March 9, 2015
The Climate Investment Funds (CIFs)


Multilateral Environmental Assistance
The Climate Investment Funds
Many governments believe that environmental degradation
Since 2008, the CIFs have provided 63 developing and
and climate change pose international and trans-boundary
middle income countries with financial resources to
risks to human populations, economies, and ecosystems that
mitigate and manage the challenges of climate change and
could result in a worsening of poverty, social tensions, and
reduce their greenhouse gas emissions. The CIFs are
political stability. To confront these global challenges,
composed of two separate trust funds—the Clean
countries have negotiated various international agreements
Technology Fund (CTF) and the Strategic Climate Fund
to protect the environment, reduce pollution, conserve
(SCF)—each with a specific scope, objective, and
natural resources, and promote sustainable growth. While
governing body. Overall, 14 contributor countries have
some observers call upon industrialized countries to take
pledged $7.6 billion to the funds since September 2008.
the lead in addressing these issues, there is recognition that
The contributions are expected to leverage an additional
efforts are unlikely to be sufficient without similar
$57 billion from other sources (e.g., MDBs, financial
measures being implemented in developing countries.
intermediaries, and the private sector). For a full description
However, developing countries, which tend to be focused
of purpose and programs, see the CIFs website at
on poverty reduction and economic growth, may not have
http://www.climateinvestmentfunds.org/cif/.
the financial resources, technological know-how, and/or
institutional capacity to deploy such measures on their own.
Organizational Structure
Therefore, international development assistance has been a
principal method for governments to support developing
The CIFs are implemented through a partnership of the
country action on global environmental problems.
MDBs and governed by representatives from both the
contributor and recipient countries. The role of governance
The United States and other industrialized countries have
for the CIFs is to approve investment plans, programming,
committed to providing financial assistance for
and the allocation of financial resources and to provide
environmental initiatives through a variety of multilateral
guidance, performance evaluation, and reporting. It is
agreements (e.g., the Montreal Protocol [1987], the U.N.
further tasked with ensuring that the strategic orientation of
Framework Convention on Climate Change [1992], and the
the CIFs is guided by the principles of the UNFCCC. The
U.N. Convention to Combat Desertification [1994]).
organizational structure of the CIFs is balanced between
International financial assistance takes many forms, from
contributor and developing countries. All decisions are
fiscal transfers to market transactions, and includes official
made by consensus. Other international organizations, the
development assistance, contributions to multilateral
private sector, and civil society representatives are included
development banks (MDBs) and other international
as observers. All observer roles are “active,” allowing them
financial institutions, export credits, loan guarantees,
to take the floor, propose agenda items, and recommend
insurance products, and foreign direct investment.
experts but not to vote. The governance structure of the
CIFs includes the following: a Trust Fund Committee, an
Background
MDB Committee, a Partnership Forum, an Administrative
Unit, and the Trustee (the World Bank).
In February 2008, Japan, the United Kingdom, and the
United States announced their intention to create a set of
Funding
funds at the MDBs to help developing countries “bridge the
gap between dirty and clean energy” and “boost the World
The United States pledged $2 billion to the CIFs in 2008.
Bank’s ability to help developing countries tackle climate
All U.S. funding is subject to annual congressional
change” (Henry Paulson, et al., “Financial Bridge from
appropriations, and payments are made by the U.S.
Dirty to Clean,” Financial Times, February 7, 2008). The
Treasury to the World Bank as trustee for the CIFs.
World Bank held the first design meeting for the proposed
Appropriations have varied widely over the years, largely
Climate Investment Funds (CIFs) in March 2008 in Paris,
reflecting budget trends. Through fiscal year (FY) 2015, the
France. Two subsequent meetings were held in
United States has contributed approximately $1.77 billion
Washington, DC, and Potsdam, Germany, and on May 23,
to the CIFs. The Administration’s FY2016 budget request
2008, representatives from 40 developing and industrialized
includes $170.7 million for the CTF and $59.6 million for
countries reached agreement on the funds’ design and
the SCF. If appropriated, this request would fulfill the
duration. (The CIFs were programmed to sunset upon the
United States’ 2008 pledge. See Table 1 for a summary of
commencement of the Green Climate Fund in the U.N.
U.S. contributions to the CIFs.
Framework Convention on Climate Change [UNFCCC].)
www.crs.gov | 7-5700

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The Climate Investment Funds (CIFs)
Table 1. U.S. Contributions to the CIFs by Fiscal Year
The Strategic Climate Fund
Clean Technology
Strategic
The SCF aims to help developing countries prepare for
Fiscal
Fund
Climate Fund
climate change by promoting low-carbon, climate-resilient
Year
(USD millions)
(USD millions)
development. Three targeted programs provide grants and
concessional loans to pilot new approaches aimed at
2010 $300.0
$75.0
specific challenges.
2011 $184.6
$50.0
The Forest Investment Program (FIP). The FIP, approved
2012 $229.6
$74.9
in May 2009, supports developing countries’ efforts to
2013 $196.2
$110.2
reduce emissions from deforestation and forest degradation.
It provides financing for managing forests and for educating
2014 $209.6
$74.9
indigenous and local communities about national forest
2015 $201.3
$63.2
laws.
2016
$170.7 $59.6
The Pilot Program for Climate Resilience (PPCR). The
(request)
PPRC, approved in November 2008, was the first program
Total $1,492.0 $508.0
under the SCF to become operational. It supports ways to
integrate climate risk and resilience into the development
Source: CRS, from the U.S. Department of the Treasury.
strategies of low-income countries. It finances efforts to
provide technical assistance to help with capacity building,
The Clean Technology Fund
policy reform, and sector investment.
The CTF was established in 2008 to provide scaled-up
The Program for Scaling-Up Renewable Energy in Low
financing to middle income countries to contribute to the
Income Countries (SREP). The SREP, approved in May
demonstration, deployment, and transfer of low-carbon
2009, supports projects that demonstrate the social,
technologies with the potential for long-term greenhouse
economic, and environmental viability of low-carbon
gas emissions savings. CTF concessional financing,
development pathways in the energy sector. It seeks to
channeled through five partner MDBs, focuses on large-
create new economic opportunities and increase energy
scale, country-led projects in renewable energy, energy
access through the production and use of renewable energy.
efficiency, and transport.
• Contributor countries have pledged $5.3 billion to the
Issues for Congress
CTF since 2008.
Congressional committees of jurisdiction over the CIFs
• The CTF supports 134 projects and programs totaling
include the U.S. House of Representatives Committees on
$6.1 billion and expects co-financing of $51 billion from
Foreign Affairs, Financial Services, and Appropriations and
other sources.
the U.S. Senate Committees on Foreign Relations and
• $3.9 billion is approved for 70 projects, leveraging $44
Appropriations. The CIFs, as a part of U.S. multilateral
billion in co-financing, to deliver 16.6 gigawatts of
assistance, are managed by the U.S. Department of the
renewable energy capacity, of which 2.2 gigawatts is
Treasury and are funded through the Administration’s
already installed.
Executive Budget, Function 150 account, for State, Foreign
Operations, and Related Programs.
• CTF investments are projected to result in
approximately 1.7 billion tons of greenhouse gas
As Congress considers potential authorizations and/or
emission reductions over their lifecycle (i.e., equivalent
appropriations for the CIFs, it may have questions
to emissions from approximately 550 million cars).
concerning existing bilateral and multilateral programs that
address international environmental issues. Some concerns
The CTF differs from other mitigation-focused, multilateral
may include the cost, purpose, direction, efficiency, and
climate instruments by focusing on larger transactions in a
effectiveness of these programs, as well as the relationship
smaller number of countries. The CTF aims to drive down
between international development assistance for the
technology costs, stimulate private sector participation, and
environment and the interests of industry, investors,
catalyze transformations that can be replicated elsewhere.
humanitarian efforts, national security, and international
The CTF is currently operational in 19 countries and one
leadership. For more discussion on the benefits and costs of
region and includes plans in Chile, Colombia, Egypt, India,
international environmental assistance, see CRS Report
Indonesia, Kazakhstan, Mexico, Morocco, Nigeria, the
R41845, The Global Climate Change Initiative (GCCI):
Philippines, South Africa, Thailand, Turkey, Ukraine, and
Budget Authority and Request, FY2010-FY2016.
Vietnam and one regional investment plan in the Middle
East and North Africa covering Algeria, Egypt, Jordan,
Richard K. Lattanzio, rlattanzio@crs.loc.gov, 7-1754
Morocco, and Tunisia. Projects include support for wind

energy, urban public transportation systems, solar water
heaters, smart-grid development, and concentrating solar
IF10145
thermal power programs, among others.
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