March 9, 2015
The Climate Investment Funds (CIFs)
Multilateral Environmental Assistance
The Climate Investment Funds
Many governments believe that environmental degradation
and climate change pose international and trans-boundary
risks to human populations, economies, and ecosystems that
could result in a worsening of poverty, social tensions, and
political stability. To confront these global challenges,
countries have negotiated various international agreements
to protect the environment, reduce pollution, conserve
natural resources, and promote sustainable growth. While
some observers call upon industrialized countries to take
the lead in addressing these issues, there is recognition that
efforts are unlikely to be sufficient without similar
measures being implemented in developing countries.
However, developing countries, which tend to be focused
on poverty reduction and economic growth, may not have
the financial resources, technological know-how, and/or
institutional capacity to deploy such measures on their own.
Therefore, international development assistance has been a
principal method for governments to support developing
country action on global environmental problems.
Since 2008, the CIFs have provided 63 developing and
middle income countries with financial resources to
mitigate and manage the challenges of climate change and
reduce their greenhouse gas emissions. The CIFs are
composed of two separate trust funds—the Clean
Technology Fund (CTF) and the Strategic Climate Fund
(SCF)—each with a specific scope, objective, and
governing body. Overall, 14 contributor countries have
pledged $7.6 billion to the funds since September 2008.
The contributions are expected to leverage an additional
$57 billion from other sources (e.g., MDBs, financial
intermediaries, and the private sector). For a full description
of purpose and programs, see the CIFs website at
The United States and other industrialized countries have
committed to providing financial assistance for
environmental initiatives through a variety of multilateral
agreements (e.g., the Montreal Protocol , the U.N.
Framework Convention on Climate Change , and the
U.N. Convention to Combat Desertification ).
International financial assistance takes many forms, from
fiscal transfers to market transactions, and includes official
development assistance, contributions to multilateral
development banks (MDBs) and other international
financial institutions, export credits, loan guarantees,
insurance products, and foreign direct investment.
In February 2008, Japan, the United Kingdom, and the
United States announced their intention to create a set of
funds at the MDBs to help developing countries “bridge the
gap between dirty and clean energy” and “boost the World
Bank’s ability to help developing countries tackle climate
change” (Henry Paulson, et al., “Financial Bridge from
Dirty to Clean,” Financial Times, February 7, 2008). The
World Bank held the first design meeting for the proposed
Climate Investment Funds (CIFs) in March 2008 in Paris,
France. Two subsequent meetings were held in
Washington, DC, and Potsdam, Germany, and on May 23,
2008, representatives from 40 developing and industrialized
countries reached agreement on the funds’ design and
duration. (The CIFs were programmed to sunset upon the
commencement of the Green Climate Fund in the U.N.
Framework Convention on Climate Change [UNFCCC].)
The CIFs are implemented through a partnership of the
MDBs and governed by representatives from both the
contributor and recipient countries. The role of governance
for the CIFs is to approve investment plans, programming,
and the allocation of financial resources and to provide
guidance, performance evaluation, and reporting. It is
further tasked with ensuring that the strategic orientation of
the CIFs is guided by the principles of the UNFCCC. The
organizational structure of the CIFs is balanced between
contributor and developing countries. All decisions are
made by consensus. Other international organizations, the
private sector, and civil society representatives are included
as observers. All observer roles are “active,” allowing them
to take the floor, propose agenda items, and recommend
experts but not to vote. The governance structure of the
CIFs includes the following: a Trust Fund Committee, an
MDB Committee, a Partnership Forum, an Administrative
Unit, and the Trustee (the World Bank).
The United States pledged $2 billion to the CIFs in 2008.
All U.S. funding is subject to annual congressional
appropriations, and payments are made by the U.S.
Treasury to the World Bank as trustee for the CIFs.
Appropriations have varied widely over the years, largely
reflecting budget trends. Through fiscal year (FY) 2015, the
United States has contributed approximately $1.77 billion
to the CIFs. The Administration’s FY2016 budget request
includes $170.7 million for the CTF and $59.6 million for
the SCF. If appropriated, this request would fulfill the
United States’ 2008 pledge. See Table 1 for a summary of
U.S. contributions to the CIFs.
www.crs.gov | 7-5700
The Climate Investment Funds (CIFs)
Table 1. U.S. Contributions to the CIFs by Fiscal Year
Source: CRS, from the U.S. Department of the Treasury.
The Clean Technology Fund
The CTF was established in 2008 to provide scaled-up
financing to middle income countries to contribute to the
demonstration, deployment, and transfer of low-carbon
technologies with the potential for long-term greenhouse
gas emissions savings. CTF concessional financing,
channeled through five partner MDBs, focuses on largescale, country-led projects in renewable energy, energy
efficiency, and transport.
• Contributor countries have pledged $5.3 billion to the
CTF since 2008.
• The CTF supports 134 projects and programs totaling
$6.1 billion and expects co-financing of $51 billion from
• $3.9 billion is approved for 70 projects, leveraging $44
billion in co-financing, to deliver 16.6 gigawatts of
renewable energy capacity, of which 2.2 gigawatts is
• CTF investments are projected to result in
approximately 1.7 billion tons of greenhouse gas
emission reductions over their lifecycle (i.e., equivalent
to emissions from approximately 550 million cars).
The CTF differs from other mitigation-focused, multilateral
climate instruments by focusing on larger transactions in a
smaller number of countries. The CTF aims to drive down
technology costs, stimulate private sector participation, and
catalyze transformations that can be replicated elsewhere.
The CTF is currently operational in 19 countries and one
region and includes plans in Chile, Colombia, Egypt, India,
Indonesia, Kazakhstan, Mexico, Morocco, Nigeria, the
Philippines, South Africa, Thailand, Turkey, Ukraine, and
Vietnam and one regional investment plan in the Middle
East and North Africa covering Algeria, Egypt, Jordan,
Morocco, and Tunisia. Projects include support for wind
energy, urban public transportation systems, solar water
heaters, smart-grid development, and concentrating solar
thermal power programs, among others.
The Strategic Climate Fund
The SCF aims to help developing countries prepare for
climate change by promoting low-carbon, climate-resilient
development. Three targeted programs provide grants and
concessional loans to pilot new approaches aimed at
The Forest Investment Program (FIP). The FIP, approved
in May 2009, supports developing countries’ efforts to
reduce emissions from deforestation and forest degradation.
It provides financing for managing forests and for educating
indigenous and local communities about national forest
The Pilot Program for Climate Resilience (PPCR). The
PPRC, approved in November 2008, was the first program
under the SCF to become operational. It supports ways to
integrate climate risk and resilience into the development
strategies of low-income countries. It finances efforts to
provide technical assistance to help with capacity building,
policy reform, and sector investment.
The Program for Scaling-Up Renewable Energy in Low
Income Countries (SREP). The SREP, approved in May
2009, supports projects that demonstrate the social,
economic, and environmental viability of low-carbon
development pathways in the energy sector. It seeks to
create new economic opportunities and increase energy
access through the production and use of renewable energy.
Issues for Congress
Congressional committees of jurisdiction over the CIFs
include the U.S. House of Representatives Committees on
Foreign Affairs, Financial Services, and Appropriations and
the U.S. Senate Committees on Foreign Relations and
Appropriations. The CIFs, as a part of U.S. multilateral
assistance, are managed by the U.S. Department of the
Treasury and are funded through the Administration’s
Executive Budget, Function 150 account, for State, Foreign
Operations, and Related Programs.
As Congress considers potential authorizations and/or
appropriations for the CIFs, it may have questions
concerning existing bilateral and multilateral programs that
address international environmental issues. Some concerns
may include the cost, purpose, direction, efficiency, and
effectiveness of these programs, as well as the relationship
between international development assistance for the
environment and the interests of industry, investors,
humanitarian efforts, national security, and international
leadership. For more discussion on the benefits and costs of
international environmental assistance, see CRS Report
R41845, The Global Climate Change Initiative (GCCI):
Budget Authority and Request, FY2010-FY2016.
Richard K. Lattanzio, firstname.lastname@example.org, 7-1754
www.crs.gov | 7-5700