Clean Technology Fund

Clean Technology Fund

Summary

The Clean Technology Fund (CTF) is one of two multi-donor trust funds under the World Bank-hosted Climate Investment Funds (CIF) framework. It provides scaled-up concessional financing to support the demonstration, deployment, and transfer of low-carbon technologies with high potential for long-term greenhouse gas emissions reductions. CTF investments focus on renewable energy, energy efficiency, and clean transport in middle-income and developing countries. The fund has been instrumental in pioneering innovative clean technologies, such as concentrated solar power (CSP), and more recently, in supporting battery storage, grid modernization, and climate-smart urban infrastructure. CTF is implemented through a partnership with major Multilateral Development Banks, including the African Development Bank, Asian Development Bank, European Bank for Reconstruction and Development, Inter-American Development Bank, and the World Bank Group. It supports over 20 country investment programmes and multiple regional initiatives, encompassing more than 100 individual projects.

Basic Description

Name of the Fund Clean Technology Fund (CTF)
Official Fund Website https://www.climateinvestmentfunds.org/topics/clean-technologies
Date Created
Date fund proposed: February 2008.
Date fund made operational: 1 July 2008 (approved by the World Bank Board of Directors).
Proposed Life of Fund The Clean Technology Fund (CTF) is part of the CIFs, which were originally designed with a ‘sunset clause,’ stipulating that operations would wind down once a new financial architecture under the UNFCCC, such as the Green Climate Fund (GCF), became fully operational. The clause allows for any remaining CTF funds to be transferred to a fund with similar objectives. However, given ongoing demand, a strong implementation track record, and the complementary role of the CIF alongside the GCF, the CTF continues to operate with new programming approved by its governing body. As of now, there is no active plan to implement the sunset clause or transfer remaining funds.
Objectives The CTF promotes scaled-up financing for the demonstration, deployment, and transfer of low-carbon technologies with strong potential for long-term greenhouse gas emissions reductions. Its objectives include:

  • Provide positive incentives, through public and private sector investments, for the demonstration of low carbon development and mitigation of greenhouse gas emissions
  • Fund low carbon programmes and projects that are embedded in national plans and strategies, scaling up development and accelerating the diffusion and transfer of clean technologies
  • Realise environmental and social co-benefits, illustrating the potential for low-carbon technologies in contributing to sustainable development and the Millennium Development Goals
  • Support international cooperation on climate change
  • Utilise skills and capabilities of the MDBs to raise and deliver new and additional resources, including official and concessional funding, at significant scale
  • Share experiences and lessons learned in responding to climate change challenges.

To date, CTF-financed projects are expected to reduce over 100 million tons of greenhouse gas emissions annually, while catalyzing transformational change in energy and transport systems in developing and middle-income countries.
Financial inputs and fund size The CTF Trust Fund has received approximately USD 8.9 billion in contributions from nine donor countries: Australia, Canada, France, Germany, Japan, Spain, Sweden, the United Kingdom, and the United States. These concessional resources are deployed through six MDBs; as of end 2024, it had approved 178 projects and programmes for USD 5.8 billion.
Finance provided by the CIF may be reported as Official Development Assistance (ODA) by MDBs if:

  1. It is provided to a country on the OECD-DAC list of ODA-eligible recipients.
  2. It is primarily aimed at promoting the economic development and welfare of the recipient.
  3. It meets the concessionality thresholds set by the OECD, which vary depending on the income level of the recipient country and the type of finance..

The classification depends on the specific terms of the finance, the recipient country, and the concessional nature of the instrument used.
Activities Supported Activities supported by the CTF include projects and programmes within the following sectors:

  • Power Sector: renewable energy and highly efficient technologies to reduce carbon intensity
  • Transport Sector: efficiency and modal shifts
  • Energy Efficiency: buildings, industry, and agriculture.

Programming options include programmes and large-scale projects at:

  • Sectoral or sub-sectoral levels in a given country
  • Sub-national levels, focusing activity on particular provinces/states/municipalities
  • Regional levels, particularly where regional cooperation is required.

Additionally, there are options for private sector engagement or public-private partnerships. The Dedicated Private Sector Programs (DPSP) provides capital to finance high-impact, large-scale private sector projects in clean technology.

Administrating Organization

Secretariat or Administrative Unit The CIF Administrative Unit supports the work of the CTF Trust Fund Committee. It provides recommendations and reporting on operational and financial matters to the CIF governing bodies.

The Unit is housed in the World Bank Group’s Washington, DC offices and is comprised of a small professional and administrative staff.
Trustee The World Bank (International Bank for Reconstruction and Development) acts as Trustee for all CIF, including the CTF. It holds in trust, as a legal owner and administrator, the funds, assets and receipts that constitute the CTF Trust Fund, pursuant to the terms entered into with the contributors.

Fund Finance and Access Modalities

Conditions and Eligibility Requirements CTF is available to middle-income and developing countries.
To access CTF resources, countries must meet the following conditions:

  • Be ODA-eligible, as defined by OECD-DAC
  • Have an active country programme with a participating MDB
  • Show potential for significant greenhouse gas emissions reduction
  • Demonstrate government commitment to low-carbon development pathways
Accessing the Fund
Access Modalities – CTF funding is only accessible through MDBs (the World Bank Group, Inter-American Development Bank, African Development Bank, European Bank for Reconstruction and Development and the Asian Development Bank) acting as implementing partners.
Project eligibility is assessed on potential “transformative” effects as well as project viability in the absence of concessional finance. CTF programmes are intended to “stimulate lasting changes in the structure or function of a sector, sub-sector or market” by improving internal rates of return on low GHG emissions investments.
Public Sector

  • MDBs jointly assess interested eligible countries’ investment potential to meet CTF investment criteria.
  • Where there is a potential fit, MDBs conduct a joint exercise involving other relevant development partners, to discuss with interested governments, private industries and other stakeholders how CTF may help finance scaled-up low carbon activities.
  • Under the leadership of the recipient country, an investment plan (essentially the MDBs’ “business plan”) is produced.
  • The CTF Trust Fund Committee reviews the investment plan with a view to endorsing a resource envelope for programmes/projects and authorising designated MDBs to proceed with development and preparation of individual investment operations for CTF co-financing.

Private Sector

  • Private sector proposals are submitted in the form of either a) individual large-scale projects (“Projects”) or b) programme envelopes which aggregate several small and medium sized projects each utilising less than USD 50 million of CTF funds and all having a shared focus and objective (“Programmes”).
  • Proposals explain how the Projects and Programmes are expected to contribute towards the objective of achieving transformational outcomes in a sector, sub-sector, country, sub-national region, sub-region, or region while demonstrating that these outcomes would not be possible without support from the CTF.
Financial Instruments – The CTF uses a blend of financial instruments, including grants, contingent grants, concessional loans, equity and guarantees to make investing in low carbon technologies more attractive to both public and private sector investors in developing countries. CTF financing provides a grant element tailored to cover the identifiable additional costs necessary to make the project viable, thereby providing the appropriate incentive to facilitate deployment of low carbon technologies at scale.

The terms of CTF financing are:

Harder concessional Softer concessional
Maturity (years) 20 40
Grace period (years) 10 10
Principal repayments (Yr 11-20) 10% 2%
Principal repayments (Yr 20-40) N/A 4%
MDB Fee 0.18% 0.18%
Service Charge Fiscal Year 09-10 0.75% 0.25%
Grant Element 45% 75%

Source: Climate Investment Funds ‘Clean Technology Fund Financing Products, Terms, and Review Procedures for Public Sector Operations‘, September 30th, 2015.
Accreditation process – There is no accreditation process for the CIF as only the MDBs can access and implement CIF funding, including for the CTF.
Overview of implementing entities – The World Bank Group, the African Development Bank, the Asian Development Bank, the European Development Bank, and the Inter-American Development Bank are the implementing entities for CTF investments.
Nature of recipient country involvement – CTF investment programmes are developed on a country-specific basis to achieve nationally-defined objectives. CTF investment plans build on existing country-owned strategies or action plans and demonstrate complementarity to activities under other available programmes, including those that are aimed at enhancing the enabling environment. The governments will play a central role in programming of the CTF’s public sector related projects and in donor coordination.
Allocation criteria – The share of funding allocated to an MDB will be based on country requests, the quality of proposals, the comparative advantage of the MDB and experience in a region/country.

The maximum total CTF preparation grant allocation for an investment plan or a project is USD 1 million.
Safeguards, Gender and Indigenous Peoples
Safeguards – All projects and programmes are subject to the environmental and social safeguards of the implementing MDBs. The MDBs apply “their own appropriate procedures in appraising, approving, supervising, monitoring and evaluating operations”.
Gender – CTF falls under the CIF Gender Policy and the CIF Gender Action Plan. While the Gender Policy provides a governance framework for gender integration in the CIF, the Gender Action Plan is “committed to mainstreaming gender in CIF policy and programming, in support of gender equality in climate resilient, low-carbon development investment across the CIF portfolio”. The CIF Gender Action Plan is currently in Phase 3 and has two main aims:

  1. to deepen upstream support to MDBs and countries on gender technical assistance for Investment Plan and project design
  2. to enhance gender monitoring and reporting, and knowledge and capacity.
Indigenous Peoples – CIF governance treats Indigenous Peoples as a core stakeholder group. While there is a separate CIF Gender Policy, there is no equivalent CIF Indigenous Peoples Policy. Instead, the existing policies and approaches of the MDBs implementing CTF projects and programmes apply.

Indigenous Peoples are granted representation in CIF governance as active observers. This status gives IPs have the opportunity to advocate on behalf of their constituents in the CIF Trust Fund Committees and the CTF Trust Fund Committee.

Fund Governance

Decision Making Structure CTF is governed by the CTF Trust Fund Committee and the MDB Committee.

CTF Trust Fund Committee
The CTF Trust Fund Committee is the decision-making body responsible for determining and overseeing the operations and activities of the CTF. The governance structure gives equal weight to representatives from donor and recipient countries.

Committee composition:

  • Eight representatives from donor countries, identified through a consultation with contributors;
  • Eight representatives from eligible recipient countries, identified through consultation with interested and eligible recipient countries;
  • One representative of a recipient country under consideration for a programme, project or investment plan for that period of deliberation;
  • One senior representative of the World Bank; and
  • One representative of the MDBs, to be decided by the MDB committee and rotating across MDBs.

Representatives from donor countries and eligible recipient countries are decision-making members, and each serve two-year terms. Terms are staggered so that not all members are replaced every two years. If there are less than eight donor countries contributing to the CTF in any given year, the number of donor country representatives is reduced to equal the number of actual donors contributing to the CTF. Representatives may be reappointed.

The responsibilities of the CTF Trust Fund Committee include:

  1. Approving CTF programming and pipeline priorities, operational criteria, and financing modalities
  2. Endorsing investments
  3. Approving allocation of CTF resources for programmes and projects
  4. Ensuring the strategic orientation of the CTF is guided by the principles of the UNFCCC.

The list of actual Trust Fund Committee members is available at: https://www.climateinvestmentfunds.org/cif_enc/about/directory/

MDB Committee
The MDB Committee facilitates collaboration, coordination and the exchange of information, knowledge, and experience among MDB partners.

The MDBs will rely on individual policies and procedures in developing and managing activities financed by the CTF, but will report directly to the CTF Trust Fund Committee on operational matters. The list of MDB focal points is available at: https://www.climateinvestmentfunds.org/cif_enc/about/directory

A graphic depicting the interactions between the CTF Trust Fund Committee and other CTF members/partners can be found at: https://www.climateinvestmentfunds.org/sites/cif_enc/files/2_governance_structure_ctf_tfc.png
Accountability Mechanisms CIF CIF has initiated and published dozens of independent evaluations, many focused on transformational change, gender, stakeholder engagement, and private sector mobilisation:

CTF
The internal monitoring and evaluation framework of the CTF is described in its Monitoring and Reporting Toolkit (2014). This toolkit provides “guidance and reporting tools for the core indicators, based on the Revised CTF Results Framework. It is intended to help the MDBs and country project/programme teams provide consistent accurate data and information of the projected results and actual achievements of CTF projects/programmes”. In addition, the toolkit has been designed to be inclusive: CTF country focal points, project/programme implementation units/teams, MDB task teams and other in-country stakeholders have the opportunity to assess progress at both national level and the project/programme level.
Participation of Observers and Stakeholders The CTF Trust Fund Committee invites stakeholders and observers to participate in its deliberations. These include institutional observers such as one representative each from the United Nations Framework Convention on Climate Change (UNFCCC), the United Nations Development Programme (UNDP), the United Nations Environment Programme (UNEP), and the Global Environment Facility (GEF), as well as representatives from contributor countries not currently serving as Committee members and eligible recipient countries.
In addition, active observers are formally designated from key stakeholder groups:

  • Two private sector representatives (one from a contributor country, one from a recipient country)
  • Two Indigenous Peoples representatives
  • Four civil society representatives (one from a developed country, and one each from Latin America, Asia, and Africa)

Active observers may request the floor to speak, propose agenda items, and recommend expert presenters for relevant sessions.
However, not all parts of CTF Committee meetings are open to observers. For example, deliberations on investment plans often occur in closed executive sessions, where only government members of the Committee and the MDBs are present.
The list of current active observers can be found at: https://www.cif.org/content/governance-structure-ctf Partnership Forum
The CIF Partnership Forum is a key convening platform that enables dialogue on the CIF’s strategic directions, results, and impacts. While historically held on an annual basis, recent editions (e.g. 2018 and 2023) reflect a non-fixed frequency.
Forum participants include a diverse range of stakeholders: donor and recipient country representatives, MDBs, UN agencies, the Global Environment Facility (GEF), the UNFCCC, the Adaptation Fund, bilateral development partners, Indigenous Peoples, civil society, private sector entities, youth, and technical experts.
The Forum promotes inclusive, multi-stakeholder engagement through plenary dialogues, thematic panels, and networking opportunities, and serves as a platform for shared learning and reflection on CIF’s impact in climate finance.
Transparency and Information Disclosure Since March 2016 the CTF has published open results data on its website. Gross fund disbursements are reported in the Trustee Reports on the Financial Status of the CTF, and presented at each CTF Trust Fund Committee meeting. Details on individual projects are made public and available at: https://www.climateinvestmentfunds.org/projects

Disclosure Policy
With respect to information disclosure, the CIF largely rely on the public information polices of the partner MDBs which implement CIF projects and programmes. In addition, in May 2009, the Trust Fund Committees approved a disclosure policy supporting in-country disclosure of country-owned investment plans and strategies (developed under the Trust Funds) prior to their submission to a CIF Committee for approval.
Proposed plans are also posted on the CIF website no later than three weeks prior to review of the proposal by a Committee. In the case of proposed programmes and projects, an information document describing the proposal is to be made public at least two weeks prior to a decision on the funding of the proposal.
The policy recognises that a country or a project proposer may have justifiable reasons for not publicly disclosing all information in an investment plan or project, and in exceptional cases, subject to Committee approval, certain information may be kept confidential.
Other Issues Raised Design
The CIF have been criticised for the speed with which they were designed, promoted and implemented. Specifically, the Partnership Forums are considered to inadequately include or consult civil society actors. Recommendations for a more formal role for civil society representatives have been made. The CIF have since expanded their active observer roles for civil society and Indigenous Peoples in governance structures. However, participation challenges remain for instance on limited influence in closed sessions (e.g., investment plan reviews) and asymmetries in access to technical information.
Furthermore, although the Fund recognises UNFCCC principles, the language of the CIF implies that fund policies are guided but not bound by those principles.
Costs
MDBs administrative and overhead charges have been a cause of concern for some governments. In fact, the CIF rely on MDBs for implementation, and their administrative fees (often ~4–5%) are seen by some as high.
Equity and Just Transition
Recent critiques from civil society organisations (CSOs), climate justice advocates, and independent research institutions, emphasise the need for more focus on social equity, just transition, and inclusive green growth.
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