Guidance

International Climate Finance

International Climate Finance is a UK government commitment to support developing countries to respond to the challenges and opportunities of climate change.

There is a clear moral imperative for developed economies such as the UK to help those around the world who stand to lose most from the consequences of manmade climate change.

Prime Minister Theresa May, December 2017

Climate change is a global challenge that affects us all. No country is projected to be spared from the impacts of further global temperature increases and we are already facing serious challenges to the natural environment; to food production; and to water resources. Without concerted global action to limit and manage the impact of climate change, we could reverse the huge gains in global poverty reduction which the UK has helped achieve over the last 3 decades.

UK International Climate Finance (ICF) plays a crucial role in addressing this global challenge. Three government Departments (DFID, BEIS and Defra) have responsibility for investing the UK’s £5.8bn of ICF between 2016 and 2021.

Our ICF delivers in the national interest, delivering all 4 aims of the UK aid strategy:

  • strengthening global peace, security and governance
  • strengthening resilience and response to crises
  • promoting global prosperity
  • tackling extreme poverty and helping the world’s most vulnerable

If we do not tackle climate change, it will undo the progress made globally to meet the Sustainable Development Goals. We directly support the goals on climate action and affordable and clean energy, as well as indirectly supporting many others.

Overview

Domestically and internationally the UK is a leader on climate change. We played a pivotal role in securing the Paris Agreement in 2015, where the world came together to agree a plan to limit temperature rises to below 2 degrees. We have reduced our emissions quicker than any other country in the G20, drawing on the depth and breadth of UK low carbon knowledge and expertise and creating new economic opportunities. Since 1990 the UK economy has grown by two thirds while emissions have fallen by over 40%. We have ended UK support for unabated coal power generation and, across the world, UK businesses are helping to make the global low carbon transition a reality.

The UK honours its international obligations. Alongside other developed countries, we have committed to jointly mobilise $100bn per year in climate finance to developing countries from public and private sources. This was instrumental in securing the landmark Paris Agreement. As part of this commitment, we pledged to provide at least £5.8bn of International Climate Finance (ICF) between 2016 and 2020. This is official development assistance from DFID, BEIS and Defra. It aims for an even split between mitigation and adaptation and places us amongst the world’s leading providers of climate finance. We have also committed up to $5bn with Germany and Norway for countries who bring forward ambitious projects to halt deforestation.

Investing our climate finance today helps reduce costs tomorrow. Every £1 invested well in climate-related risk reduction saves more than £3 (and up to £50) in avoided disaster impacts. Similarly, every pound spent cutting CO2 pays for itself between five- and twenty-fold by offsetting the future costs of climate change – costs that cover impacts ranging from food production to water resources, the natural environment and migration. Our ICF does this by:

  • building the resilience of the poorest people and communities. It supports countries to prepare for and adapt to climate change, improving how disasters are managed and reducing the harm they cause and the costs of responding
BRACED programme, DFID
BRACED Programme, DFID
  • working to ensure that the vast expansion in infrastructure in developing countries is low carbon and climate resilient – using our finance to build capacity and unlock greater flows of private finance towards clean growth, bringing down the costs of a global low carbon transition in the process;
Carbon Initiative for Development, World Bank Group
Carbon Initiative for Development, World Bank Group
  • supporting work to halt deforestation and create new supply chains that are both profitable and sustainable. We help communities to use land in ways that reduce emissions and improve productivity whilst protecting and restoring forests that support important biodiversity and fragile eco-systems.
Capacity building to spot early signs of deforestation in Colombia
Capacity building to spot early signs of deforestation in Colombia

Our Results

We are committed to understanding and measuring the impact of our investments, and annually publish a set of key results.

2018 UK Climate Finance Results

Impact of our investments, key result
Impact of our investments, key result

Previous ICF results documents, and KPI methodologies

Case Studies

Nepal Climate Change Support Programme

Nepal Climate Change Support Programme

The Nepal Climate Change Support Programme (NCCSP) was an innovative community based adaptation programme implemented by the Government of Nepal and supported by ICF. It worked in 14 of the most remote and climate vulnerable districts of Nepal, helping people to cope with floods, droughts and landslides.

Examples of the work of the NCCSP include the provision of clean cookstoves to thousands of families and the installation of community water storage tanks.

NCCSP also contributed to a renewable energy programme in the country which installed micro-hydro plants, solar power systems for schools and hospitals and community water systems. Finally, the NCCSP supported post-earthquake recovery by funding the installation of solar power and clean cook stoves so that communities affected could recover quickly and support themselves sustainably in the future.

Improving Resilience in South Sudan (IRISS), BRACED

Improving Resilience in South Sudan (IRISS), BRACED

According to the Climate Change Vulnerability Index, South Sudan is amongst the most vulnerable countries in the world and projections indicate that the impact of global warming there will be felt 2.5 times more than the global average. Over 90% of the people in South Sudan are reliant on climate sensitive sectors for their livelihoods and climate change could have a major negative impact on their income.

The Improving Resilience in South Sudan programme (IRISS), funded by ICF, builds community resilience to floods and droughts in South Sudan. It works with communities to develop knowledge and skills so that they can produce long lasting sources of food and reduce their dependence on aid. Through a combination of new farming techniques, vegetable gardening and village savings and loan associations, IRISS helps community members to build climate-resilient agriculture skills to take back to their villages and farms.

The training and provision of tools and seeds funded by this programme has expanded the availability of food, from the traditional harvest of just one major cereal crop, to an almost continuous harvest of vegetables throughout the year. So far, it has trained over 2,900 people in climate resilient agriculture techniques.

Read more about this, and other resilience programmes – Building Resilience and Adaptation to Climate Extremes and Disasters.

The Clean Technology Fund (CTF)

Empowering a Greener Future through Clean Technologies

Climate-friendly energy can reduce poverty and build economic growth in developing countries. That’s why the UK works with the CTF to finance large-scale renewable energy technologies like solar power, and to promote energy efficiency. The success of the Fund’s programmes shows others, including the private sector, that climate smart technology is worth investing in.

The Clean Technology Fund (CTF)
Photo credit: World Bank Group/ Abengoas Solar

South Africa’s KaXu Solar One Concentrated Solar Power project, with funding from the CTF, recently won an award from the United Nations for it’s approach to tackling climate change. The plant works by using around 330,000 mirrors to reflect and concentrate the sun’s rays, generating enough renewable energy to power 80,000 South African households. It is expected to save around 315,000 tonnes of CO2 a year, equivalent to taking 66,000 cars off the road. Not only this, KaXu is also helping stimulate the local economy. Since 2012, the plant has generated over 1,700 jobs in the Northern Cape, a province with a high rate of youth unemployment.

The local community also benefit through a 20% equity stake. Dividends from this support local education, health and housing initiatives that will benefit the livelihoods of some of South Africa’s most vulnerable citizens.

Clean Technology Fund

Blue Forests Programme

Blue Forests video

Mangrove forests are some of the most effective habitats on earth at storing carbon which could otherwise be released as carbon dioxide and so contribute to global warming. As well as supporting endangered species and absorbing carbon dioxide, they perform a range of other ecosystem services such as storm protection, prevention of coastal erosion and climate change adaption and resilience for the hundreds of millions of people that rely on them.

Still, they are one of the world’s most threatened tropical ecosystems. Less than 1% of the remaining mangrove forests are adequately protected. Their loss erodes coastlines and reduces the ability of poor communities on these coastlines to cope with the impacts of climate change.

Madagascar houses Africa’s third largest expanse of mangrove forests. Secure management and legal barriers are needed to stop unregulated and unsustainable exploitation of the mangroves.

Blue Forests Programme

The Blue Forests project, supported by UK ICF, will reduce mangrove loss by working with local communities, the private sector and the government. It will explore green business opportunities based on sustainable mangrove forestry and fisheries management. Coastal communities then benefit through increased resilience to climate change and the conservation of threatened marine biodiversity.

The project is expected to protect 20,000 ha of mangroves through community forest management and benefit over 100,000 forest dependent people with the development of multiple sustainable livelihoods.

Blue Forests Programme

The Renewable Energy Performance Platform (REPP)

The Renewable Energy Performance Platform (REPP)

Virunga Power, an African developer, investor, and operator of renewable power projects and rural distribution grids, wanted to develop two river-based mini hydro-power plants in the Murang’a and Bungoma counties of Kenya. To get these projects off the ground they needed to show private investors that the projects would be sound and successful.

The UK is the sole funder of REPP, an organisation focused on providing access to financial and technical assistance. Partnering with REPP allowed Virunga Power to carry out activities like environmental impact assessments and feasibility studies. This addressed concerns of potential investors and the project is now expected to attract significant private and public finance. At the same time, it demonstrates that small scale renewable energy projects in sub-Saharan Africa are a viable investment.

These 2 power plants will provide improved access to clean electricity to around 340,000 people in rural communities, helping to stimulate rural economic growth. REPP is now working with partners to develop more hydro, biomass and solar power projects in Kenya which could power 18,000 homes.

For more information visit: REPP Africa

Further information on ICF projects can be found on Development Tracker.

Contact Details

For further details about the ICF, get in touch with DFID, BEIS or Defra using the contact details below.

enquiry@dfid.gov.uk / 0300 200 3343

Defra Contact Form / 03459 33 55 77

enquiries@beis.gov.uk / 020 7215 5000

Further Information

Access to funding

There is currently no direct route through which an organisation outside of the UK Government can independently develop a project to be considered for ICF funding. We recommend that in-country projects apply to the delivery partners that we invest in for funding.

External review

The work of ICF was last reviewed by the Independent Commission for Aid Impact in 2014. You can read details of the review below -

UK Reporting of ICF Spend

Government Departments

ICF is a cross-government collaboration led by 3 different departments. For more information on the wider work of each, please click on the links below:

Published 13 June 2018