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CFM raises over $1bn for climate fund

CFM raises over bn for climate fund

Climate Fund Managers closes a US$1 billion adaptation fund. Climate Fund Managers has secured over US$1 billion for its Climate Investor Two fund, aimed at financing climate adaptation infrastructure in developing economies, marking it as the largest fund of its kind globally….

Climate-focused blended finance investment manager, Climate Fund Managers (CFM), has successfully closed its second climate investment vehicle, securing over US$1 billion in commitments. This fund is recognised as the world’s largest adaptation-focused infrastructure fund targeting developing economies.

Established in 2019 in collaboration with the European Commission and the Dutch Fund for Climate and Development, the Climate Investor Two (CI2) fund is designed to address the significant shortfall in global adaptation finance. The UN Environment Programme estimates this gap to be as much as US$366 billion annually. CI2 employs a blend of public and private capital to support projects through early-stage development and construction phases, utilising concessional financing to mitigate investment risks.

CI2 surpassed its initial target, receiving an additional US$190 million in pledges and a €205 million guarantee from the EU. The fund aims to invest in water, waste, and ocean-related infrastructure projects across Africa, Asia, and Latin America, focusing on communities most vulnerable to climate risks.

Andrew Johnstone, CEO of CFM, stated: “While climate mitigation remains critical in the race to end the climate crisis, adaptation must be an equal priority. Closing Climate Investor Two at more than US$1 billion in a challenging environment is a major milestone that highlights investor appetite for adaptation and our ability to structure compelling opportunities in this space.”

CFM projects that CI2 will provide access to clean water and sanitation for 16.5 million people and restore or protect over two million hectares of ecosystems by the end of its term.

Since its initial close in 2021, CI2 has supported 25 projects valued at US$339 million, including desalination plants in Kenya and Thailand, waste-to-energy initiatives in Africa and Asia, and a significant debt-for-nature swap in Ecuador’s Galápagos Islands. The fund’s investors include development banks, multilateral agencies, and institutional investors.

CI2 follows CFM’s earlier renewable energy fund and precedes a third facility, which will focus on green hydrogen and energy transition projects.

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BQ

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