This working paper series summarizes key innovations and challenges of the Clean Technology Fund. It analyzes the investment plans that the Fund has endorsed to date, and makes the case for greater emphasis on institutional capacity and governance in program design.

Executive Summary

Over the past year, the Clean Technology Fund (CTF) administered by the World Bank in partnership with Regional Development Banks has begun financing clean technology deployment projects in fast growing developing countries. The objective of the CTF is to use the minimum level of concessional finance necessary to realize investment opportunities that will have transformative effects on the greenhouse gas (GHG) emissions of the recipient country over the long term. As of March 2010, US$4.35 billion –nearly the entirety of the $4.405 billion in funds pledged to the Clean Technology Fund (CTF)-- have been earmarked to support investment plans in 12 countries, and a regional concentrating solar program in North Africa. $888 million dollars in financing for 15 projects in 8 countries has been approved to date.

This working paper reviews recent developments at the CTF, including the status of contributions to the fund, its governance structure, and evolving results framework. Its focus is on the projects for which CTF financing has been approved to date. It analyzes the Mexico and South Africa investment plans and projects as case studies to illustrate some of the challenges and opportunities of addressing policy, regulatory and governance issues in project design and implementation. It is part of a series of working papers WRI has produced analyzing evolving developments at the CTF. Our March 2010 Working Paper, The Clean Technology Fund: Insights for Development and Climate Finance, reviewed the basic mechanics of the Fund and the Clean Technology Investment Plans approved.

Note: This version of the Working Paper was updated on 30 November 2010 from the version posted on 11 November 2010. Corrections were made on page 4 regarding the role of private sector observers, and on pages 9 and 13 regarding the implementing modalities of the Turkey Commercializing Sustainable Energy Financing Program. A revised paper reflecting on developments at the November 2010 meeting of the CTF governing committee will be released in early 2011.