Search Climate Insights Directory

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 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 Long-Term FX Risk Management instrument, developed by The Lab in collaboration with the International Finance Corporation (IFC) and The Currency Exchange Fund Management Company (TIM), aims to unlock climate-relevant investments in emerging markets. By offering long-term fixed and inflation-linked cross-currency swaps, interest rate swaps, and local currency loans, the instrument addresses the financial uncertainty caused by currency mismatches in capital-intensive clean infrastructure projects. A proposed pilot requires USD 250 million in donor risk capital to provide up to USD 1 billion in hedging capacity, potentially supporting USD 1.5 billion in clean investment projects and reducing annual greenhouse gas emissions by 1.7 MtCO2.