Consortium to manage 160 million euro fund for climate resiliency in developing countries
A consortium of Dutch development bank FMO, development organisation SNV, World Wide Fund for Nature and Climate Fund Managers has won the tender by the Dutch government to manage a 160 million euro Dutch Fund for Climate and Development (DFCD).
This pioneering partnership of non-governmental organisations and financiers aims to help developing countries build climate resilient economies.
The tender award was announced by the Dutch government on 23 May.
It is revolutionary that a development finance institution, a private sector investment manager, a conservation NGO, and a development NGO work together on a fund of such scale, within the scope of climate finance.
The main objective is to utilize the full 160 million euro to accelerate the flow climate-resilient investments and make more projects bankable by attracting and deploying public and private capital in well-designed and impactful climate-relevant projects, with a focus on climate-resilient water systems and freshwater ecosystems.
The consortium will adopt a ‘landscape’ strategy for deal origination and execution. An example of this strategy can be the Kafue Flats in Zambia.
The region has potential for improvement of water availability through eco-system restoration (grant-funded), the development of a water treatment facility (bankable), and introduction of water efficiency measures (bankable), investment cases have also been made possible for expanded agricultural activity and aquaculture.
Helping local economies
Peter van Mierlo, Chief Executive Officer FMO: "We are very proud to have been entrusted with this initiative by the Dutch government. It allows us to improve climate resilience of landscapes and their vulnerable inhabitants in developing countries."
Meike van Ginneken, Chief Executive Officer SNV emphasize the potential of the fund to protect poor communities. : "They are the most vulnerable to the devastating effects of climate change. Improving their climate resilience requires financing and expertise, as well as market-based approaches to ensure sustainability in development impact."
Andrew Robert Johnstone, Chief Executive Officer Climate Fund Managers mentions the magnifying effects of blending finance. "We can target water and sanitation sectors in a world of increasing water scarcity and water pollution. This initiative allows the use of blended finance to magnify the impact of investment capital."
The Dutch Fund for Climate and Development (DFCD) allows for investments in projects aimed at climate adaptation and prevention in developing countries. Herewith, the DFCD presents an important additional instrument for the Dutch government’s efforts in contributing to the Paris Agreement and the Sustainable Development Goals (SDGs).