Climate and Peace Investment Fund, Preparation Activities [C183]

NDF supports the preparation activities of the Climate and Peace Investment Fund (CPIF), envisioned as a dedicated, climate and peace-focused investment facility to be established with the objective of accelerating the deployment of investments in climate adaptation and mitigation projects in underserved countries at the intersection of climate change and fragility.

Objective

Fragile and conflict-affected countries contribute the least of global greenhouse gas emissions (GHG), yet face among the world’s most severe climate hazards, while receiving limited international climate finance. Populations in these countries are amongst the most vulnerable to the impacts of climate change, expected to disproportionately suffer from climate change due to their geographic locations, dependence of agriculture and weak coping and adaptive capacities. As temperatures are projected to increase more in these countries than the global average, they are expected to face increasingly extreme weather conditions and increased fragility due to climate change.

Despite facing the world’s highest vulnerability to climate change, fragile and conflict-affected countries receive less than 10% of total public and private climate finance. The financing gap is critical, as current climate finance flows to fragile and conflict-affected countries are estimated at only 26% of annual financing needs. As global security challenges persist, coupled with increased volatility and uncertainty in the global markets, climate change impacts are further threatening stability, disrupting livelihoods, intensifying displacement, and worsening resource scarcity in many countries.

NDF has joined Incofin Investment Management, the Peace Dividend Initiative, the United Nations Development Programme, and the Swiss Agency for Development and Cooperation to design and develop the Climate and Peace Investment Fund (CPIF). The objective of CPIF is to increase access to finance for entrepreneurs in building climate and peace-supporting businesses in lower-income countries and conflict-affected regions. CPIF will provide the capacity and resources for these vulnerable communities to invest in their resilience to climate change in a sustainable manner, while also reducing environmental stress and creating sustainable paths from climate action.

Outcomes

The project consists of activities supporting the design, launch and operationalization of the investment facility. The overarching objective of CPIF is to fill the structural market gap by channelling risk-tolerant financial resources and technical assistance to businesses in lower-income countries and conflict-affected regions, whose operations are vital for local adaptation, mitigation, and long-term stability.

Financing

NDF is providing a EUR 500,000 Booster Grant for the implementation of the CPIF Preparation Activities.