The role of the Climate Investment Funds in meeting investment needs

This report evaluates the role of the Climate Investment Funds (CIF) in the current climate finance landscape. It finds that the CIF provides a unique comparative advantage through its programmatic approach, high risk appetite for novel technologies, and strong partnership with Multilateral Development Banks. Despite the emergence of the Green Climate Fund, the report recommends maintaining the CIF to bridge investment gaps and maintain momentum for transformative climate activities in developing countries.

• The CIF has been a dominant provider of multilateral concessional climate finance, approving approximately 60% of the total finance committed by eight multilateral climate funds over the last ten years. It serves as the primary source of external concessional climate finance for its six implementing Multilateral Development Banks (MDBs), accounting for about 45% of the external concessional finance managed by these banks in 2013-2014.
• The CIF utilizes a unique programmatic national investment planning process that provides predictability and a strategic framework for investments. This differs from the competitive project-by-project approval processes used by other funds, which can hinder the development of first-of-a-kind projects and broader markets.
• The CIF demonstrates a high risk appetite, particularly for unproven technologies in low- and middle-income countries. It has allocated roughly 36% of its approved funding to risky technologies such as Concentrated Solar Power and geothermal energy, and has provided up to 55% of the international public finance for the riskiest early stages of geothermal projects.
• The CIF has allocated more finance to private sector investments in adaptation, forestry, and mitigation than any other multilateral climate fund, totaling USD 2.3 billion (28% of its financing). However, it has faced challenges attracting private investment in less developed countries and in the forestry and adaptation sectors due to policy framework weaknesses and geographic restrictions on set-aside funds.
• The CIF offers a diverse range of financial instruments that distinguish it from other concessional finance sources, including equity, guarantees, local currency, currency hedging tools, and subordinated or mezzanine debt. It is the only multilateral climate fund to provide reimbursable finance for adaptation and a dedicated grant mechanism for indigenous people to address deforestation.
• The partnership between the CIF and MDBs has fostered institutional learning, enabled MDBs to experiment with new financing approaches, and created a collaborative platform that enhances on-the-ground coordination and allows recipient countries to access varied MDB skillsets under a common framework.
• Significant barriers continue to impede climate investment in developing countries, specifically a lack of access to patient capital and various real or perceived risks, including technology, financing, first-mover, and sovereign risks.
• The report recommends keeping the CIF operational to avoid a global shortage of leveraged climate finance for transformative activities between the Paris Agreement and 2020, as the GCF may not yet be able to deliver the necessary scale and type of support in the short to medium term.

APA

Trabacchi, C., Brown, J., Boyd, R., Wang, D., & Falzon, J. (2016). The role of the Climate Investment Funds in meeting investment needs. Climate Policy Initiative. https://www.climatepolicyinitiative.org/wp-content/uploads/2016/06/The-role-of-the-Climate-Investment-Funds-in-meeting-investment-needs.pdf

Chicago

Trabacchi, Chiara, Jessica Brown, Rodney Boyd, David Wang, and James Falzon. The role of the Climate Investment Funds in meeting investment needs. Climate Policy Initiative, 2016. https://www.climatepolicyinitiative.org/wp-content/uploads/2016/06/The-role-of-the-Climate-Investment-Funds-in-meeting-investment-needs.pdf.

Wikipedia

{{cite report |last1=Trabacchi |first1=Chiara |last2=Brown |first2=Jessica |last3=Boyd |first3=Rodney |last4=Wang |first4=David |last5=Falzon |first5=James |title=The role of the Climate Investment Funds in meeting investment needs |publisher=Climate Policy Initiative |date=June 2016 |url=https://www.climatepolicyinitiative.org/wp-content/uploads/2016/06/The-role-of-the-Climate-Investment-Funds-in-meeting-investment-needs.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{trabacchi2016role, author = {Trabacchi, Chiara and Brown, Jessica and Boyd, Rodney and Wang, David and Falzon, James}, title = {{The role of the Climate Investment Funds in meeting investment needs}}, institution = {Climate Policy Initiative}, year = {2016}, month = jun, url = {https://www.climatepolicyinitiative.org/wp-content/uploads/2016/06/The-role-of-the-Climate-Investment-Funds-in-meeting-investment-needs.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }