The Climate Investment Funds (CIFs) were designed by developed and developing countries and are implemented with the multilateral development banks (MDBs) to bridge the financing and learning gap between now and the next international climate change agreement. CIFs are two distinct funds: the Clean Technology Fund and the Strategic Climate Fund.[1]
The CIFs are additional to existing Official Development Assistance (ODA) and aim to enable countries to continue on their development path and achieve the Millennium Development Goals. These funds will be operated in close coordination with existing bilateral and multilateral efforts.
The funds were approved by the World Bank Board of Directors in July 2008 and on September 26, 2008 received pledges of US$6.5 billion.
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The Clean Technology Fund (CTF) promotes scaled-up financing for demonstration, deployment and transfer of low carbon technologies with a significant potential for long-term greenhouse gas emissions savings. Innovation and deployment of clean technologies at scale will be central to success.[2]
Investments are planned for renewable energy and highly efficient technologies to reduce carbon intensity, for the transport sector, to address both efficiency and to promote modal shifts, and for energy efficiency in buildings, industry and agriculture.
The World Bank is the Trustee of the CIFs, which include a "sunset clause" to ensure that the Fund's activities do not prejudice the outcome on the UNFCCC negotiations.
Solar thermal power provides a useful illustration because it shows promise as a renewable option for baseload power. A recent study indicates that under a carbon pricing scheme with charges consistent with the low-end of requirements for safe atmospheric carbon loading, public financing through the CTF Fund could close the cost gap between solar thermal and coal-fired power in a 5 to 10 year program that expands capacity at 500-1000 MW/year. Total Clean Technology Fund subsidies for this program would be $4 – $8 billion – easily within range for a serious multilateral effort.[3]
The Strategic Climate Fund (SCF) will comprise targeted programs with dedicated funding to provide financing to pilot new approaches with potential for scaling up. It will help more vulnerable countries adapt their development programs to confront the impacts of climate change ensuring climate resilience and a program to take action to prevent deforestation is under design. It will also enable discussions between donors and recipient countries about climate related investment and encourage support from a wide range of bilateral donors, private sector and civil society stakeholders.[4]
The Pilot Program for Climate Resilience (PPCR) is the first program under the Strategic Climate Fund. It seeks to explore practical ways to mainstream climate resilience into core development planning and budgeting that is consistent with poverty reduction and sustainable development goals. The PPCR will build on National Adaptation Programs of Action (NAPAs) and other national strategies and work in 11 pilot countries and regions. It is strategically aligned with, and maintains strong links to, the Adaptation Fund established under the Kyoto Protocol.
The Scaling-Up Renewable Energy Program (SREP) in Low Income Countries, approved in May 2009, is aimed at demonstrating the economic, social and environmental viability of low carbon development pathways in the energy sector by creating new economic opportunities and increasing energy access through the use of renewable energy.
The Forest Investment Program (FIP), approved in May 2009, aims to support developing countries’ efforts to reduce emissions from deforestation and forest degradation by providing scaled-up bridge financing for readiness reforms and public and private investments. It will finance programmatic efforts to address the underlying causes of deforestation and forest degradation and to overcome barriers that have hindered past efforts to do so.