A consortium of Dutch nongovernmental organisations and financiers has been awarded the tender to manage the €160-million Dutch Fund for Climate and Development (DFCD), which aims to help developing countries build climate-resilient economies.
The consortium comprises Dutch development bank FMO, the SNV Netherlands Development Organisation (SNV), the World Wide Fund for Nature Netherlands (WWF-NL) and Climate Fund Managers (CFM), which is a joint venture between Sanlam InfraWorks, part of the Sanlam group, and FMO.
“Sustainable development and climate change are core issues that need to be addressed on a global scale through innovative investment.
“Through Sanlam InfraWorks, we are able to deliver long-term returns to investors and, concomitantly, promote positive environmental change,” comments Sanlam Investments CEO Nersan Naidoo.
The consortium will use the DFCD to improve the wellbeing, economic prospects and livelihoods of vulnerable groups – particularly women and youth – and enhance the health of critical ecosystems, from river basins to tropical rainforests, marshland and mangroves in developing countries.
The consortium’s activities will also help to protect communities and cities from the increasing frequency of extreme weather events and benefit weakening biodiversity in areas that provide people with water, food, medicine and economic opportunities.
In the period up to 2030, an estimated $3.5-trillion is required for developing countries to implement the Paris Agreement climate pledges to prevent the “potentially catastrophic and irreversible effects of climate change”.
Therefore, the FMO-led consortium will use the DFCD funding to accelerate the flow of institutional and commercial capital into climate-resilient investments.
The consortium provides the Dutch government with a vehicle for climate impact and promotes broad-based actions to confront the global challenge of climate change.
The fund will focus on several high-impact investment themes, including climate-resilient water systems and freshwater ecosystems, forestry, climate-smart agriculture and the restoration of ecosystems to protect the environment.
The DFCD will comprise three separate but operationally linked facilities, each with a unique role across the project lifecycle, as well as a unique thematic subsector focus.
The consortium will connect the long-standing project development expertise of SNV and the WWF-NL to the mobilising and investment power of FMO and CFM.
This will allow projects to graduate from idea to full implementation, using lifecycle financing for every stage of a project.
Further, the consortium will adopt a “landscape” strategy for deal origination and execution.
This strategy will allow consortium parties to actively source and develop investment opportunities for other consortium parties in and around, as well as downstream of, the vicinity of their own investment activities.