Climate Investor Two [NDF C132]
Climate Investor Two (CI2) is a “whole-of-life” financing facility mandated with delivering infrastructure projects in the sectors of water, sanitation and oceans in developing countries.
Multiple Regions
Climate Investor Two
Ref. NDF C132
NDF grant EUR 15.0 million
Project Period: 2021-2041
Implementing Agency: Climate Fund Managers
Objective
Launched and managed by the Climate Fund Managers (CFM), CI2 is a follow-up fund to Climate Investor One (CIO), launched in 2017 with an investment strategy focusing on renewable energy projects. NDF participated in the second closing of CIO with a EUR 5 million returnable grant to the Development Fund, which is mandated in developing renewable energy projects up to the construction phase. Based on the proven blended finance fund architecture of CIO, CI2 is being set up with the twin goals of accelerating project development and mobilising commercial and institutional capital at scale into the selected sectors in developing countries.
The mission of CI2 is to invest in infrastructure necessary to enable communities to adapt and become resilient to the effects of climate change. The objective is to invest in the development and construction of private infrastructure project companies in low- and middle-income countries in Africa, Asia and Latin America. To fulfil CI2’s mission, the selection of the sectors of water, sanitation and oceans is based on their relevance and contribution potential to mitigating and adapting to the impacts of climate change. Plus, all three sectors are established in many developing countries and represent sizeable markets with significant investment gaps.
CI2 is established as three separate but interlinked funds - the Development Fund, the Construction Equity Fund and the Refinancing Fund - to provide bespoke financing for each stage of an infrastructure project’s lifecycle. The Development Fund is financed by donorbased grant commitments, which are used to finance the development phase of infrastructure projects. The Construction Equity Fund provides equity investment instruments to the construction phase of projects. Equity commitments to the Construction Equity Fund are allocated into three individual tiers (Tiers 1, 2 and 3), which differ in the risk-return profile provided to investors. Tier 1 is the junior tranche and it is intended to mitigate risks for commercial and institutional investors in Tiers 2 and Tier 3
The following outputs are expected based on the CI2 impact projections for the 20-year Fund Term provided by CFM:
~14 million people supplied with safe drinking water
~4 million people provided with sanitation
~3.5 million tons of CO2 emissions avoided annually
~USD 2.5 billion private sector funds catalysed at construction phase
Financing
NDF commitment to CI2 includes a USD 5 million returnable grant to the Development Fund and a USD 10 million junior equity contribution to the Tier 1 of the Construction Equity Fund.
NDF contact
Program Manager Michelle Voon
E-mail: michelle.voon@ndf.int
