This article is featured in the 2024 FCLTGlobal Blue Book, a collection of real-world examples of how our members are putting long-term strategies into practice today. We hope that these practical illustrations will inspire others to embrace the mission of focusing capital on the long term. Learn more >>

Despite growth in recent years, global climate finance flows continue to fall short of demand. In 2021-2022, average climate finance flows reached nearly $1.3 trillion — nearly double 2019-2020 levels, but well below the roughly $4.5-$5 trillion estimated need1. The gap is notably acute in Asia, where local economies remain heavily dependent on public-sector financing and where clean energy investment is not yet at scale — particularly in India and Vietnam, given their enabling environment and urgent need for carbon emissions reductions to meet country-specific climate goals. In India, for example, the power sector may need about $650 billion in additional financing to reach its 450 GW renewable energy target2. While private capital is beginning to mobilize and help emerging markets make progress on decarbonization goals, the public and private sectors must continue to work collectively to drive scale and commerciality of low-carbon solutions.  

To help drive more capital, Goldman Sachs and Bloomberg Philanthropies partnered to seed $25 million in grant capital and launch the Climate Innovation & Development Fund (“the Fund” or “CIDF”), which was structured as a blended finance facility3 and is managed by the Asian Development Bank (ADB). The Fund’s goal was twofold: 1) increase the pace, scale, and ambition of climate solutions and 2) help transition to a low-carbon economy. The Fund was focused on catalyzing investment in low-carbon technologies across South and Southeast Asia. The seed money has since helped unlock ~$500 million in private-sector and government investments. 

Combining our respective strengths uniquely positioned the CIDF for success. By leveraging our convening power, grant capital, industry knowledge, and in-region expertise, we could expand our efforts, scale rapidly, and help close the gap more efficiently. Our distinctive fund structure leveraged various finance mechanisms to mobilize capital through the targeted use of concessional financing such as performance-based incentives, capital expenditure grants, contingent guarantees or reserves4 

The following projects focused on clean energy, sustainable transport, energy efficiency, and adaptation activities to help improve the climate resilience of both livelihoods and infrastructure. Each was catalytic in nature within its regional context and is poised to have a lasting demonstration effect5.  

VinFast: Provided a milestone-based grant that mobilized ~44x (44 times more than the grant amount) of investment capital to support Vietnam’s leading electric vehicle manufacturer in its supply of electric buses and supporting charging infrastructure; ultimately being the country’s first fully electric public bus fleet and first national electric vehicle charging network.  

Green Cell: Mobilized ~14x CIDF’s capital to partially fund an integrated battery energy storage system and off-site solar electricity arrangement for an electric bus fleet in India. This combination allows a portion of the bus fleet to be 100% powered by renewable energy, which may not have been economically viable otherwise.  

AC Energy: Mobilized ~31x of investment capital to support an 88-megawatt windfarm in Vietnam with environmental and social-related safeguards and enhancements. The grant will de-risk the wind farm’s project finance through the provision of a revenue reserve facility, which disburses funds when operations are curtailed due to environmental and social safeguards. 

Australis Greener Grazing: Provided a matched, milestone and activity-based grant that mobilized ~14x of investment capital to support the development of seaweed as an agricultural feed supplement for innovative carbon abatement in Vietnam.  

Tata Power: Provided a grant, mobilizing ~22x of investment capital, to partially fund the purchase and integration of South Asia’s first 10-megawatthour grid-scaled energy storage project integrated into an electricity distribution network. The project will help Delhi’s grid integrate clean energy sources like solar, and is expected to help reduce grid instability, black/brownouts, and damage to customer equipment through power surges. 

GreenYellow: Used CIDF’s grant as first loss capital for ADB’s first financing of a solar photovoltaic rooftop portfolio for the commercial and industrial segment in Vietnam. This mobilized ~8x of investment capital. 6 

Greenway: Enabled the rollout of up to 1,000,000 improved cookstoves as a carbon credit project through a liquidity reserve which mobilized ~12x of investment capital. This initiative addresses health hazards caused by inefficient cooking practices, aiming to save lives and empower mostly women by reducing their domestic workload. 

Each investment harnessed the power of innovative financing to help improve commercial viability at scale and maximize impact by tailoring solutions to meet regional needs. Here, we distill six key takeaways:  

Strategic Partnerships: Strategic partnerships bring added value via pooled experience and expertise.  

Additional Capital: Blending funds unlocked significant additional capital – more than 20x the initial investment on average.  

Proof-of-Concept: Blended finance aids in proving the concept for innovative technologies and commercial viability.  

Project Selection and Visibility: Rigorous project selection helps address the challenges of prioritizing which opportunities to pursue.  

Innovative Financing: Innovative finance mechanisms improve commercial viability.  

Regional Focus: Tailoring funds to specific regions can maximize impact. 

For more information and key takeaways, explore the full report, Progress and Lessons from the Climate Innovation and Development Fund. 

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