Oct 07, 2022
A $950 million U.S. Government loan to the Clean Technology Fund marks a major step forward in accelerating the transition to sustainable energy in developing economies.
This week, the United States government announced that it would be increasing its commitment to meeting the challenges of climate change through a $950 million loan to the Climate Investment Funds (CIF) Clean Technology Fund (CTF).
“Understanding the economic and human costs of climate change, the U.S. has just enacted our most aggressive domestic action on climate yet. We’re committed to a net zero economy by 2050,” said U.S. Secretary of the Treasury Janet Yellen. “We must also help developing countries transition their economies away from carbon-intensive energy resources and expand access to clean energy.” She noted that the Biden administration remains committed to boosting international climate financing to over $11 billion by 2024.
The loan - the first of its kind from the U.S. Treasury – is a first step in fulfillment of a pledge made in 2021 to support the CIF Accelerating Coal Transition Investment Program at the Carbis Bay G7 Summit. It supports U.S. climate commitments, including Just Energy Transition Partnerships (JETPs), and provides financing for projects aligned with the national investment plans of the governments of South Africa, Indonesia, India, and the Philippines, as they accelerate their shift away from coal. Specific programs could include projects to install new renewable energy, retire older coal plants and repurpose their infrastructure for new uses, and support programs to promote new investment and employment in communities affected by energy transition.
Working together with multilateral development banks, governments and the private sector, CIF’s proven model delivers climate finance at scale. For example, the Clean Technology Fund’s track record of co-financing has an unmatched mobilization ratio of 1:10.
CIF CEO Mafalda Duarte welcomed the announcement. "With this new contribution, the United States is helping create new jobs, new sustainable markets while reducing emissions, and by doing so, securing our shared climate future,” she said.