GAIA – US$ 1.48 billion blended finance platform for climate projects in emerging markets and developing economies – commercial agreement on significant terms

Baku, 13 November 2024 – At COP29, Canada’s bilateral Development Finance Institution, FinDev Canada, MUFG Bank, Ltd. (MUFG), the Green Climate Fund (GCF) and Climate Fund Managers are near to reaching an agreement towards launching GAIA, a US$ 1.48 billion blended finance platform that aims to support high-impact climate adaptation and mitigation projects in up to 25 emerging markets and developing economies, marking a significant mobilization of climate finance. 

The platform is structured to accelerate the availability and accessibility of long-term loans for climate projects. GAIA will target 25 emerging market countries in Latin America, Africa and Asia with a focus on Least Developed Countries and Small Island Developing States, with 70% of the portfolio for climate adaptation projects and 30% for climate mitigation projects. The GAIA platform seeks to demonstrate how a blended finance structure that combines commercial, concessional, and grant capital can catalyze private finance at-scale to support projects aligned with the Paris Agreement. Eligible projects will include water and sanitation, energy generation and access, low-carbon transport, and green buildings, contributing to the G7 Partnership for Infrastructure and Investment. 

Co-founded by FinDev Canada, GCF and MUFG, GAIA will also benefit from the first allocation of FinDev Canada’s new concessional finance facility, announced by Canada’s Prime Minister at the G7 in June 2024. The platform is managed by Climate Fund Managers, a leading climate-focused blended finance investment manager, supported by Pollination, the global advisory firm focused on climate and nature. USAID is also a key partner to GAIA. 

Globally, there is a US$ 5.5 trillion annual financing need to meet the UN Sustainable Development Goals related to climate in developing economies and a US$ 100 billion climate adaptation target by the Government of Canada through 2025. GAIA is focused on mobilizing capital to address market needs through innovative pairing of public-private risk sharing. 

“We are proud to bring together global partners and leverage both public and private capital to help bridge the climate finance gap. GAIA symbolizes Canada’s leadership in climate and development finance – and accelerates the mobilization of much-needed investment in climate-vulnerable regions,” said Lori Kerr, Chief Executive Officer, FinDev Canada.

“We are delighted to have reached this milestone in our drive to bridge the climate finance gap with this innovative platform. GAIA has the potential to redefine the landscape of climate finance and, as we progress, I am excited to see the impact GAIA can have on advancing a more sustainable and inclusive global economy,” said Fumitaka Nakahama, Chief Executive and Senior Managing Corporate Executive, Global Corporate and Investment Banking, MUFG.

“The Green Climate Fund is proud to be a first-loss investor in the GAIA platform, and we’re grateful to Canada for its leadership role as part of a growing network of partners supporting the effort. Together, we’re set to channel private adaptation finance to some of the world’s most climate-vulnerable regions. GAIA demonstrates the power of public-private partnerships to drive urgent climate action, especially in Least Developed Countries and Small Island Developing States,” said Mafalda Duarte, Executive Direct, GCF.

“Major climate-related disasters have surged by 83% over the past two decades, with low- and middle-income economies most heavily impacted. Yet, investments in adaptation and mitigation projects remain scarce. GAIA’s blended finance structure enables us to utilize public capital to absorb early-stage project risk, which enables commercial capital to enter at a later, de-risked stage. The platform will play a critical role in increasing access to climate finance for the world’s most vulnerable and least prepared states," said Andrew Johnstone, Chief Executive Officer, Climate Fund Managers.

“Canada is taking a bold step forward in the global fight against climate change. GAIA represents an innovative model for mobilizing the investments we need to meet the scale of the challenge ahead. By bringing together government, private sector, and philanthropic organisations, FinDev Canada and its partners are ensuring that climate action is not only a priority, but a shared responsibility. This is how we lead —through collaboration, innovation, and a firm commitment to the climate goals we’ve set,” said The Honourable Steven Guilbeault, Minister of Environment and Climate Change. 

 

About FinDev Canada 

FinDev Canada is Canada’s bilateral Development Finance Institution (DFI), supporting development through the private sector. We provide financing, investment, and blended finance solutions, as well as technical assistance and knowledge, to promote sustainable and inclusive growth in emerging markets and developing economies (EMDEs), in alignment with the Sustainable Development Goals (SDGs) and Paris Agreement commitments. FinDev Canada is a wholly owned subsidiary of Export Development Canada (EDC). Find out more about FinDev Canada at www.findevcanada.ca.  

About MUFG

Mitsubishi UFJ Financial Group, Inc. (MUFG) is one of the world’s leading financial groups. Headquartered in Tokyo and with over 360 years of history, MUFG has a global network with approximately 2,000 locations in more than 40 countries. The Group has about 120,000 employees and offers services including commercial banking, trust banking, securities, credit cards, consumer finance, asset management, and leasing. The Group aims to “be the world’s most trusted financial group” through close collaboration among our operating companies and flexibly respond to all of the financial needs of our customers, serving society, and fostering shared and sustainable growth for a better world. MUFG’s shares trade on the Tokyo, Nagoya, and New York stock exchanges. For more information.

About Green Climate Fund 

The Green Climate Fund (GCF) is the world’s largest dedicated climate fund. GCF’s mandate is to foster a paradigm shift towards low emission, climate-resilient development pathways in developing countries.  GCF has a portfolio of USD 16 billion (USD 61.5 billion including co-financing) delivering transformative climate action in more than 130 countries. It also has a readiness support programme that builds capacity and helps countries develop long-term plans to fight climate change. GCF is an operating entity of the financial mechanism of the United Nations Framework Convention on Climate Change (UNFCCC) and serves the 2015 Paris Agreement, supporting the goal of keeping average global temperature rise well below 2°C.

About Climate Fund Managers

Climate Fund Managers (CFM) is a climate-focused blended finance investment manager operating across Africa, Asia, and Latin America. CFM raises and deploys blended climate finance funds, working in partnership to deliver climate-resilient solutions at scale and pace. With over USD 2 billion in assets under management and targeting an additional USD 6 billion, CFM’s private equity and private credit facilities address key areas of climate change mitigation and adaptation, including renewable energy, green hydrogen, energy transmission, water and sanitation, and biodiversity and oceans infrastructure. CFM’s funds are supported by public and private sector organisations, with public capital deployed strategically to balance risk and mobilise private sector capital, enabling investment across the project lifecycle - from development to construction and operation. Established in 2015, CFM is a joint venture between Dutch development bank FMO and Sanlam InfraWorks of the Sanlam Group of South Africa, with offices in The Hague, Cape Town, Singapore, and Bogota. 

About Pollination

Pollination is a specialist climate and nature solutions firm, dedicated to accelerating the shift to a net zero, nature positive and resilient future. Launched in 2019, the organisation has a presence across The Americas, EMEA and Asia Pacific. It works with financial institutions, corporates and governments to design and implement ambitious transition strategies. 

Pollination brings together world leaders across finance, investment, corporate governance and strategy, technology, law and policy; allowing it to connect dots and see around corners. It provides best-in-class strategic advice, execution and transaction support, as well as a pipeline of climate and nature technologies and projects for those seeking to access transition opportunities. 

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Media Contacts 
FinDev Canada: Media@findevcanada.ca

MUFG EMEA: Megan.wood@uk.mufg.jp

Green Climate Fund: amcelroy@gcfund.org

Climate Fund Managers: sophie.blythe@climatefundmanagers.com 

Office of the Minister of Environment and Climate Change: Hermine.Landry@ec.gc.ca 
Environment and Climate Change Canada: media@ec.gc.ca