The Climate Investment Fund is Norway’s most important tool in accelerating the global energy transition by investing in renewable energy in developing countries with large emissions from coal and other fossil power production.
To help developing countries build their economies on the backbone of renewable energy, the Climate Investment Fund (CIM) will invest 10 billion NOK between 2022-2027 in renewable energy and enabling technologies.
Ambitions
We have set climate impact ambitions for the 2022-26 strategy period and track annual progress. As of end 2024, we have overdelivered on all three ambitions, as illustrated in the table above.
Note: Calculated using the harmonized IFI approach: “GHG Accounting for Grid Connected Renewable Energy projects” (2019). Expected annual avoided emissions once operational, and not attributed to Norfund.
Strategy
The objective of the Climate Investment Fund is to contribute to reducing or avoiding emissions of greenhouse gases by investing in renewable energy in developing countries with extensive emissions from coal power and other fossil fuel-based power production. Within our mandate, we need to prioritize. Our core countries have therefore been selected based on three criteria: climate impact, additionality and feasibility.
Geography
The Climate Investment Fund prioritizes 8 core countries, selected based on their potential for climate impact, additionality and feasibility of investments: India, Vietnam, Philippines, Cambodia, Indonesia, Sri Lanka, Bangladesh and South Africa. We allow exposure limits of up to 25% of the total allocation of 10 billion NOK for large countries such as India and South Africa.
Sectors
We invest in both large scale grid connected renewables such as wind and solar farms and smaller projects selling directly to commercial and industrial customers such as rooftop solar. We also invest in technologies that enable more renewable energy generation, such as storage and transmission
Instruments
The Climate Investment Fund may invest in equity, debt, funds and other instruments (including guarantees), and targets an overall portfolio share of 70% equity and 30% debt. The fund shall always adopt a minority position, targeting equity stakes from 20% upwards to 35%, but accept up to 49% with strategic partners in line with Norfund’s statutes. The Climate Investment Fund aims to allocate 5-10% of the funds – directly and through platforms – into early phase development.
Partners and platforms
The Climate Investment Fund, in line with Norfund’s overarching strategy, aims to establish new as well as strengthen existing platforms and partnerships.
This strategy of sharing risk can enable industrial investors to realize more projects or enter new markets, multiplying the impact of Norfund’s capital, and leading to sustainable business ventures.
Exits
Under the Climate Investment Fund we have an ambition to seek exit of mature or de-risked investments to recycle capital and multiply the climate impact we can have per dollar committed by the fund.