Name of Fund

Clean Technology Fund (CTF)

Date created

Date fund proposed: February 2008

Date fund made operational: Approved by the World Bank Board of Directors on July 1, 2008

Administrating organisation

The World Bank is the Trustee of the CTF Trust Fund. An Administrative Unit for the Climate Investment Funds has been established in the World Bank, in order to (i) manage the meetings of the CIF's Trust Fund Committees and the Strategic Climate Fund (SCF) Sub-Committees, in collaboration with the Multilateral Development Banks; (ii) ensure collaboration and communication among the Multilateral Development Banks and convene meetings of the MDB Committee; and, (iii) promote cooperation with other development partners to advance the objectives of the Climate Investment Funds.

The World Bank Group, the African Development Bank, the Asian Development Bank, the European Development Bank, and the Inter-American Development Bank are the implementing agencies for CTF investments. 

Objectives

The Clean Technology Fund (CTF) is one of the two (along with the Strategic Climate Fund) multi-donor Trust Funds within the Climate Investment Funds (CIF). The CIFs have been designed to support low-carbon and climate-resilient development through scaled-up financing channeled through the African Development Bank, Asian Development Bank, European Bank for Reconstruction and Development, Inter-American Development Bank, and World Bank Group. The CTF aims to finance transformational actions by:

(a) Providing positive incentives for the demonstration of low carbon development and mitigation of greenhouse gas emissions through public and private sector investments;
(b) Promoting scaled-up deployment, diffusion and transfer of clean technologies by funding low carbon programs and projects that are embedded in national plans and strategies to accelerate their implementation;
(c) Promoting realization of environmental and social co-benefits thus demonstrating the potential for low-carbon technologies to contribute to sustainable development and the achievement of the Millennium Development Goals;
(d) Promoting international cooperation on climate change and supporting agreement on the future of the climate change regime;
(e) Utilizing skills and capabilities of the MDBs to raise and deliver new and additional resources, including official and concessional funding, at significant scale; and
(f) Providing experience and lessons in responding to the challenge of climate change through learning-by-doing.

Donor contributions

Activities supported

The Clean Technology Fund will invest in projects and programs that contribute to demonstration, deployment and transfer of low carbon technologies with a significant potential for long term greenhouse gas emissions savings. As country circumstances differ, investment programs will be developed on a country-specific basis to achieve nationally-defined objectives. Options include programs and large-scaled projects:

 (a) At the sectoral or sub-sectoral level in a given country;

 (b) Sub-nationally, by focusing activity on a particular province/state/municipality;

 (c) Regionally, particularly where regional cooperation is required;

 (d) Through the private sector, or public-private partnerships.

Potential sectors for CTF investments are in the power sector (renewable energy, as well as increased efficiency in generation, transmission and distribution); transportation (modal shifts to public transportation, improved fuel economy, and fuel switching); and large scale adoption of energy efficient technologies in the industrial, commercial and residential building sectors.

Conditions and eligibility requirements

Country access will be based on:

(a) ODA-eligibility (according to OECD/DAC guidelines); and 

(b) an active multilateral development bank (MDB) country program.

When a country expresses interest in accessing CTF financing, the MDBs concerned will conduct a joint mission involving other relevant development partners. MDBs will engage with government officials, private industry and other stakeholders on how the fund may help finance scaled-up, low carbon activities in the given country. An investment plan will be designed under the leadership of the recipient country. Details of joint missions can be found on the CTF website here http://www.climateinvestmentfunds.org/cif/CTF_Joint_Missions

The CTF Trust Fund Committee envisages that resources of the fund should not be spread too thinly if the fund is to achieve its objectives. Therefore, it is expected that fifteen to twenty investment plans for CTF co-financing should be prepared for consideration by the Trust Fund Committee. The investment plan is a “business plan” of the multilateral development banks (MDBs), developed under the leadership of the government, to assist a country with CTF co-financing in implementing its national development strategies and programs with low carbon objectives. The investment plan is agreed among, and owned by, the government and the MDBs. 

Funds disbursed to date

Cumulative disbursements as of January 2012 were USD 384 million, including USD 22 million on administrative expenditure.

At the CTF Steering Committee meeting in November 2010, members inquired about the cumulative level of disbursement of the funds and the need for transparent information about this. The Trustee explained that it does not disburse by project; rather it 

Uptake and projects supported

Proposed life of fund

Further information

For general information, meeting documents, governance framework, Trustee reports, investment criteria, operations summaries, and annual reports, visit: http://www.climateinvestmentfunds.org/cif/node/2

Decision-making structure for fund disbursement

The governance and organizational structure of the CTF includes the CTF Trust Fund Committee, a MDB Committee, a Partnership Forum, an Administrative Unit and a Trustee. A brief summary of these groups is given below, and full descriptions of their respective responsibilities can be found on the CTF website here  http://www.climateinvestmentfunds.org/cif/CTF_Governance

CTF Trust Fund Committee:

The CTF Trust Fund Committee was established to oversee and decide on the operations and activities of the CTF. 

Committee composition:

• Eight representatives from contributor countries, identified through a consultation among such contributors. Current Contributing Countries: Australia, France, Germany, Japan, Spain, Sweden, United Kingdom, United States. 
• Eight representatives from eligible recipient countries, identified through a consultation among interested eligible recipient countries. Current Recipient Countries Members: Brazil, China, Egypt, India, Morocco, Nigeria, South Africa, Turkey.
• When the CTF Trust Fund Committee considers an investment plan, program or project for a country, a representative of such recipient country, during deliberations of the Trust Fund Committee on the investment plan, program or project;
• A senior representative of the World Bank, recognizing the role of the World Bank as the overall coordinator of the CIF partnership;
• A representative of the MDBs, identified by the MDB Committee for each meeting of the CTF Trust Fund Committee on the basis of rotation among the MDBs. 

Representatives from contributor and eligible recipient countries are decision making members, and serve for a two year term.  Terms are staggered so that not all Members are replaced each year.  If there are less than eight donor countries contributing to the CTF in the a given year, the number of donor country representatives and recipient country representatives, respectively, shall be reduced to equal the number of actual donors contributing to the CTF. Representatives may be reappointed.

MDB Committee:

The Multilateral Development Banks (MDB) Committee facilitates collaboration, coordination and the exchange of information, knowledge, and experience among MDB partners.

Partnership Forum

Administrative Unit:

The Administrative Unit supports the work of the CIF, the Trust Fund Committee and other committees. It is housed in the World Bank Group’s Washington, DC offices and is comprised of a small professional and administrative staff.

Trustee:

The World Bank (International Bank for Reconstruction and Development) acts as Trustee for all Climate Investment Funds, including the CTF. It holds in trust, as a legal owner and administrator, the funds, assets and receipts that constitute the Trust Fund, pursuant to the terms entered into with the contributors.

Consultations with non-government stakeholders

In designing the Climate Investment Funds, consultations took place with potential donors and recipients, the United Nations family, other multilateral development banks (MDBs), civil society organizations, and the private sector. At a final design meeting, held in Potsdam, Germany, on May 21-22, 2008, representatives from some 40 developing and industrialized countries agreed to create the CIF.

The Fund includes a Partnership Forum – a broad-based meeting of stakeholders, including donor and eligible recipient countries, MDBs, UN and UN agencies, GEF, UNFCCC, the Adaptation Fund, bilateral development agencies, NGOs, private sector entities, and scientific and technical experts. The group will be convened annually to provide a forum for dialogue on the strategic directions, results and impacts of the CIF. The Partnership Forum will be co-chaired by the World Bank Vice President for the Sustainable Development Network and a country representative elected by countries participating in the Partnership Forum.

The Partnership Forum will be a meeting for dialogue and consultation and will not lead to written outcomes, such as agreed texts or declarations, which could be used as a basis for discussions in the UNFCCC.

A number of stakeholders are observers to the deliberations of the CTF committee, including the secretariat of the UN Framework Convention on Climate Change (UNFCCC) and the Global Environment Facility (GEF). Two representatives of the private sector or business associations (one from a recipient country and one from a contributor country) and four representatives of civil society are also included as observers. These observers have been appointed through a processes of “self selection” coordinated by the World Business Council for Sustainable Development for the private sector, and by the Washington, DC based NGO Resolve for civil society in 2009. All observer roles are “active”, which allows them to request the floor to make interventions, propose agenda items, and recommend experts. The World Bank and its partners periodically host a “Partnership Forum” to share lessons learned from the CIF with a range of stakeholders, and to seek expert input Programs. The first forum was held in October 2008, and the second in March 2010.

More details about the current composition of observers, along with their formal roles and responsibilities, can be found on the CTF website here http://www.climateinvestmentfunds.org/cif/CTF_Observers

However, not all sessions of the CTF committee meetings are open to observers. Deliberations over investment plans are at present closed “executive sessions”. As administrator of the fund, the World Bank has sought to ensure that CTF disclosure practice is consistent with its disclosure policy, and hesitated to exceed those standards. In May 2009, the Trust Fund Committee agreed to publicly disclose Clean Technology Plans prior to their meetings. Previously these plans were not disclosed until after they had been approved in principle by the committee. In October 2009, the decision was made to allow observers to attend country and MDB presentations of the investment plans, and provide brief comments. The actual discussion of the plan continues to exclude observers. In November 2009, the civil society and private sector observers made a formal request to the chairs of the CTF trust fund committee to include observers in all sessions of the meetings.

How fund disbursement is reported

Issues raised by the public

Some believe that the CTF Partnership Forum is an inadequate provision for proper inclusion and consultation of civil-society stakeholders.A more formal role for representatives of civil society in the governance of the fund – perhaps as an independent technical expert –would be valuable. (see: http://www.wri.org/publication/us-contributions-world-bank-clean-technology-fund)

The Trust Fund Committee approved a proposal for Civil Society representatives to observe meetings of the Trust Fund Committee in January 2009.

The CIFs have been criticised by civil society groups for creating parallel structures for financing climate change adaptation and mitigation outside the ongoing multilateral framework for climate change negotiations and within a process dominated by G8 countries. Developing countries have long argued for greater commitments and increases in financial resources under the UNFCCC to enable them to fulfil their obligations under the Convention but have maintained that such resources should be placed under the guidance of the state parties to the Convention to ensure consistency with internationally agreed priorities and principles (See: Celine Tan, Third World Network, ‘World Bank’s Climate Funds Will Undermine Global Climate Action’ 10 April 2008: www.twnside.org.sg/title2/finance/docs/Climate.Funds-Commentary.Revised.doc).

The CIFs are also criticised for the significant speed at which they have been designed, promoted and implemented without due consultation with wider stakeholders. (See: Celine Tan, Third World Network, ‘No additionality, new conditionality: a critique of the World Bank’s Climate Investment Funds’ Briefing Paper 2, 2008: www.foe.org/pdf/CIF_TWNanalysis.pdf).

The language of the Fund has been criticised for implying recognition of the UNFCCC principles as merely guidance for the Fund’s policies rather than as binding internationally negotiated commitments of state parties which must be respected. It also demonstrates a lack of familiarity with the principles negotiated under the Convention and the legal status of commitments under the UNFCCC (see: http://www.twnside.org.sg/title2/finance/twninfofinance20080510.htm).