Climate change is expected to disproportionately affect the urban and rural poor of developing countries, thus making it central to the many aspects of poverty reduction, economic growth and development.   Recognizing this, the United Nations Framework Convention on Climate Change (UNFCCC) acknowledges the need to provide additional financial resources to developing countries in order to help them mitigate and manage the challenges of climate change. 

 

The Climate Investment Funds (CIF), approved by the World Bank’s Board of Directors on July 1, 2008, are a collaborative effort among the Multilateral Development Banks (MDBs) and countries to bridge the financing and learning gap between now and a post-2012 global climate change agreement. Designed through extensive consultations, the CIF are governed by balanced representation of donors and recipient countries, with active observers from the UN, GEF, civil society, indigenous peoples and the private sector.

 

The CIF design includes a sunset clause which enables closure of funds once a new financial architecture has become effective under the UNFCCC regime.

 

On September 26, 2008 donors gathered to pledge over US$6.1 billion.

 

 

The CIF are comprised of two Trust Funds, each with a specific scope and objective and its own governance structure.

 

The CLEAN TECHNOLOGY FUND (CTF) promotes investments to initiate a shift towards clean technologies. The CTF seeks to fill a gap in the international architecture for development finance available at more concessional rates than standard terms used by the Multilateral Development Banks (MDBs) and at a scale necessary to help provide incentives to developing countries to integrate nationally appropriate mitigation actions into sustainable development plans and investment decisions. Through the CTF, countries, the MDBs, and other partners agree upon country investment plans for programs that contribute to the demonstration, deployment and transfer of low carbon technologies with significant potential for greenhouse gas emissions savings.

 

The STRATEGIC CLIMATE FUND (SCF) serves as an overarching fund to support targeted programs with dedicated funding to pilot new approaches with potential for scaled-up, transformational action aimed at a specific climate change challenge or sectoral response. Targeted programs under the SCF include:

 

• 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.
• The Pilot Program for Climate Resilience (PPCR), approved in November 2008, was the first Program under the SCF to become operational.  It aims to pilot and demonstrate ways in which climate risk and resilience may be integrated into core development planning and implementation. In this way, the PPCR provides incentives for scaled-up action and initiates transformational change.
• The Program for Scaling-Up Renewable Energy in Low Income Countries (SREP), 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.