23 May 2008: Representatives from 40 donor and developing countries, meeting in Potsdam, Germany, reached an agreement on the creation of two international investment funds that will provide innovative financing for developing countries to pursue cleaner development paths and protect themselves from the impacts of climate change.

Speaking after the event, which convened from 22-23 May, Katherine Sierra, World Bank Vice President for Sustainable Development, said “we have worked closely with client countries and donor partners, the Global Environment Facility, and other UN and multilateral financing agencies to develop an innovative source of financing to help developing countries in their strategies to fight climate change between now and 2012.” The investment framework consists of two Climate Investment Funds (CIF): one is the Clean Technology Fund, designed to accelerate investments in state-of-the-art technological solutions to help developing countries mitigate the rise in greenhouse gas emissions in developing countries; and the second, a Strategic Climate Fund, which seeks to help more vulnerable countries adapt their development programs to the impacts of climate change while also addressing issues of forest management and access to green energy. The latter would provide significant resources to build adaptive capacity in the form of grants – with the option of additional highly concessional loans where countries want them. Under the agreement, the World Bank, along with the African Development Bank, the Asian Development Bank, the European Bank for Reconstruction and Development, and the Inter-American Development Bank, will help their client countries to access the funds. The next step is for the CIF to be considered by the World Bank Board for approval, so that the funds may be launched in the next few months. [World Bank Press Release, 23 May 2008] [Global Consultations: Towards a Strategic Framework on Climate Change and Development for the World Bank Group]