Looking back at 2013, the Climate Investment Funds’ (CIF) fifth year, I am encouraged by the amount of ground we have covered. Not only are we beginning to see more tangible results of CIF investments, we are also venturing into new territory both geographic and financial. New contributions of $400 million received in 2013 make us the largest source of climate finance with pledges of $8 billion, demonstrating the confidence donors have in our mission and multilateral development bank (MDB) partnership to deliver on the promise of transformative, climate-smart development.
The CIF was created to trigger investments for immediate climate action and to facilitate learning on the technologies and methods needed to promote clean technology, renewable energy, sustainable management of forests, and climate-resilient development. The clock is ticking in the race against climate change, and we are on the move.
In Mexico, for example, $45 million from the Clean Technology Fund (CTF) has leveraged over $500 million of commercial resources to help catalyze the commercialization of Oaxaca’s wind industry. In Turkey, $149.5 million in CTF financing has attracted $1.38 billion from other sources to expand national bank lending to renewable energy and energy efficiency markets to stimulate their growth. And in Morocco, $197 million in CTF financing has played a pivotal role in launching the first phase of the 500MW Ouarzazate concentrated solar power complex by raising awareness and attracting over $1 billion in additional financing.
These front runners were joined by many more approved projects and programs from the CTF pipeline in 2013; a 72 percent increase in CTF disbursements is on track with projections.
New initiatives were launched last year to explore more aggressively how we can best engage the private sector on climate activities. A total of $150 million was approved for the Dedicated Private Sector Programs, a new CTF financing initiative designed to catalyze greater private sector engagement in clean technologies beginning with geothermal power and mini-grids.
Financing was also set aside to be awarded on a competitive basis for private sector projects advancing the goals of the Forest Investment Program (FIP), the Pilot Program for Climate Resilience (PPCR), and the Scaling Up Renewable Energy in Low Income Countries Program (SREP). In 2013, CIF Committees endorsed 15 private sector project concepts that are to receive $135 million in CIF funding through the set asides. We are now making a second call for private sector project proposals under the PPCR and SREP.
This progress is exciting and demonstrates the enormous potential of the CIF to trigger early steps to transform economies, sectors, and mindsets. But it needs to be kept in mind that transformation takes time. We have come to appreciate that we are running a marathon rather than a sprint.
We have realized, for example, that some of the larger infrastructure projects are far more complex than originally anticipated, requiring more time and effort to resolve technical and political issues, as well as negotiations with multiple stakeholders. Mobilizing financing from numerous sources with different rules and requirements adds another dimension.
The CIF’s programmatic approach to climate-smart development is also sweeping in its scope. It requires pilot countries to build partnerships and coordinate across governments, institutions, sectors, and stakeholder groups to plan and implement CIF investments that work together for comprehensive, lasting change. It can take many months—in some cases, years—to find common ground and a shared vision of the future.
In Peru, for example, the FIP investment planning process took over three years to complete, but it provided a platform for an important national debate. The government, civil society, and private sector were able to unite on a strategy positioning forests as an asset for economic growth, social inclusion, and sustainable environmental development. The time invested in this up-front process was well spent as it will help speed implementation and yield better results in the end.To date, 75 projects and programs, about 32 percent of the CIF portfolio, are MDB approved and in various stages of implementation. Things have not always gone according to plan or as quickly as originally anticipated, but every success and every setback of the CIF is an opportunity to learn, adapt, and advance climate knowledge. The 2013 CIF annual report, appropriately titled Rooted in Learning, Growing with Results, highlights many of our early results and lessons learned.
It is an exciting time for the CIF, and 2014 promises to be even more dynamic as the international community intensifies its discussions on the future of climate finance. I am very proud of how far the CIF has come in just five years and of our increasing momentum. The race against climate change is not won yet, but CIF pilot countries and partners are setting the pace toward a cleaner, safer, and smarter world.
This post was originally published in CIF Voices.