FMO, SNV, WWF and CFM consortium wins tender to manage €160 million Dutch Fund for Climate and Development

FMO, SNV, WWF and CFM consortium wins tender to manage €160 million Dutch Fund for Climate and Development

ESG-investing
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Today, we were informed by the Dutch government that the consortium of Dutch development bank FMO, SNV Netherlands Development Organisation (SNV), World Wide Fund for Nature (WWF-NL) and Climate Fund Managers (CFM) has won the tender to manage the €160 million Dutch Fund for Climate and Development (DFCD). This pioneering partnership of NGOs and financiers aims to help developing countries build climate resilient economies.

Investments made by the consortium parties will seek to improve the wellbeing, economic prospects, and livelihoods of vulnerable groups – particularly women and youth – and, enhance the health of critical ecosystems, from river basins to tropical rainforests, marshland, and mangroves. The consortium’s activities will also help protect communities and cities from the increasing frequency of extreme weather events and benefit weakening biodiversity in areas that provide people with water, food, medicine, and economic opportunity.

Climate-resilient economic growth

In the period up to 2030, an estimated $3.5 trillion is required for developing countries to implement the Paris climate pledges to prevent potentially catastrophic and irreversible effects of climate change. Therefore, the FMO-led consortium will utilize the full €160 million of DFCD funding to accelerate the flow of institutional and commercial capital into climate-resilient investments. The consortium provides the Dutch government with a vehicle for climate impact and promotes broad-based actions to the global challenge of climate change.

Unique partnership and fund structure

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 partners aim to establish a fund that can serve as a global example for attracting and deploying public and private capital in well-designed and impactful climate-relevant projects, in particular for climate adaptation. The fund will be focusing on several high impact investment themes, including climate-resilient water systems and freshwater ecosystems, forestry, climate-smart agriculture, and restoration of ecosystems to protect the environment.

The DFCD will be structured with three separate but operationally linked facilities, each with a unique role across the project lifecycle; each with a unique thematic sub-sector focus. The consortium will connect the long-standing project development expertise of SNV and WWF to the mobilizing and investment power of FMO and CFM. This will allow projects to graduate from idea to full implementation using lifecycle financing for every stage of a project. Furthermore, the consortium will adopt a ‘landscape’ strategy for deal origination and execution. This strategy allows consortium parties to actively source and develop investment opportunities for other consortium parties in-and-around, as well as downstream, the vicinity of their own investment activities.