CDC commits €30m to green funds

The UK government-owned development finance institution has pledged capital to two funds addressing climate change and energy efficiency in some of the world’s poorest countries.

CDC Group (CDC), the UK development finance institution, has agreed to invest €25 million in the Interact Climate Change Facility (ICCF), a joint venture between 14 European development finance institutions, including the likes of European Investment Bank and FINNFUND as well as CDC.

ICCF, which has raised a total of €225 million to date, will provide long-term loans, guarantees and mezzanine finance of between €30 million and €60 million to private sector projects aiming to reduce climate change by cutting greenhouse gas emissions. These may include businesses building renewable energy plants or clean energy distribution infrastructure, for example. 

In addition, CDC will commit a further €5 million to Berkeley Energy’s Renewable Energy Asia Fund (REAF), a fund to which it previously committed €10 million in 2009. REAF is aiming to raise €100 million for investments in green energy and has also received commitments from the likes of the Asian Development Bank and European Investment Bank.

REAF is expected to make investments of between €5 million and €15 million in development-stage renewable energy projects and technology with a focus on wind, small hydro, biomass and solar power. The fund’s first investment was in an Indian renewable energy project developer, currently developing a 100-megawatt wind farm in India.

CDC says that, since 2008, it has committed over $100 million to investment funds backing businesses producing green energy or cutting greenhouse gas emissions.