of up to $30 million under the NPC program. These investment plans will be presented for review and approval by the Trust Fund Committees of the CTF and SCF in 2023. Following the approval of these country investment plans, the ADB operations will develop the respective climate change projects in these countries. Therefore, ADB’s engagement with the countries at the upstream strategic level help developing member countries (DMCs) achieve transformational impact on climate change through these projects.

In 2022, CIF and ADB notably worked together on programmatic climate financing initiatives. CIF cofinanced six projects on several key efforts on climate change adaptation and mitigation. Three of these projects are under CIF’s Technical Assistance Facility (TAF), a special initiative to accelerate downstream clean-energy and climate-resilient investments in client countries. Under ADB CIF-TAF, the projects include the (i) Accelerating Climate Finance Investments through the Financial Sector in Bangladesh and Nepal, which supports upstream market development work to diagnose barriers for investment in renewable energy and energy efficiency; (ii) Building Institutional Capacity: Delivering Climate Solutions under Operational Priority 3 of Strategy 2030, a regional project that supports all ADB DMCs by providing technical support and policy advice on long-term low greenhouse gas emission strategies, climate finance, and ensuring national policies are aligned with the goals of the Paris Agreement, and (iii) the program to Support Climate Resilient Investment Pathways in the Pacific, which allows ADB to scale up its investments in climate change adaptation for all 14 Pacific DMCs. The sixth ADB project cofinanced by CIF in 2022 is the Energy Transition Sector Development Program Subprogram 1 in Cambodia, which will provide comprehensive support to the government’s energy transformation agenda.