Yemisi Izuora
The Dutch Development Bank (FMO) has successfully achieved the first closing of $412 million Climate Investor One (CIO) fund.
“Climate Investor One (CIO) is the inaugural financing facility launched by Climate Fund Managers (CFM), of an intended series of climate finance initiatives designed to combat the detrimental effects of unmitigated climate change,” CFM said in a statement.
The fund was designed to facilitate developments in renewable energy projects in developing and emerging markets – Africa, Asia and Latin America – focusing on solar, wind and run-of-river hydropower projects in the designated regions.
CFM explained that CIO will help “mobilise private sector financing at scale supported by catalytic public sector donor funding.”
The Fund is a joint effort between FMO and Phoenix InfraWorks, South African infrastructure development and fund management specialists, in association with Sanlam Investments Holdings.
“CIO seeks to simplify the manner in which capital is deployed and reduces complexity by delivering an innovative “whole-of-life” solution that provides a single financing source for each of the respective development, construction and operational phases of a project’s lifecycle,” the investors explained.
Adding: “To this end, CIO provides early-stage project development services and financing, equity financing through construction, and long-term debt once the project is operational. This approach will allow CIO to implement more projects to market, faster, delivering positive environmental and social impact sooner.”
Meanwhile, the African Development Bank (AfDB) Board of Directors has approved the conversion of the Africa Climate Change Fund (ACCF) to a multi-donor trust fund.
The AfDB explained that the conversion brings two new partners to the Fund, the governments of Italy and Flanders (Belgium), who are contributing €4.7 million ($5 million) and €2 million ($2 million), respectively.
The Bank highlighted that the development now further opens the door to new partnerships with other donors interested in supporting African countries in their transition to low-carbon, climate resilient development and green growth.
The ACCF was established in 2014 with €4.725 million ($5 million) from the government of Germany.
Also, the Federal Ministry for Economic Cooperation and Development (BMZ), the founding donor of the ACCF, expressed pride that the Fund has achieved a milestone by attracting other donors.
BMZ further showed its gratitude to the German Development Agency (GIZ) for executing the agreement on its behalf.
Director of AfDB’s Climate Change and Green Growth Department, Anthony Nyong, commented: “The ACCF plays an important role in supporting African countries to scale up their access to climate finance to advance the ambitious targets they have set in their Intended Nationally Determined Contributions (INDCs).
“The contributions of Italy and Flanders are a testament to the good work that the Fund has done so far and the potential that exists to scale it up.”
Nyong added: The partnership with our donors will be instrumental in scaling up the Bank’s climate finance to advance climate resilient, low carbon development across the continent.”
The AfDB cited a recent study by the Climate Policy Initiative, which indicates that only 3% of the global climate finance currently flows to Sub-Saharan Africa, despite the statistic that region is the most vulnerable to climate change.
Simon Calcoen of the Flanders Department of Foreign Affairs stated that “the government of Flanders is convinced that the ACCF is key to resolving the current tension between unmet climate needs in Africa and available international climate finance.”