Investment management company Climate Fund Managers (CFM) has closed its second blended finance global climate fund initiative – Climate Investor Two (CI2) – at $642-million for Africa, South and South-East Asia, and Latin America.
CI2 follows the establishment of its first initiative – Climate Investor One (CI1) – and will provide expertise, technology and financing to infrastructure projects in emerging markets by mobilising private sector financing at scale, supported by catalytic public sector donor funding.
Following CI1’s focus on renewable energy, CI2’s focus is on water, sanitation and ocean infrastructure. These sectors are fundamental to human life and economic development, but are also the medium through which the effects of climate change will be felt on earth, CFM point out in a statement.
As such, the company says CI2 will provide expertise, technology and financing to projects that help vulnerable societies mitigate and adapt to global climate change.
Formed in partnership with and as a part of the Dutch Fund for Climate and Development (DFCD), CI2 uses the same blended finance structure as CI1.
This structure, CFM reports, simplifies 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.
Through its CI2 development fund, CI2 provides early-stage project development services and financing. Through the CI2 construction equity fund, CI2 provides equity finance that accelerates project construction.
With this approach, CFM says, CI2 is designed to implement more projects faster, delivering positive environmental and social impact sooner.
Building on the comprehensive support of the Netherlands government – including the Ministry of Foreign Affairs through the DFCD, as well as commercial investors KLP, IMAS Foundation, Sanlam Investments Holdings, Aegon Asset Management and BNG Bank – a development finance institution and donors (comprising the European Commission and Nordic Development Fund) have committed to providing the cornerstone support for CI2.