Clean Technology Fund

Description

The Clean Technology Fund (CTF) was created in 2008 to establish new markets and scale-up clean technology, resilient infrastructure, and sustainable forest management in middle- and low-income countries. Since then, the U.S. has contributed $2 billion to the CTFs.

Use of Funds

The CTF works exclusively with the Multilateral Development Banks (MDBs), providing investments at scale to mobilize the collective technical capacity and financial strength to support frontier/innovative investments, business models, policy reforms, and market creation to drive transformational impact in developing countries. The CTF’s financing tools include concessional debt, equity, guarantees, local currency financing, and grants to allow the MDBs to move into new markets, take on more risk, and mobilize billions in additional private sector investment.

Justification

• Energy consumption is the largest source of greenhouse gas (GHG) emissions, and emerging and developing economies will account for the bulk of GHG emissions growth in the future.
• The CTF portfolio consists of 161 projects with $3 billion of funding. Key results:
  • 9 MTCO₂ per year greenhouse gas emission reductions from 52 projects.
  • $24.2 billion co-financing leveraged for 36 projects.
  • 1 GW of installed renewable energy capacity from 42 projects.
• The CTF is underpinned by an effective administrative and governance structure that is efficient and highly agile, including these important structures:
  • Representative governance structure.
  • Platform for observers.
  • Emphasis on gender equality.
  • Support to indigenous peoples and local communities through a Dedicated Grant Mechanism.
• The Accelerating Coal Transition (ACT) investment program was established in early 2021. ACT offers a comprehensive toolkit to support countries transitioning from coal to clean energy, tackling challenges linked to national strategies, people and communities, and land and infrastructure.