NDF - Financing for climate change and development projects

Climate Resilience and Adaptation Finance and Technology Transfer Facility (CRAFT) [NDF C106]

Photo: NDF
10.11.2017
The objective of CRAFT will be to create a diversified portfolio of investments in private companies developing and producing products and solutions that help assess and manage the physical risks and impacts of climate change. CRAFT will target investments in two types of companies: resilience intelligence companies and resilience products & services companies.

Multiple regions
Climate Resilience and Adaptation Finance and Technology Transfer Facility (CRAFT)
Ref: NDF C106

Executing Partner: The Lightsmith Group 
Partner Agencies: Global Environment Facility and Conservation International
Total Project Cost: USD 2.2 million
NDF Financing: EUR 0.5 million
Project type: Climate change adaptation
Duration: 15 months

Project Description
The project consists of financing the costs of preparation and establishment of the Climate Resilience and Adaptation Finance and Technology Transfer Facility (CRAFT), the first global commercial investment vehicle dedicated to expanding the availability of technologies and solutions for climate adaptation and resilience in developing and developed countries. The CRAFT concept has been developed by the Lightsmith Group.

The NDF grant support will be used to finance specific preparation activities that will bring the CRAFT concept into execution. The fund preparation activities include two main components, namely the formal establishment of the Fund and capital mobilisation through active fundraising, targeting a first closing of the Fund in mid-2018. 

Project Objective
CRAFT will be structured as a single global private equity fund, managed by the Lightsmith Group. The fund will have a blended structure that will enable the participation of a diverse set of investors, including concessional and commercial investors. It will include two separate investment windows, one for developed countries and another for developing countries. The two investment windows will be completed with a separate Technical Assistance Facility, which will be used specifically to strengthen the support to investee companies in expanding technological capacity and solutions in developing countries.

The objective of CRAFT will be to create a diversified portfolio of investments in private companies developing and producing products and solutions that help assess and manage the physical risks and impacts of climate change. CRAFT will target investments in two types of companies: resilience intelligence companies and resilience products & services companies.

Relevance for Climate Change
CRAFT will invest in companies producing and developing products and services related to adaptation and climate resilience. These investments are expected to impact positively on the supply of adaptation solutions and services in developed and developing countries. Many of the potential investee companies have activities that are not limited to adaptation, and in fact include mitigation activities, such as energy efficiency.

Financing
The total project cost estimate is USD 2.2 million with NDF contributing EUR 0.5 million. The Global Environment Facility is preparing a grant for USD 1.0 million. A third investor is being sourced to finance the balance of a potential grant financing of USD 0.6 million.

Innovation aspects
The concept of CRAFT is to establish a new innovative financing facility that will provide capital to a market segment that has been largely underserved, and targeting specifically private sector companies.

NDF Contact
Program Manager Isabel Leroux
Telephone: +358 10 618 0461

More information