When, in early 2023, the Climate Investment Funds (CIF) approved Colombia as the first partner country in the new Renewable Energy Integration program, it wasn’t for a single project, like most of the climate finance disbursed around the world.
It was for a multi-year commitment between CIF, the government, and the Inter-American Development Bank (IDB) to give Colombia access to US$70 million in highly concessional capital and to mobilize much more from public and private sources, to support a whole package of investments aligned with the country’s roadmap for a just energy transition.
The plan includes rural electrification projects using renewable energy; new grid infrastructure; transport sector electrification; and the deployment of advanced renewable technologies.
“We’re making sure that this isn’t just a technical transition, but that it’s also a just energy transition where we can include all the communities where the projects are being developed,” said Javier Campillo, director of IPSE, the government agency in charge of energy solutions.
That is the essence of CIF’s signature programmatic approach since its creation in 2008: developing country-led, strategic investment plans, in close collaboration with the multilateral development banks (MDBs), backed by scaled-up, predictable, and flexible resources.
This programmatic approach is built into our DNA because we recognized that tackling climate change will require a massive transformation in the global economy and the systems that underpin it. Nothing less will suffice.
CIF countries embrace a vision to fundamentally change energy systems, infrastructure, agriculture, natural resources management – and the institutions in charge. And, if we want a just transition, we need to address systemic injustices, such as inequality and marginalization, that perpetuate vulnerability. That is not something a single project can accomplish, no matter how ambitious. It requires sustained engagement over multiple years, with robust technical support and significant participation by key stakeholders.
As an in-depth study in 2018 found, “CIF’s programmatic approach provides the time, resources, and relationships that developing countries need to address the climate emergency. We believed this from the start, based on our knowledge of climate and development finance, and rigorous reviews of our work have confirmed it."
The rigorous and collaborative planning process brought through the programmatic approach ensures that CIF investments effectively address countries’ most pressing climate priorities, often leading to long-term changes in the modus operandi of key government, civil society, and private sector groups beyond the lifecycle of CIF funding.
Our approach also helps ensure that CIF investments deliver significant development benefits, contributing to 10 of the 17 Sustainable Development Goals (SDGs) – not only through climate action and expanded energy access, but by creating jobs and improving livelihoods, empowering women, protecting and restoring natural ecosystems, boosting crop yields, and much more.
A 2022 Overseas Development Institute study highlights the impact of CIF’s programmatic approach in Kenya and Bangladesh, noting it “allows for a clear line of sight to the macroeconomic impacts across the climate, economic, and social nexus” and may “offer most potential to secure country ownership over the action, being clearly embedded within national policies, strategies, and action plans.”
Based on a national investment plan through the Scaling-Up Renewable Energy Program in Low Income Countries (SREP), Kenya received CIF support for three clean energy projects, including a major expansion of geothermal energy capacity. This, the ODI study found, “provides a foundation for the economic transformation trajectory that the country has set.” Kenya implemented the program in partnership with the African Development Bank (AfDB), World Bank, and International Finance Corporation (IFC).
Bangladesh teamed up with the Asian Development Bank (ADB), World Bank and IFC for the restoration of coastal embankments. Meanwhile, through CIF’s Pilot Program for Climate Resilience (PPCR), the country was able to harness significant additional capacity and expertise, the study found. Together, the partners have achieved a wide range of social and environmental benefits, including gains in crop productivity.
Zambia is another prime example. Through its PPCR engagement and in partnership with the World Bank and AfDB, the government integrated climate resilience into the national development and sector plans. An Interim Climate Change Secretariat was set up in the Ministry of Finance, which went on to manage more than US$200 million in climate finance from development partners, coordinated multi-sectoral issues platforms, developed new proposals, and became a national focal point for climate resilience.
Finally, the Maldives’ fast-paced energy transition with support from CIF and the World Bank provides a roadmap for countries with energy independence and low carbon ambitions. The Maldives is not only building renewable energy infrastructure, but also developed a coherent set of measures that laid a solid foundation for the country to become an attractive destination for renewable energy investments.
“CIF delivers much needed and rapid finance at scale,” said Camilla Otto, EBRD’s Director of Donor Partnerships, “it is very important that we maintain a strength in the CIF, in particular its unique multi-MDB partnership model, its drive for innovation and programmatic approach, its lean structure and low transaction costs, and its ability to provide flexible and predictable funding at scale.”