What is the Climate Investment Fund?
By Lucas Cunha (CFC-GS/UFPA) The Climate Investment Funds (CIF) is one of the world’s largest multilateral climate finance mechanisms, with $12.5 billion committed since its creation in 2008 and investments in nearly 400 projects across 82 low- and middle-income countries. Created as an initiative of the G8 and G20, the CIF operates uniquely within the climate finance landscape, distinguished by its exclusive use of multilateral development banks (MDBs) as implementing entities. In Brazil, this means that CIF resources reach the country through the Inter-American Development Bank (IDB) and the World Bank. The CIF’s structure consists of two components, the first being the Clean Technology Fund (CTF), which targets middle-income countries for the introduction of low-carbon technologies with high emission-reduction potential. CIF IN BRAZIL: FOUR PROGRAMS, FOUR FRONTS Brazil participates in the CIF through four main programs: 1. FOREST INVESTMENT PROGRAM (FIP) The CIF’s largest program in Brazil is the FIP, which has been funding the sustainable management of the Cerrado biome since 2013. The investment plan implemented by the World Bank and the IDB set ambitious goals for improving local livelihoods, reducing emissions, and strengthening community governance. A key aspect of the FIP in Brazil was its role in elevating the Cerrado to the national climate agenda, such that CIF funding was instrumental in raising the Cerrado’s national profile. The FIP also included the Dedicated Grant Mechanism (DGM), a direct grant program for indigenous peoples and local communities to enable them to access and manage resources autonomously. 2. RENEWABLE ENERGY INTEGRATION (REI) — THE CLEAN ENERGY TRANSITION In June 2023, the CIF approved an investment plan for Brazil through its REI program. The concessional financing will accelerate an ambitious green energy transformation in the country: plans include doubling renewable energy capacity, reducing emissions, accelerating large-scale green hydrogen production, and expanding access to clean energy for millions of people. Furthermore, the project includes the modernization of hydroelectric plants and the development of the Pecém green hydrogen hub in Ceará. 3. CLEAN TECHNOLOGY FUND (CTF) The CTF is the smallest program in the national portfolio, but it represents the CIF’s broadest engagement in clean technologies—providing financing to sponsors of clean technology projects, investors in climate mitigation projects, and financial intermediaries that develop new credit lines for climate change investments. 4. NATURE, PEOPLE AND CLIMATE (NPC) The fourth and most recent CIF program in Brazil is the NPC, which aims to support nature-based solutions, bridging the gap between mitigation and adaptation financing, as well as promoting the empowerment of indigenous peoples and traditional communities, generating additional benefits such as biodiversity and improved livelihoods. The NPC’s ambition in Brazil is geographically focused: the plan allocates USD 47 million in concessional CIF funds, combined with USD 100 million from the Climate Fund, via BNDES, and USD 100 million from the World Bank, which will be directed to the private sector to finance restoration projects in the Amazon and the Cerrado. The central logic of the NPC is to transform the so-called “Arc of Deforestation” into an “Arc of Restoration.” The goal is to transform degraded areas of the Tocantins-Araguaia basin into restored areas, contributing to the reduction of greenhouse gas emissions, the recovery of native vegetation, and the creation of new economic opportunities. The technical focal point is the Ministry of the Environment and Climate Change (MMA), and implementation will be led by the BNDES, which will provide loans to the private sector to boost investments in forest restoration and sustainable production chains. In addition to the main project, the NPC also includes a Dedicated Grant Mechanism (DGM) of USD 5 million aimed directly at indigenous peoples and local communities, with approval expected in 2027. FINAL CONSIDERATIONS The CIF represents a new generation of climate finance focused on national investment plans that bring together governments, development banks, and communities around systemic transformations. In Brazil, this architecture has enabled the inclusion of the Cerrado in the global climate agenda, the promotion of low-carbon practices, and the start of the transition to an energy system with greater integration of renewables. In light of this landscape, it is evident that the Climate Investment Funds act not only as a financial mechanism but as a true driver of institutional and productive reorganization in the climate sector. In the Brazilian case, its performance highlights the potential of climate finance arrangements to catalyze structural changes, although it also reveals the need for continuous improvement of coordination, monitoring, and impact assessment mechanisms. You can read more articles about climate finance on our blog and access financing data on our tracker. Check it out! REFERENCES BMZ — BUNDESMINISTERIUM FÜR WIRTSCHAFTLICHE ZUSAMMENARBEIT UND ENTWICKLUNG. Climate Investment Funds (CIF). Berlim: BMZ, [2025]. Disponível em: https://www.bmz.de/en/issues/climate-change-and-development/climate-financing/climate-investment-funds-188396. Acesso em: 20 mar. 2026. CIF — CLIMATE INVESTMENT FUNDS. Brazil. Washington, D.C.: CIF, [2024]. Disponível em: https://www.cif.org/country/brazil. Acesso em: 20 mar. 2026. CIF — CLIMATE INVESTMENT FUNDS. Climate Investment Funds approves $70 million to enable $9 billion energy transformation in Brazil. Washington, D.C.: CIF, 30 jun. 2023. Disponível em: https://www.cif.org/news/climate-investment-funds-approves-70-million-enable-9-billion-energy-transformation-brazil. Acesso em: 20 mar. 2026. CIF — CLIMATE INVESTMENT FUNDS. Climate Investment Funds earmarks $40 million for indigenous-led climate action in seven countries and one region. Washington, D.C.: CIF, [2024]. Disponível em: https://www.cif.org/news/climate-investment-funds-earmarks-40-million-indigenous-led-climate-action-seven-countries-0. Acesso em: 20 mar. 2026. CIF — CLIMATE INVESTMENT FUNDS. Evaluating CIF’s Forest Investment Program: lessons for transformative impact. Washington, D.C.: CIF, [2024]. Disponível em: https://www.cif.org/news/evaluating-cifs-forest-investment-program-lessons-strengthening-transformative-impact. Acesso em: 20 mar. 2026. CPI — CLIMATE POLICY INITIATIVE. International climate finance tracking for Brazil. Rio de Janeiro: CPI/PUC-Rio, 2025. Disponível em: https://www.climatepolicyinitiative.org/publication/international-climate-finance-tracking-for-brazil/. Acesso em: 20 mar. 2026. IFC — INTERNATIONAL FINANCE CORPORATION. Climate Investment Funds (CIF). Washington, D.C.: IFC, [2025]. Disponível em: https://www.ifc.org/en/what-we-do/sector-expertise/blended-finance/climate/climate-Investment-funds. Acesso em: 20 mar. 2026.
