Climate Change Fund
What is the fund all about?
The Climate Change Fund was established in May 2008 to facilitate greater investments in developing member countries (DMCs) to effectively address the causes and consequences of climate change, by strengthening support to low-carbon and climate-resilient development in DMCs. The fund provides financing through four modalities: grant component of investments, technical assistance (stand-alone and piggy-back or linked to loan), and direct charge. It has four components: (i) adaptation, (ii) clean energy development, (iii) reduced emissions from deforestation and forest degradation, and improved land use management (REDD+ and land use); and (iv) climate finance readiness.
What are the fund's priorities?
The fund focuses on three areas:
- Clean energy, sustainable transport and low-carbon urban development — The fund aims to help DMCs achieve energy security and transition to low carbon economies. This is accomplished through cost effective investments, especially in pre-commercial clean energy (CE) technologies, that result in greenhouse gas (GHG) mitigation. Financial, policy and institutional reforms, as well as regulatory frameworks that encourage CE development and energy access, are also supported by the fund;
- Reduced emission from deforestation and degradation and improved land use management — The fund prioritizes interventions that maintain, restore and enhance carbon-rich natural ecosystems, especially forests, and prevent these carbon sinks from becoming sources of GHG emissions. It also aims to maximizes co-benefits from sustainable development and the conservation of biodiversity, and generation of other ecosystem services and ecological processes; and
- Adaptation — The fund focuses on support for assessing climate risks and adaptation options for at risk investment projects (CRAs), enhancing the climate resilience of investment projects (i.e., “adaptation in projects”); and strengthening climate resilience in key sectors in DMCs (i.e., ”adaptation through projects”).
What activities are supported by the fund?
The following types of activities may qualify for the fund's support:
- Preparation of relevant strategies or action plans for ADB, its regional departments, and DMCs;
- Investment in climate change mitigation or adaptation measures;
- Development of knowledge products and services related to climate change;
- Facilitating knowledge management activities, including regional conferences and workshops; and
- Funding to off-set ADB’s corporate carbon footprint.
Who is eligible to receive funding?
All DMCs are eligible for the fund resources.
Project proposals are submitted by ADB user departments to the Climate Change Steering Committee through the fund secretariat. Project proposals are reviewed by the working groups (i.e., Clean Energy Working Group and Adaptation and Land Use Working Group) who provide the recommendations on the applications for the fund allocation to the CCSC. The CCSC approves the fund allocations to projects. In general, applications are reviewed in six batches and are due on 31 January, 31 March, 31 May, 31 July, 30 September, and 30 November. Direct charge applications are reviewed on ongoing basis.
Who supports the fund?
ADB is working with regional and private partners in support of this fund, which is financed by ADB's net income and ordinary capital resources (OCR).
The fund has received a total of $74 million ADB financing. As of 30 June 2018, $65.2 million of the $74 million total fund resources has been allocated to 99 projects—40 on CE development, 48 on adaptation, 10 on REDD+ and land use, and 1 on climate finance readiness.