Markets working to support sustainable development

Strategic Climate Fund (SCF)

The Strategic Climate Fund (SCF) is one of two Climate Investment Funds administered by Multilateral Development Banks (MDBs) and is designed to fund and pilot ‘new approaches with potential for scaled-up, transformational action aimed at a specific climate change challenge or sectoral response’.

The MDBs involved are: African Development Bank; Asian Development Bank; European Bank for Reconstruction and Development; Inter-American Development Bank; World Bank Group. In total the SCF commands a budget of US$ 1.9 billion and invests this through 3 targeted programmes:

  1. Pilot Program for Climate Resilience  (PPCR). Designed to ‘mainstream resilience in development planning’ – it channels US$1.3 billion in 19 countries (including 2 regions; caribbean and pacific).  Projects are underway in Bangladesh, Bolivia, Cambodia, Mozambique, Nepal, Niger, Tajikistan, Yemen, Zambia, and in the Caribbean and South Pacific regions.
  2. Forest Investment Program (FIP). The FIP supports developing country efforts to reduce deforestation and forest degradation and promote sustainable forest management that leads to emissions reductions and enhancement of forest carbon stocks (REDD+).  There are currently 8 'pilot' countries with total funding of US$ 639 million in: Brazil, Burkina Faso, DRC, Ghana, Indonesia, Laos, Mexico and Peru.
  3. Scaling-up Renewable Energy in Low Income Countries (SREP). Designed to ‘create economic opportunity and increase energy access through renewables’, there are 6 pilots in Ethiopia, Honduras, Kenya, Liberia, Maldives, Mali and Nepal, and Tanzania with total funding of US$ 505 million.

Funding for each programme is channelled through MDBs in partnership with national or regional agencies.

Observers for each programme are drawn from UN Agencies, GEF, civil society, private sector and (where appropriate) indigenous peoples. Observers do not actively make decisions on the investment funds, however they are present at meetings and can make contributions from the ‘floor’ as well as recommend experts for consultation purposes.

Market coverage: 

PPCR: nine pilot countries (Bangladesh, Bolivia, Cambodia, Mozambique, Nepal, Niger, Tajikistand, Yemen, Zambia) and two regional programs (Caribbean and Pacific). Pledging level (March 2013) = US$1.3billion.

FIP: eight pilot countries (Brazil, Burkina Faso, Democratic Republic of Congo, Ghana, Indonesia, Lao PDR, Mexico, Peru). Pledging level (March 31, 2011) = US$639 million.

SREP: 8 pilot countries - Ethiopia, Honduras (US$375,000), Kenya, Maldives (US$315,500), Mali (US$200,000), Nepal (US$375,000), Tanzania and Liberia.

Further details can be found through the semi-annual reports for each component (June 2011) available to download through the links provided below.

Background information: 

The SCF forms one part of a pair of funds that fall under the Climate Investment funds (the other being the Clean Technology Fund). These climate investment funds are a ‘pair of funds to help developing countries pilot low-emissions and climate resilient development’. They are designed to leverage private sector financing by demonstrating and deploying new technologies and investments – so reducing some of the initial risks for the private sector. For every US$1 of CIF, US$8.4 is leveraged from other sources so helping to ‘bridge the financing and learning gap between now and a post-2012 global climate change agreement’. The funds were approved by the World Bank’s Board of Directors on 1 July 2008.

In September 2008 donor countries pledged to support the funds - in total they pledged US$ 6.4 billion. This is channelled through Multilateral Development Banks: African Development Bank; Asian Development Bank; European Bank for Reconstruction and Development; Inter-American Development Bank; World Bank Group (including the International Finance Corporation (IFC)).

Funding source: 

Donor countries (all figures are US$).

Australia (135m); Canada  (97m); Denmark (38m); France (300m); Germany (813m); Japan  (1.2bn); South Korea (3m); Netherlands (76m); Norway (194m); Spain (152m); Sweden (92m); Switzerland (20m); UK (1.414bn); USA  (2bn).