NDF - Financing for climate change and development projects


NDF provides financing to mitigation and adaptation activities within the nexus of climate change and development in lower-income countries and countries in fragile situations. Financing can be provided for the public and the private sectors, as well as through specific financing facilities.
NDF’s financing is provided on concessionary terms in the form of grants, loans and equity. NDF engages in both the public and the private sector, and use financial instruments flexibly, alone or in various combinations, to match the needs of the project.
Our key targets for the strategy period 2020-2025 are:

  • Climate. At least 50% directed towards adaptation projects
  • Country focus. At least 60% targeted towards Sub-Saharan Africa
  • Concessionality. At least 50% of financing with grants

Public sector financing

Through its financing, NDF provides different kinds of solutions for the financing of nationally prioritised public sector projects implemented by public sector entities.
Private sector financing

Recognising the important role of the private sector in climate finance, NDF seeks ways to partner with the private sector to mobilise institutional investors to finance climate action, and to support local private entities.
Project selection and investment process
NDF selects projects and investments based on criteria and principles derived from our mandate and strategy. Following the co-financing model, NDF often identifies projects and programs through strategic partners and lead investors.
Project identification is followed by a diligent preparation process and in-depth analysis of the proposal. All proposals are subject to two considerations by the NDF Board of Directors. Financing proposals not exceeding EUR 500,000 are subject to approval by NDF Managing Director.

Where we work
NDF’s focus on the nexus between climate and development implies a focus on selected countries within the groups of lower-income countries and countries in fragile situations, including Small Island Developing States (SIDS). From the eligibility perspective, our country focus is as follows: 

Lower-income countries as per the OECD-DAC list
- Least Developed Countries (LDC),
- Other Low-Income Countries (OLIC), and
- Lower Middle-Income Countries (LMIC).
Countries in fragile situations
World Bank List of Fragile and Conflict-affected Situations
OECD States of Fragility framework
UN Vulnerable Countries

Size of Financing
NDF provides flexibly financing of different sizes depending on the needs of the project/investment. Typically the size of financing ranges from EUR 2 million to EUR 12 million. Financing of up to EUR 500,000 may be provided to support preparatory activities that are expected to lead to larger scale projects and investments.

More information

NDF Strategy
Guidelines for Project Identification and Screening

Other financing instruments »