The project will be co-sponsored by the IFC and the IFC-GEF Earth Fund. The IFC-GEF Earth Fund is the first operational platform under the GEF Earth Fund and comprises $10 million contributed by IFC and $30 million contributed by the Global Environment Facility (GEF). The mandate of the IFC-GEF Earth Fund is to support, via advisory services and concessional finance, market transformation through testing or scaling up new technologies, new business models, or financial mechanisms which mitigate climate change or preserve biodiversity. Private sector innovation often arises through small, young companies and this type of companies will predominate in the CTIF portfolio, which will also aim to be geographically diverse.

The CTIF would be comprised of up to $45 million for IFC’s own account, and up to $15 million of concessional funding from the IFC-GEF Earth Fund. The CTIF will invest equity or quasi-equity in about 15 small Cleantech projects of earlier stage than “business as usual” at IFC. Blending concessional funds into the CTIF will partially mitigate the financial risks associated with this kind of investing and will therefore allow IFC to invest in earlier stage and more innovative Cleantech companies than it does today. CTIF investments will fund project costs such as capital equipment, land, working capital and operating expenses for companies which have not yet reached profitability.

45.0 million (USD)

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan
Equity	45.0

* These investment figures are indicative

This is a global facility. Investments may focus on any Part 2 country, most transactions will focus on IDA countries and frontier regions.

Impacts will vary investment by investment but tax receipts, job creation, and GHG emission avoidance will be indicators for all investments. Other impacts may include increased access to water and energy for the underserved, recycling leading to reduced pressure on landfills, and technology transfer from the North to the South and from South to South. Both directly and via demonstration effects, the CTIF aims to bring more capital and talent to Cleantech in development countries, and aims to support innovation in technology and business models.

The Facility will enhance IFC’s additionality by allowing IFC to work with companies in which normally IFC would not be able to invest, and for whom few, if any, other sources of finance are available. These companies will benefit from the IFC stamp of approval in terms of access to finance and possibly access to markets. IFC may also introduce some companies to potential partners within IFC’s network both on the investment and advisory services side of IFC’s business. In this way, IFC will assist companies’ expansion in new markets and companies’ access to investors.

Each proposed investment within the CTIF will undergo environmental and social appraisal, and is expected to involve environmental and social risk at a level between minimal and limited, in this facility classified as Category FI according to IFC’s Environmental and Social Review Procedure. Depending on the level of environmental and social risk in each investment, a classification of Category C or Category B is expected for individual CTIF investments. IFC will review all projects’ environmental and social performance from appraisal through supervision as needed. Where a project is Category B, IFC will publicly disclose an Environmental and Social Review Summary.

The Facility is expected to yield strong environmental and social benefits, particularly in terms of GHG emission avoidance. As investments will be in early stage companies, they are expected more frequently than mainstream investments to have IFC provide guidance on establishing environmental and social management systems to comply with IFC Performance Standards.