The Hague — Climate Fund Managers (CFM) has reached financial close on its $1.065 billion Climate Investor Two (CI2) facility — the world’s largest climate-adaptation infrastructure fund dedicated to emerging markets. The milestone surpasses its initial $1 billion target and cements CFM’s role as one of the most influential blended-finance managers driving green infrastructure across Africa, Asia, and Latin America.
Launched in 2019 through a partnership between the European Commission and the Dutch Fund for Climate and Development (DFCD), CI2 channels both public and private capital into projects that strengthen resilience in energy, waste, and water systems.
“Closing CI2 above $1 billion in a challenging macro-economic environment underscores the strength of investor appetite for climate adaptation,” said Andrew Johnstone, CEO of Climate Fund Managers.
“It demonstrates that well-structured blended finance can unlock scalable, commercially viable climate-resilient infrastructure in emerging markets.”
What Is Climate Investor Two?
CI2 is CFM’s second flagship blended-finance facility following Climate Investor One (CI1), which focused primarily on renewable-energy generation. While CI1 catalyzed more than $3 billion in clean-energy projects across developing regions, CI2 expands the model to encompass climate adaptation — improving communities’ capacity to withstand droughts, floods, and rising sea levels.
The fund supports projects in:
- Water security — desalination, irrigation, and wastewater recycling systems.
- Sustainable energy — off-grid renewables and hybrid mini-grids.
- Circular-economy solutions — recycling, waste-to-energy, and green-waste management.
A key innovation accompanying the CI2 close is the Bridge-to-Bond mechanism, designed with South Africa’s Sanlam Investments. The platform enables fixed-income investors to access CI2’s underlying asset portfolio, effectively linking climate infrastructure to global bond markets.
Why This Matters for Africa
Africa stands to gain significantly from the fund’s pipeline. CI2 will prioritize projects that improve water resilience, energy reliability, and urban waste management — three of the continent’s most pressing development challenges.
Key African Focus Areas
- Water Infrastructure: desalination and irrigation systems in drought-prone regions such as Kenya, Namibia, and Morocco.
- Off-Grid Power: solar-hybrid mini-grids in Nigeria, Tanzania, and Uganda to expand access for rural populations.
- Waste & Circular Economy: recycling and landfill-to-energy initiatives in South Africa and Ghana.
The African Development Bank estimates that Africa needs $277 billion annually to finance climate adaptation and mitigation by 2030. Funds like CI2 therefore provide an essential bridge between private investment and public climate goals, enabling Africa to move beyond donor dependency toward self-sustaining green growth.
This directly complements the themes explored in Reducing Risk, Building Confidence: The Key to Unlocking Africa’s Infrastructure Boom, which outlines how guarantees and blended finance reduce investor risk in emerging markets.
The Blended-Finance Model Explained
Blended finance combines concessional public capital (from governments or DFIs) with commercial private investment. The public portion absorbs early-stage or political risk, while the private portion scales deployment — making otherwise high-risk projects bankable.
In CI2’s case, this structure has attracted institutional investors including pension funds, insurance firms, and sovereign-wealth funds seeking stable long-term returns aligned with environmental, social, and governance (ESG) goals.
By mobilizing both private and public resources, CFM’s approach transforms every $1 of donor funding into roughly $4 of private investment — an efficiency ratio critical for infrastructure-deficit regions like Africa.
Sanlam’s Role and South Africa’s Growing Financial Hub Status
South Africa’s Sanlam Investments played a pivotal role in designing the Bridge-to-Bond platform. The mechanism converts climate-infrastructure portfolios into tradable fixed-income securities, opening access for mainstream investors and deepening Africa’s participation in global green-bond markets.
This innovation positions Cape Town and Johannesburg as emerging centers for climate-finance structuring, complementing the EU’s Global Gateway strategy and the R230 billion EU–South Africa investment partnership announced in Brussels 2025.
(See EU’s R230 Billion Investment Package to South Africa.)
Global Collaboration for Local Impact
CI2’s geographic reach across Africa, Asia, and Latin America highlights the shift toward south-south investment flows, where developing economies increasingly collaborate on climate resilience.
- In Asia, CI2 funds are supporting flood-defense systems in Indonesia and waste-management networks in Vietnam.
- In Latin America, projects in Colombia and Peru are strengthening water-treatment and sanitation capacity.
- Across Africa, new projects are under appraisal in Nigeria, Kenya, Egypt, and South Africa.
This interconnected approach mirrors trends examined in Turkey–Africa Investment 2025, showing how multi-region partnerships amplify Africa’s voice in global finance.
The Bigger Picture: Financing the Climate Decade
The closing of CI2 marks a milestone for global adaptation finance. Despite progress, less than 10 percent of climate-finance flows currently target adaptation rather than mitigation. By dedicating over $1 billion to adaptation, CFM has rebalanced the equation — demonstrating that resilience investments can also generate competitive returns.
As emerging markets prepare for more frequent climate shocks, the need for resilient infrastructure—from coastal protection to drought-resistant water systems—has become both an environmental and economic imperative.
Lessons for African Policymakers
For African governments and financial institutions, CI2 offers a practical model to replicate:
- Develop blended-finance vehicles combining donor grants with pension and insurance capital.
- Create local project-preparation facilities to feed pipelines into global funds.
- Strengthen green-bond frameworks to link national markets to international investors.
- Engage diaspora investors as co-financiers of sustainable infrastructure.
These recommendations align with the insights shared in Diaspora Bonds & Diaspora Capital, emphasizing how diaspora funding can complement institutional finance.
The Power of Partnership
With Climate Investor Two now fully capitalized at $1.065 billion, Climate Fund Managers has demonstrated that climate adaptation and infrastructure finance can coexist profitably. By leveraging blended structures, local partnerships, and innovative financial mechanisms, CFM is helping bridge one of the world’s most persistent investment gaps.
For Africa, this signals a promising future: one where resilient cities, renewable energy, and circular economies are financed not just by aid, but by a new wave of sustainable, market-driven capital.
