Climate Development and Finance Facility: Pilot Proposal and Implementation Plan

The Climate Development and Finance Facility (CDFF) is designed to address financing gaps for wind, solar, and hydro projects in low- and lower-middle income countries. It utilizes a three-stage approach: a Development Fund for early-stage due diligence, a Construction Fund that uses equity to avoid high-cost construction debt, and a Refinancing Fund to attract institutional investors once projects are operational. A pilot implementation requires USD 150 million in donor capital to mobilize USD 1.88 billion in private capital, aiming to install approximately 300 MW of clean energy and reduce annual CO2 emissions by around 600 ktCO2.

• The Facility addresses financing challenges in developing countries—specifically lack of expertise, prolonged negotiations, and high construction debt costs—by combining three innovative investment stages: a Development Fund for technical and social due diligence, a Construction Fund to finance construction costs with equity, and a Refinancing Fund to raise lower-cost debt after projects are de-risked.
• The pilot phase targets renewable energy projects (wind, solar, and hydro) with a total investment between USD 80-100 million and a capacity of 25-75 MW. The geographic focus for the pilot includes Rwanda, Kenya, Nigeria, Indonesia, Philippines, India, Nicaragua, Guatemala, Costa Rica, and Panama.
• The Facility requires USD 150 million in donor capital to launch. This public funding is projected to mobilize USD 1.88 billion of private or commercial rate capital, install approximately 300 MW of clean energy, and reduce annual CO2 emissions by around 600 ktCO2.
• Financial modeling indicates that the Facility can reduce the levelised cost of electricity (LCOE) for renewable projects by between 9% and 21% in target countries, depending on the technology used.
• Target returns for the Construction Fund are aligned with commercial expectations, with a 15% target annual return for the subordinate tranche and an 8% target return for the senior tranche. The Refinancing Fund has a lower target return of approximately 4%.
• Stress-testing of the financial model shows that returns for the Refinancing Fund and the senior tranche of the Construction Fund remain robust even under severe downside scenarios, although subordinate and first-loss tranches are most affected by shocks.

APA

Oliver, P., & Frisari, G. (2015). Climate Development and Finance Facility: Pilot Proposal and Implementation Plan. Climate Policy Initiative. https://www.climatepolicyinitiative.org/wp-content/uploads/2020/07/CDFF-Pilot-Proposal-and-Implementation-Plan.pdf

Chicago

Oliver, Padraig, and Gianleo Frisari. Climate Development and Finance Facility: Pilot Proposal and Implementation Plan. Climate Policy Initiative, 2015. https://www.climatepolicyinitiative.org/wp-content/uploads/2020/07/CDFF-Pilot-Proposal-and-Implementation-Plan.pdf.

Wikipedia

{{cite report |last1=Oliver |first1=Padraig |last2=Frisari |first2=Gianleo |title=Climate Development and Finance Facility: Pilot Proposal and Implementation Plan |publisher=Climate Policy Initiative |date=April 2015 |url=https://www.climatepolicyinitiative.org/wp-content/uploads/2020/07/CDFF-Pilot-Proposal-and-Implementation-Plan.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{oliver2015climate, author = {Oliver, Padraig and Frisari, Gianleo}, title = {{Climate Development and Finance Facility: Pilot Proposal and Implementation Plan}}, institution = {Climate Policy Initiative}, year = {2015}, month = apr, url = {https://www.climatepolicyinitiative.org/wp-content/uploads/2020/07/CDFF-Pilot-Proposal-and-Implementation-Plan.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }