Climate Fund Managers Close $1B Fund to Tackle Climate Adaptation Gap

Climate Fund Managers (CFM) has successfully closed its second climate-focused investment vehicle, Climate Investor Two (CI2), raising over US$1 billion in commitments, making it arguably the largest infrastructure fund dedicated to climate adaptation in emerging markets.

Launched in 2019 in partnership with the European Commission and the Dutch Fund for Climate and Development, CI2 is built around a “blended finance” model, combining public and private capital with concessional financing to reduce investor risk. The fund’s goal is to close the vast gap in global adaptation funding, which the UN Environment Program estimates to be up to US$366 billion annually.

CI2’s fundraising success was bolstered by a fresh US$190 million in new pledges and a €205 million guarantee from the European Union. The capital will be directed into infrastructure projects in sectors like water, waste, and oceans, especially in regions across Africa, Asia, and Latin America that are most vulnerable to climate impacts.

CFM projects that, over its lifetime, CI2 will expand access to clean water and sanitation for 16.5 million people and help restore or protect more than 2 million hectares of ecosystems. Since its initial close in 2021, CI2 has already supported 25 projects amounting to US$339 million, with ventures including desalination facilities in Kenya and Thailand, waste-to-energy plants in Asia and Africa, and a debt-for-nature swap in Ecuador’s Galápagos Islands.

CFM notes that CI2 is part of a broader strategy: it follows their earlier clean energy fund and anticipates a third fund focused on green hydrogen and energy transition infrastructure. CEO Andrew Johnstone emphasized that while climate mitigation is crucial, adaptation must receive equal attention, and that investor demand for adaptation-oriented infrastructure is growing even in challenging financial climates.

In conclusion, the CI2 fund’s milestone demonstrates that large-scale investment in climate adaptation is gaining traction. By successfully mobilizing public and private sources and targeting essential infrastructure in vulnerable regions, this fund could play a pivotal role in helping communities adapt to climate change while creating investable, resilient projects.

Sumber:

https://www.esgtoday.com/cfm-raises-over-us1-billion-for-climate-infrastructure-fund-2/