In Washington: Roger Morier (202) 473 5675
Karolina Ordon (202) 458 5971
WASHINGTON, July 1, 2008 – The World Bank Board of Executive Directors today gave formal approval to the creation of the Climate Investment Funds (CIF), a pair of international investment instruments, designed to provide interim, scaled-up funding to help developing countries in their efforts to mitigate rises in greenhouse gas (GHG) emissions and adapt to climate change.
Two trust funds will be created under the Climate Investment Funds; total investments, based on preliminary indications from donor countries, are targeted to reach US$5 billion.
One of the funds, the Clean Technology Fund, will provide new, large-scale financial resources to invest in projects and programs in developing countries which contribute to the demonstration, deployment, and transfer of low-carbon technologies. The projects or programs must have a significant potential for long-term greenhouse gas savings.
The second fund, the Strategic Climate Fund, will be broader and more flexible in scope and will serve as an overarching fund for various programs to test innovative approaches to climate change. The first such program is aimed at increasing climate resilience in developing countries.
“The Bali Action Plan on Climate Change calls for the international community to do more in providing financial resources and investments that support action on mitigation, adaptation, and technology cooperation,” said World Bank Group President Robert B. Zoellick. “These Climate Investment Funds are part of the World Bank Group’s expanded response to the challenge of climate change. They are a key element in our six-point program, specifically to provide innovative and concessional financing to facilitate both public and private sector investments in low-carbon and adaptation projects.”
“We think the CIF will have a significant impact in generating even more financing for climate action,” said Zoellick, “but also in demonstrating new approaches to address the current and future effects of climate change. These approaches will range from agriculture to water management, from transport to urban development, and from biodiversity to energy access.”
The Climate Investment Funds were designed through inclusive and extensive consultations in support of the Bali Action Plan over the past six months. Consultations took place with potential donors and recipients, the United Nations family, other multilateral development banks (MDBs), civil society organizations, and the private sector. At a final design meeting, held in Potsdam, Germany, on May 21-22, 2008, representatives from some 40 developing and industrialized countries agreed to create the CIF.
In designing the funds, participants have taken care to recognize the primacy of the United Nations Framework Convention on Climate Change (UNFCCC) in global climate negotiations, and to support those negotiations. All funds and programs under the CIF have a sunset clause in order not to prejudice on-going UNFCCC deliberations regarding the future of the climate change regime.
“With the Climate Investment Funds,” said Katherine Sierra, World Bank Vice President of Sustainable Development, “we can start making progress today by supporting innovative and pioneering initiatives, thus creating a new body of experiences and knowledge that will inform the ongoing negotiations on the future of the climate change regime.”
The funds, to be disbursed as grants, highly concessional loans, and/or risk mitigation instruments, will be administered through the multilateral development banks and the World Bank Group for quick and flexible implementation of country-led programs and investments.
Developing countries will have an equal voice in the governance structures of the funds, and decisions on the use of funds will be made by consensus. An annual Partnership Forum will be held to provide a venue for talks on the strategic directions, results, and impacts of the CIF.
The Partnership Forum is designed to be a broad-based meeting of stakeholders, including donor and recipient countries, MDBs, the United Nations and its related agencies, GEF, UNFCCC, the Adaptation Fund, bilateral development agencies, NGOs, private sector entities, and scientific and technical experts.
As a result of the World Bank Board of Executive Directors’ approval, it is expected that the first Partnership Forum for the Climate Investment Funds will take place in September, 2008. Approval of funding for initial projects or programs is expected before the end of 2008.