Dubai, UAE – December 4, 2023 – The Catalytic Climate Finance Facility (CC Facility), a partnership between Climate Policy Initiative (CPI) and Convergence, today announced its first class of six market-ready blended finance vehicles. The CC Facility will grant the selected class USD 2.4 million to test, structure, launch, and expand solutions.
Grantees also receive customized technical assistance over 12 to 18 months to help accelerate the market roll-out of their blended climate finance solutions.
“COP28 is the perfect stage to introduce the next generation of innovative blended finance solutions addressing climate change, as we push for more ambitious climate finance goals in Dubai,” said Convergence CEO Joan Larrea. “Each of these six vehicles can scale up quickly and will benefit from the flexible package of grant funding and dedicated acceleration services that the CC Facility provides.”
The selected vehicles have undergone a rigorous selection process, emerging from a pool of 276 submissions. These vehicles offer a wide range of climate finance solutions to address key mitigation and adaptation barriers in Sub-Saharan Africa and Latin America, addressing deforestation, building smallholder farmers resilience, improving access to finance for greenfield climate-aligned projects, accelerating electrification in rural areas, and investing in climate-aligned essential infrastructure.
“Our team will work to accelerate the market roll-out of these solutions to overcome market fragmentation and other key obstacles,” said Barbara Buchner, CPI’s Global Managing Director. “The CC Facility provides a collaborative space for the public, private, and philanthropic sectors to unlock high-impact structures that can be standardized and replicated.”
With funding from three anchor donors—Bill & Melinda Gates Foundation, Global Affairs Canada, and Australia’s Department of Foreign Affairs and Trade—the CC Facility targets one of the main barriers to developing a climate blended finance idea: the acceleration stage, when solutions face a critical valley of death as they try to scale to broader market implementation. Following the selection of this first class of blended finance vehicles, the CC Facility will open for its second cycle of applications starting March 20, 2024.
“We know that public investment alone cannot provide all of the financing needed to tackle the climate crisis. Canada is proud to work with partners like Convergence to mobilize additional investments to support developing countries in their transition to low-carbon and climate resilient economies. With the selection of these first six blended finance vehicles, Canada sees great potential for mobilization of new finance into under-funded sectors in Latin America and Sub-Saharan Africa. We would like to extend our congratulations to this first class of grantees,” said Cam Do, Director General of Innovative and Climate Finance, Global Affairs Canada.
Introducing the Vehicles
Acre Export Finance Fund I: Acre addresses the financing gap in the export finance market in Africa which prevents the closing of bankable climate-aligned essential infrastructure projects. The fund is a private debt fund investing in sovereign-backed climate-aligned essential infrastructure in Africa across four impact themes: renewable power, healthy food and water scarcity, sustainable cities, and green transportation.
Amazonia Impact Fund I: Through impact-linked debt financing and technical assistance, Amazonia Impact Ventures (AIV) will support indigenous and Amazon-based organizations. The loans have sustainability targets that incentivise biodiversity conservation and forest restoration as well as improving livelihoods. The fund currently operates in the Amazonia region of Peru, Ecuador and Colombia with the intention of expanding to Brazil in the future.
Client Credit Enhancement Guarantee Fund (CCEF): Ignite Power designed the CCEF to accelerate electrification for 600 million people living in rural sub-Saharan Africa. CCEF, a smart, rolling guarantee mechanism, addresses irregular payment patterns, including defaults, to mitigate end-client risk in PAYGO solar projects.
Climate Collateral Alliance (CCA): CCA is a USD 75 million initiative to mobilize blended capital to smallholder farmers and agMSMEs implementing climate smart activities. CCA is an opportunity-led blended investment scheme combining commercial impact capital, credit support, and technical assistance targeting financial institutions in sub-Saharan Africa.
Smallholder Resilience Ventures (SRV): One Acre Fund launched SRV to fill the agricultural financing gap in Africa, enabling SMEs to scale and provide guaranteed premium markets to smallholders growing climate-friendly crops. SRV aims to strengthen value chains and increase farmer income and climate resilience — all while creating investable SME opportunities.
Sustainable Guaranty Solutions (SGS): SGS is designed as a guarantee mechanism that consolidates all the underlying risk mitigation components of a greenfield project into a single completion guarantee. The SGS concept will be implemented through a new company, managed by Albion Capital, designed to underwrite all the construction risks of eligible/approved greenfield projects.
About the Catalytic Climate Finance Facility
The Catalytic Climate Finance Facility (CC Facility) accelerates the implementation of high-impact, ready-to-scale financial structures through a suite of services that include grant funding, technical support, and a market-building learning hub. The CC Facility fills a market gap and reduces market fragmentation to mobilize private capital for climate action in developing economies. The CC Facility is a partnership between Climate Policy Initiative and Convergence.
The CC Facility has raised USD 13 million to date and is fundraising for a second round of USD 10 million by September 2024 as we move toward our goal of reaching USD 100 million in size over the next few years.
Convergence is the global network for blended finance. On top of market acceleration through its Design Funding program, Convergence generates blended finance data, intelligence, and deal flow to increase private sector investment in developing countries. Convergence’s global membership includes over 160 public, private, and philanthropic investors as well as sponsors of transactions and funds.
Convergence’s Design Funding Program operates as a market acceleration tool providing
early-stage capital to support blended finance solutions in frontier markets and nascent sectors to accelerate the number of investible transactions in market targeting SDGs.
About Climate Policy Initiative
CPI is an analysis and advisory organization with deep expertise in finance and policy. Our mission is to help governments, businesses, and financial institutions drive economic growth while addressing climate change. CPI has six offices around the world in Brazil, India, Indonesia, the United Kingdom, and the United States.
CPI serves as the Secretariat for the Global Innovation Lab for Climate Finance (the Lab), an incubator program that develops innovative financial mechanisms to drive private investments into climate change mitigation and adaptation in developing economies.
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Climate Policy Initiative
Climate Policy Initiative