NDF - Financing for climate change and development projects

The new ProClimate Facility

10.06.2010

The NDF Board has approved financing of EUR 10 million for the ProClimate Facility (ProCF) which establishes and pilots a partial climate guarantee and technical assistance facility to support small and medium-sized investments in climate change mitigatio

There is common recognition that private finance is an important contributor in combating climate change. However, increased private financing in climate projects in developing countries still faces several impediments. Awareness needs to be raised among the investor community and financing institutions, the gap between finance and projects needs to be bridged, risk mitigation sche mes need to be identified to encourage investment and public finance needs to help spread private finance to the least developed countries. As an organization specialised in climate-related finance in developing countries, NDF is well-positioned to identify and pilot ways for using concessional finance instruments to leverage more private financing for climate-related projects in high-risk countries which are currently outside the major private financing flows. ProCF is an example of this support.
ProCF can extend partial loan guarantees, technical and operational guarantees as well as technical assistance to selected projects. As an innovative element the facility can enable different kinds of advance payments on deliveries and supplies, such as energy and Certified Emission Reductions (CERs) under the Clean Development Mechanism (CDM). Attaching technical assistance to the selected projects is expected to further enhance the efficiency of the facility.
ProCF builds on NDF’s experiences from the Mekong Energy and Environment Partnership (EEP), the Nordic Climate Facility (NCF), and the recently-launched GreenPyme energy efficiency program of the Inter-American Investment Corporation (IIC ). All three programs operate between the public and private sectors. The ProCF supplements the already available financing by establishing a possible source for further support for viable projects developed under these seed-fund facilities.
ProCF will be implemented in partnership with the Nordic Environment Finance Corporation (NEFCO), which possesses extensive experience with CDM projects and the private sector in general.
More information
ProClimate Facility (ProCF)