Climate Finance | May 10, 2023

Catalytic Climate Finance Facility scores $12 million to test and launch new finance tools

Jessica Pothering
ImpactAlpha Editor

Jessica Pothering

ImpactAlpha, May 10 – Blended-finance network Convergence has for eight years supported financial innovation and experimentation in impact investing through its design funding grants. Climate Policy Initiative has mobilized more than $3.5 billion over the past nine years via its Global Innovation Lab for Climate Finance.

The organizations are teaming up to help proven blended-finance climate funds scale up. Their focus: “severely under-financed sectors,” and agriculture in particular, in frontier and emerging markets, the partners said.

The Catalytic Climate Finance Facility will provide $500,000 in grants and technical assistance to managers of eligible funds and instruments.

The facility has secured $12 million of a $20 million target from the Gates Foundation, Global Affairs Canada, and Australia’s Department of Foreign Affairs and Trade. 

Valley of death

The facility arose out of a noticeable market need, CPI’s spokesperson said.

“There were some very innovative blended finance vehicles that were successfully securing grants and concessional finance to launch pilots but were having trouble scaling to commercial – the blended finance equivalent to the VC ‘valley of death,’” he told ImpactAlpha.

The intention is “to create an investable deal pipeline for mainstream investors by supporting concepts at the acceleration stage,” added Convergence’s Joan Larrea.

The partners are accepting applications for the facility from climate fund managers and other capital providers until Friday, June 9.