GCF and FMO partnership will boost the growth of renewable energy in developing countries
The programme will target 11 low and lower-middle income countries with sizable energy deficits, which are also heavily reliant on fossil fuels in their energy mix. Despite ambitious national climate goals, the pace of the green energy transition in these countries is hindered by a number of obstacles, such as the scarcity of early-stage financing for large scale renewable energy projects, the lack of equity financing and complex contractual frameworks.
The Climate Investor One programme will address these obstacles by providing an integrated, full project life cycle financing solution to support the successful development, construction, and commissioning of renewable energy projects. The programme will consist of two separate funds which will provide development loans and equity financing throughout all project phases - development, construction, and operations. It will enable project sponsors to focus less on capital raising and more on project development, while also reducing construction timelines.
The GCF investment of USD 100 million in the Climate Investor One programme will be channeled via FMO, while the programme itself will be executed by Climate Fund Managers (CFM), a leading blended finance fund manager and a joint venture between FMO and Sanlam InfraWorks.
Tony Clamp, Deputy Director of GCF’s Private Sector Facility, said: “The Green Climate Fund is delighted to be partnering both with FMO and a wide variety of international public and private sector investors to support this innovative and highly impactful development and construction fund providing capital for renewable energy infrastructure across Africa, Latin America and Asia in support of climate ambition.”
Linda Broekhuizen, FMO’s Chief Investment Officer said “This GCF investment via FMO in Climate Investor One truly supports climate investment in developing countries. The total size of the fund boosts the ability to provide blended finance solutions. It will certainly accelerate far-reaching climate mitigation and adaptation projects to overcome the negative effects of climate change.”
Andrew Johnstone, CEO of CFM, said: “CFM welcomes this partnership with the Green Climate Fund in our combined pursuit of a more sustainable planet. The objectives of CFM’s flagship initiative, Climate Investor One, align strongly with GCF’s mission, and the combination of people, purpose, capital and cultures sets the foundation for a long and expansive relationship founded on innovation, change and impact.”
The Climate Investor One programme demonstrates the catalytic role that GCF plays in mobilising private sector investments. GCF investment into the programme unlocked further funding opportunities for new and existing commercial and institutional investors, helping to exceed the initial USD 530 million target by more than USD 300 million.
GCF’s Private Sector Facility (PSF) aims to fund and mobilise institutional investors and leverage GCF’s funds to encourage corporates to co-invest with us. To date, PSF portfolio amounts to USD 2.1 billion in 23 projects globally.