Climate Investment Funds invites countries to join $1billion effort to decarbonise the industry

On October 3, 2024, during the Ministerial day of the 15^th Clean Energy Ministerial (CEM15), the Climate Investment Funds, one of the world’s largest multilateral climate funds, announced the deployment of up to $1 billion in funding as part of CIF’s Industry Decarbonization investment program. CIF also launched a call for expressions of interest, inviting developing countries to participate in this first-of-its-kind program. The Industry Decarbonisation investment program offers unprecedented private sector engagement - encouraging businesses, governments, and multilateral development banks to work hand in hand to decarbonise heavy-emitting sectors and reach climate goals.

The industrial sector currently represents one-quarter of global greenhouse gas emissions, and this number is climbing fast. Developing countries rely on industrial output to grow their economies. For example, global demand for aluminium is expected to rise by 80 per cent by 2050. Cement and steel are also increasingly needed, notably to support the renewable energy transition.

Tariye Gbadegesin, CEO of Climate Investment Funds, said, “The future depends on decarbonizing heavy emitting sectors. To meet our climate goals, we need the industry’s emissions to decline by 20 per cent by 2030 and 93 per cent by 2050. Crucially, industrial decarbonization and green supply chain jobs can drive a just and prosperous transition. This is what CIF was created for to accelerate future technologies and solve our greatest climate challenges."

"I am thrilled that CIF has launched the call for expressions of interest in our Industry Decarbonization program today. The program is set to make available up to $1 billion in concessional funding to be invested alongside the multilateral development banks, governments, and forward-thinking businesses that are eager to innovate and test new solutions for the greening industry. I’m genuinely excited to see CIF’s unique and proven programmatic approach make a meaningful impact in this vital sector.”

 CIF’s Industry Decarbonisation program will invest in pioneering low-carbon pathways in these sectors and more to reduce the climate impact of heavy-emitting industries. The program will spur innovation, provide proof of concepts for new technologies, and advance a just transition. CIF’s predictable and flexible concessional funding will be deployed through partner multilateral development banks.

Minister Kerry McCarthy, Minister for Climate, Department for Energy Security and Net Zero, United Kingdom, said, “I’m proud that the UK is backing this cutting-edge programme that will help attract much-needed investments into developing countries to decarbonise industries. Speeding up the decarbonisation of steel, iron and cement in emerging markets around the world is how we will reduce global emissions and accelerate the clean energy transition.”

To ensure seamless public/private collaboration, private sector activities will be integrated into the larger programmatic approach from inception. Governments are encouraged to work closely with private sector counterparts and, in a first for CIF, may even elect to submit joint expressions of interest with private sector organisations. The Industry Decarbonization program includes a dedicated private sector set-aside: up to 100 per cent of total financing can be assigned to projects led by the private sector or that crowd in significant private sector co-investments, with a minimum allocation of 50 per cent.

Anthony Nyong, Director of Climate Change and Green Growth at the African Development Bank, said, “The African Development Bank is fully committed to Africa’s Industry Decarbonisation agenda, in line with our High5 priority focus area on “Industrialize Africa” and as indicated in our 2021-2030 Strategic Framework on Climate Change and Green Growth. In this regard, we are keen to partner with CIF to advance industry decarbonisation across developing nations, particularly on the African continent. As you may know, our continent holds immense potential for green industrialisation, which is still in its expansion stage, but it presents us with a unique opportunity to lower carbon emissions in Africa. By promoting industry decarbonisation now, we can chart a sustainable course that fuels economic growth, leading to low-carbon development and a net-zero future. Through collaboration with governments and the private sector, we are committed to accelerating the adoption of low-carbon technologies and ensuring inclusive, green job creation.” 

The Industry Decarbonisation program deploys ambitious social safeguards in line with CIF’s just transition principles, ensuring the labour force is extensively engaged in the process, and green job opportunities are inclusive. Investment plans will facilitate adaptative measures, employment promotion, and worker training. Additionally, project designs must analyse gender gaps and barriers faced by women and other marginalised groups, with specific actions in response and indicators to monitor progress.

Bruno Carrasco, Director General of the Climate Change and Sustainable Development Department of the Asian Development Bank, said, “As the Asia-Pacific region accounts for more than half of the world’s greenhouse gas emissions, ADB can play a pivotal role in driving the transition to cleaner energy systems and decarbonizing hard-to-abate sectors. The launch of CIF’s Industry Decarbonisation program can significantly amplify our efforts to promote a prosperous, inclusive, resilient, and sustainable future for Asia and the Pacific. Through this program, we will advance transformative, low-carbon country pathways that position the region at the forefront of global decarbonization efforts.” 

CIF’s Industry Decarbonisation investment program is part of the $8.6 billion Clean Technology Fund. The expressions of interest received will be evaluated by an independent expert panel that will submit recommendations to the Clean Technology Fund’s Trust Fund Committee. Selected countries will be invited to develop investment plans, setting out strategically linked investments unified by a transformative vision.

Harry Boyd-Carpenter, Managing Director, Climate Strategy and Delivery the European Bank for Reconstruction and Development, said, “The EBRD has been a strong supporter of the CIF’s Industry Decarbonization investment program since its very beginning. We are delighted that this first in its kind multilateral investment program, with a strong focus on the private sector, is launched today. We look forward to working with the CIF to support our regions in decarbonising hard-to-abate industries and setting a pathway towards green industrial production.”

Eligible countries are invited to submit expressions of interest until January 17, 2025, on CIF.org.

Jamie Fergusson, Global Director, Climate Business IFC, said,  “At IFC, we are excited to build on our longstanding partnership with CIF through the launch of the CIF Industry Decarbonisation Program. This initiative represents a critical step in tackling emissions from hard-to-abate sectors, with the private sector leading the transition. By combining CIF’s concessional finance with IFC’s private sector expertise, we are committed to unlocking innovative, large-scale investments that will accelerate the transition to a low-carbon, inclusive, and climate-resilient industrial future, fostering economic growth and opening new markets for green investments.”