San Francisco – November 25, 2024 – The Catalytic Climate Finance Facility (CC Facility), a partnership between Climate Policy Initiative (CPI) and Convergence, announced its second cohort of market-ready blended finance vehicles today. The CC Facility will grant the selected five grantees USD 2 million to test, structure, launch, and expand solutions. These include the P-REC Aggregation Facility (2021 Lab class) and the Catalyst Fund (2023 Lab class).

These vehicles offer diverse climate finance solutions across various regions, including Sub-Saharan Africa, Southeast Asia, Latin America, and the Caribbean. They support a range of climate initiatives, such as climate-resilient agriculture, marine conservation, biodiversity, climate adaptation, and renewable energy, through blended finance solutions, including debt, project finance platforms, and venture capital.

“The new CC Facility class is a direct response to the urgency for climate action. The need to mobilize trillions of dollars annually, particularly in high-risk emerging markets, is paramount. By focusing on critical areas like unlocking private capital, de-risking investments, and scaling climate finance, we are aligning our efforts with the global community’s ambition,” said Barbara Buchner, CPI’s Global Managing Director. “The CC Facility is poised to address this challenge head-on.”

The selected vehicles have undergone a rigorous selection process, emerging from a pool of 243 submissions. Grantees will also receive customized technical assistance over 12 to 18 months to help accelerate the market roll-out of their blended climate finance solutions. 

“The CC Facility portfolio of financial vehicles, spanning climate-resilient agriculture, marine conservation, and renewable energy, is a testament to our commitment to steer the field of blended finance toward solving climate and development goals,” said Convergence CEO Joan Larrea. “The CC Facility is a systemic approach to catalyzing private sector investment in a sustainable future. We are proud to be at the forefront of the global climate finance movement.”

With funding from three anchor donors—Bill & Melinda Gates Foundation, Global Affairs Canada, and Australia’s Department of Foreign Affairs and Trade—the CC Facility targets one of the main barriers to scaling a climate blended finance vehicle: the acceleration stage, when solutions face a critical valley of death as they try to scale to broader market implementation. Following the selection of this first class of blended finance vehicles, the CC Facility will open for its next cycle of applications on March 10, 2025.

“Canada congratulates the five grantees and looks forward to the launch of these blended finance vehicles that will support solar and hydro projects in fragile African states, as well as biodiversity, food security, and smallholder farmer livelihoods across Africa and Southeast Asia. Thanks to the partnership and expertise of Convergence and Climate Policy Initiative, the selection of these grantees is a testament to the catalytic potential of the private sector to deliver meaningful climate results,” said Cam Do, Director General of Development Finance, Global Affairs Canada.

ADAPTA Climate Finance Facility (ACF) will be a USD 50 million debt facility aimed at transforming agricultural finance and food security in Sub-Saharan Africa. By leveraging proprietary climate risk assessment technology, ACF aims to de-risk lending to smallholder farmers in Sub-Saharan Africa while promoting regenerative agricultural practices. The facility aims to enhance food security and farmer incomes while building regional climate resilience, beginning in Kenya.

Biodiversity Bridge Vehicle (BBV) is envisioned to be a USD 100 million project finance platform that generates carbon and biodiversity credits through mixed-species afforestation projects. The vehicle will build on project developer Ponterra’s approach to developing biodiverse carbon projects by harnessing biodiversity monetization alongside carbon revenues.

Blue Alliance Blended Finance Vehicle is a USD 65 million blended facility that will support 2 million ha of Marine Protected Areas (MPAs) across Sub-Saharan Africa and Southeast Asia. The facility will enhance MPAs operations and develop reef-positive businesses in the Blue Economy that will alleviate poverty and generate long-term income for MPAs in sectors such as community-based aquaculture, ecotourism, sustainable fisheries, and blue carbon projects.

The Catalyst Fund Resilience I is a USD 40 million venture capital fund investing in pre-seed climate adaptation startups in Africa, with follow-on investments at seed and Series A stages. The fund targets three key areas: fintech for climate resilience, sustainable livelihoods, and climate-smart essential services. 

The P-REC Aggregation Facility (PAF) is envisioned to be a USD 11 million pilot project finance facility that mobilizes capital for solar and hydro mini-grid projects across 14 fragile countries in Sub-Saharan Africa through the origination, aggregation, and sale of Peace Renewable Energy Certificates (P-RECs) P-RECs are high-quality I-RECs generated from projects in fragile, climate-vulnerable, energy-poor countries. They are sold at a premium over traditional I-RECs due to their high social and environmental additionality. 

The Catalytic Climate Finance Facility (CC Facility) accelerates the implementation of high-impact, ready-to-scale financial structures through a suite of services that include grant funding, customized technical support, and a market-building learning hub. The CC Facility fills a market gap and reduces market fragmentation to mobilize private capital for climate action in developing economies. The CC Facility is a partnership between Climate Policy Initiative and Convergence.

The CC Facility has raised USD 13 million to date and is fundraising for a second round of USD 10 million as we move toward our goal of reaching USD 100 million in size over the next few years. 

Convergence is the global network for blended finance. On top of market acceleration through its Design Funding program, Convergence generates blended finance data, intelligence, and deal flow to increase private sector investment in developing countries. Convergence’s global membership includes over 160 public, private, and philanthropic investors as well as sponsors of transactions and funds.

Convergence’s Design Funding Program operates as a market acceleration tool providing early-stage capital to support blended finance solutions in frontier markets and nascent sectors to accelerate the number of investible transactions in market targeting SDGs.

CPI is an analysis and advisory organization with deep expertise in finance and policy. Our mission is to help governments, businesses, and financial institutions drive economic growth while addressing climate change. CPI has seven offices around the world, including Brazil, India, Indonesia, South Africa, the United Kingdom, and the United States.

CPI serves as the Secretariat for the Global Innovation Lab for Climate Finance (the Lab), an incubator program that develops innovative financial mechanisms to drive private investments into climate change mitigation and adaptation in developing economies.

Sijia Yi
Head of Communications
Convergence Blended Finance
sijia.yi@convergence.finance 

Júlio Lubianco
Communications Manager
Climate Policy Initiative
julio.lubianco@cpiglobal.org