Climate Development and Finance Facility: Pilot Proposal and Implementation Plan

The Climate Development and Finance Facility (the Facility) is a proposed investment structure designed to overcome financing barriers for renewable energy projects in developing countries. It integrates three stages of support: a Development Fund for early-stage due diligence, a Construction Fund that uses equity to finance construction costs and avoid expensive early-stage debt, and a Refinancing Fund to attract institutional investors once projects are operational. The pilot targets projects between 25-75 MW in specific low- and lower-middle income countries across Africa, Asia, and Latin America. To launch, the Facility requires USD 150 million in donor capital, which is projected to mobilize USD 2 billion in private capital, install approximately 300 MW of clean energy, and reduce annual CO2 emissions by around 600 kt.

• The Facility addresses financing challenges in developing countries by combining three funds: a Development Fund for early-stage technical, environmental, and social due diligence; a Construction Fund that uses equity to finance construction costs to avoid high debt costs; 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 cost of USD 80-100 million and a capacity of 25-75 MW.
• The Facility requires USD 150 million in government donor capital to mobilize at least USD 2 billion in private or commercial capital, with the goal of installing approximately 300 MW of clean energy and reducing annual CO2 emissions by about 600 kt.
• The Facility is projected to reduce the levelised cost of electricity (LCOE) for renewable projects in target countries by between 9% and 18% compared to a business-as-usual case.
• The pilot focuses on thirteen proxy markets in Sub-Saharan Africa, Southeast Asia, and Latin America, with a planned investment split of 70/30 in favor of low- and lower-middle income countries.
• Stress testing of the capital structure shows that returns for the Refinancing Fund and the senior tranche of the Construction Fund remain robust even in downside scenarios involving project underperformance.

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/2015/04/Climate-Development-and-Finance-Facility-Lab-Phase-3-Analysis-Summary.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/2015/04/Climate-Development-and-Finance-Facility-Lab-Phase-3-Analysis-Summary.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/2015/04/Climate-Development-and-Finance-Facility-Lab-Phase-3-Analysis-Summary.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/2015/04/Climate-Development-and-Finance-Facility-Lab-Phase-3-Analysis-Summary.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }