Luxembourg-EIB Climate Finance Platform

Luxembourg-EIB Climate Finance Platform

Project Overall Goal

Executive Summary

The LCFP is a blended finance vehicle created by the European Investment Bank (EIB) and the government of the Grand Duchy of Luxembourg in 2017 to help address climate change challenges. It is designed to make equity investments in junior tranches of layered funds, which reduces the risk of investment in senior tranches for private sector players. These funds then invest in companies in emerging markets that are involved in climate change mitigation and adaptation projects. These regions will be worst hit by climate change which, if unchecked, could see the forced displacement of up to 200 million people, and rural to urban movement of a further 150 million by 2050: entire populations forced to leave their homes as result of desertification, land degradation and volatile weather. To date, the Luxembourg-EIB Climate Finance Platform has approved investments in six different funds alongside the EIB. These are the Emerging Market Climate Action Fund, the Urban Resilience Fund B, the Green for Growth Fund, the Land Degradation Neutrality Fund, the Access to Clean Power Fund, and the Climate Resilience Solutions Fund. Each fund is quite different in terms of geographies covered and sectors of activity and their impacts are multipronged. Depending on the fund, the expected multiplier effect of the Luxembourg-EIB Climate Finance Platform, defined as the ratio of total investment in final projects to the platform’s initial commitment, ranges from around 146x in the case of the Climate Resilience Solutions Fund, to more than 600x for the Emerging Market Climate Action Fund at target size. The Platform has provided direct financing of approx. USD 330 m and mobilised USD 18.5bn of investments. To date, the LCFP has approved investments in six different funds alongside the EIB. These are the Emerging Market Climate Action Fund, the Urban Resilience Fund B, the Green for Growth Fund, the Land Degradation Neutrality Fund, the Access to Clean Power Fund, and the adaptation focused Climate Resilience Solutions fund.

Project Details

Tags:  Low Income Countries, Low Middle Income Countries, Mitigation and Adaptation, blended, Africa, Asia
Source of Capital:  Bilateral, Multilateral & Development Finance Institutions, Private Equity
Project URL:  Download PDF

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