This article is sponsored by African Development Bank
The Climate Investment Funds Capital Markets Mechanism (CCMM) has launched its bond listing programme on the London Stock Exchange. Announced on the sidelines of COP29, marks a significant step forward in a bid to raise large-scale climate concessional finance from international capital markets for Africa and the developing world.
Established under the Clean Technology Fund (CTF), the CCMM represents years of collaborative effort with members of the CTF Governing Body, the World Bank and other Multilateral Development Banks (MDBs), whose steadfast support and leadership have been instrumental in bringing this ambitious initiative to life. As the first of its kind, CCMM, will seek to raise private sector capital in the international capital markets with the objective of mobilizing finance for climate action and sustainable development.
“CCMM will mobilise private capital at scale and direct it to high-impact clean energy and clean technology investments. While this is an ambitious step forward, it is rooted in a 16-year track record of being a first mover, working with national governments, the private sector, and frontline communities to pioneer cutting-edge clean technologies and solutions paving the way for greater ambition,” said Tariye Gbadegesin, CEO of CIF.
The Instrumental Role of African Development Bank
The African Development Bank’s early involvement in shaping CCMM is a testament to our commitment to advancing pioneering climate finance solutions. The announcement follows the recent approval by the African Development Bank’s Board of Directors for the signing of the CCMM Financial Procedures Agreement with the International Bank for Reconstruction and Development (IBRD), acting as the trustee, and the CIF Secretariat, paving the way way for the African Development Bank to become an Implementing Entity of the CCMM.
Congratulating CIF on the bond issuance, African Development Bank President Akinwumi Adesina remarked: “At a time of declining levels of concessional financing, new models are needed to secure larger climate finance for developing countries.”
“I am pleased with the African Development Bank’s early involvement in the design of CCMM. As the first MDB-led market mechanism centered on issuing bonds for climate action, CCMM has enormous potential to drive impactful concessional finance to climate action across Africa. By establishing a clear path for both private and institutional investors to support clean technologies, CCMM provides an open and scalable channel to accelerate the green revolution that Africa and the world urgently need” he added.
A strong aspect of CCMM is that it paves the way for multilateral climate funds to deploy their balance sheet credentials to unlock urgently needed climate funds.
“Given the track record of the CTF in leveraging $10 for every dollar invested, this mechanism holds the potential to raise tens of billions of dollars in critically needed climate finance over the next decade and can greatly help leveraging much needed private sector climate financing,” Adesina said.
Multilateral development banks show support
“Success will not be measured solely by the funds we raise, but by the real-world impact those funds have on the ground. Every investment made, every bond issued, every dollar mobilised is a step closer to a sustainable future for all,” said Ajay Banga, President of the World Bank Group.
Fatima Yasmin, Vice-President for Sectors and Themes at the Asian Development Bank, also expressed optimism that the bond listing would be a game changer for the Bank’s climate finance ambitions.
“The CCMM will address a key ADB priority by bringing together multilateral development banks to mobilise private sector-funded climate action. Supported by a 15-year partnership between ADB and CIF, this initiative will be a game changer in funding transformative projects that support climate action and contribute to regional sustainable development and poverty alleviation,” she said.
