Climate Investment Funds (CIF) have been a key player in raising climate finance since 2008 and as an $11 billion multilateral lender, CIF is one of the largest multilateral climate funds in the world. Governments, the private sector and multilateral development banks are among those who provide support to CIF to facilitate the provision of climate finance to those most vulnerable to climate change. The UK has historically provided significant support to CIF, having contributed £2.7 billion since 2008. The UK intends to build on this moment with the launch of the Climate Investment Funds (CIF) Capital Market Mechanism in 2024.
A key objective from the COP28 climate summit was to make climate finance available, accessible and affordable on a global scale, with a particular focus on low-and-middle income countries. The CIF Capital Markets Mechanism looks set to achieve this objective with its introduction next year intended to generate up to $750 million in climate finance annually. The UK and the World Bank, who announced the launch of the CIF Capital Market Mechanism at the COP28 summit, are hopeful that this will, in turn, attract co-financing for green projects in emerging and developing countries.
Significant climate funding, or lack thereof, has been repeatedly cited as one of the major obstacles in addressing climate change globally. The introduction of the CIF Capital Markets Mechanism in 2024 therefore represents a positive commitment to boost climate funding options. At CMS, we look forward to seeing the positive impact that the introduction of the CIF Capital Markets Mechanism, and the progression of climate finance more generally, will have on our clients across core sectors including finance and energy.
