New York, April 26, 2017— Today, during a meeting of the Global Innovation Lab for Climate Finance, the Dutch government announced EUR 10mn for an innovative facility that will enable private finance for otherwise difficult-to-fund water projects in emerging markets, starting with Kenya.

This news marks a key milestone in financing for water and climate adaptation. Climate change will lead to stress on water resources, especially in communities that are already vulnerable to water shortages. While the business case for investing in climate mitigation is increasingly evident with the rise of renewable energy and energy efficiency technologies, attracting private finance for climate adaptation projects has been more challenging. This is particularly true in the water sector and in nations with strained public resources.

The Water Financing Facility was developed within the auspices of the Global Innovation Lab for Climate Finance (the Lab), a public-private partnership that identifies, develops, and scales up transformative climate finance solutions. The Facility issues investment-grade water bonds to domestic institutional investors to support countries’ national water and climate priorities. It focuses on building infrastructure that improves access to safe and affordable water both today and into the future.

Joost Zuidberg of Cardano Development, the institution chosen to implement the Facility, said, “The Water Financing Facility addresses an endemic problem that we see with development projects: lack of long-term, local currency finance. We are enthusiastic to tackle this problem through this very well-designed Facility and see it make a positive impact for communities.”

The national-level facility in Kenya has set a target to periodically issue bonds for water and sanitation projects, with a first to be realized by the end of this year. The global facility aims for expansion to two more countries, planned for the following year contingent on raising an additional EUR 21 million in donor funds. When the Water Financing Facility scales to eight to ten countries, it will mobilize approximately EUR 1.2 billion in bonds for climate-resilient water projects.

Paul van de Logt, Senior Policy Advisor on Climate Finance of the Netherlands Ministry for Foreign Affairs and Advisor for the Lab, said, “The Netherlands is committed to support financial innovation in addressing climate and development challenges. We have been proud to sponsor this project’s development within the Lab, and now to see it mark an important milestone in private sector involvement in adaptation.”

For more information on the Facility, visit: http://climatefinancelab.org/idea/water-finance/

The Global Innovation Lab for Climate Finance identifies, develops, and pilots transformative climate finance instruments that can drive billions of dollars of private investment in climate change mitigation and adaptation in developing countries. Climate Policy Initiative serves as secretariat and analytical provider for the Lab.