The role of the Climate Investment Funds in the changed context of climate finance

This report by the Climate Policy Initiative evaluates the role of the Climate Investment Funds (CIF) within the evolving global climate finance landscape. It assesses the CIF's comparative advantage against other multilateral funds, such as the Green Climate Fund (GCF) and the Global Environment Facility (GEF), and recommends maintaining the CIF's operations to bridge investment gaps and support the implementation of Intended Nationally Determined Contributions (INDCs).

• The CIF has been a dominant provider of multilateral concessional climate finance, acting as the largest external source for its six implementing Multilateral Development Banks (MDBs). In 2013-2014, it provided approximately 45% of the external concessional finance managed by MDBs and approved about 60% of the total finance committed by eight multilateral climate funds over a ten-year period.
• The CIF's programmatic approach is a unique feature that provides predictability and a strategic framework for national investment planning, which is particularly beneficial for complex, first-of-a-kind projects. This contrasts with the competitive project-by-project approval processes used by other funds, which can hinder market and project development.
• The CIF demonstrates a higher risk appetite than other funds, allocating approximately 36% of its approved funding to risky or unproven technologies, such as Concentrated Solar Power and geothermal, in low- and middle-income countries. It has provided up to 55% of the international public finance for the riskiest early stages of geothermal projects.
• The CIF has led other multilateral climate funds in allocating finance to private sector investments in adaptation, forestry, and mitigation, dedicating 28% of its financing (USD 2.3 billion) to this purpose. However, it has faced challenges attracting private investment in less developed countries and specifically within the forestry and adaptation sectors due to policy weaknesses and geographic restrictions.
• The CIF offers a diverse range of financial instruments that differentiate it from other concessional sources, including equity, guarantees, local currency hedging tools, and subordinated or mezzanine debt. It is the only climate fund to provide reimbursable finance for adaptation and a dedicated grant mechanism for indigenous people regarding deforestation.
• The report recommends that the CIF remain operational to avoid a global shortage of leveraged climate finance between the Paris Agreement and 2020, especially while the GCF is still scaling up. It suggests the CIF and GCF work complementarily, such as by using GCF funds for projects developed under CIF investment plans.

APA

Climate Policy Initiative (2016). The role of the Climate Investment Funds in the changed context of climate finance. https://www.climatepolicyinitiative.org/publication/role-climate-investment-funds-meeting-investment/

Chicago

Climate Policy Initiative. The role of the Climate Investment Funds in the changed context of climate finance. 2016. https://www.climatepolicyinitiative.org/publication/role-climate-investment-funds-meeting-investment/.

Wikipedia

{{cite report |author=Climate Policy Initiative |title=The role of the Climate Investment Funds in the changed context of climate finance |date=3 June 2016 |url=https://www.climatepolicyinitiative.org/publication/role-climate-investment-funds-meeting-investment/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{climatepolicyinitiative2016role, author = {{Climate Policy Initiative}}, title = {{The role of the Climate Investment Funds in the changed context of climate finance}}, institution = {Climate Policy Initiative}, year = {2016}, month = jun, url = {https://www.climatepolicyinitiative.org/publication/role-climate-investment-funds-meeting-investment/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }