In early June, the World Bank-hosted Climate Investment Funds (CIFs) opted to indefinitely postpone discussions about how to implement their sunset clause, a provision which would require the CIFs to close. The decision was taken at June’s joint meeting of the CIFs’ Clean Technology Fund and Strategic Climate Fund Trust Fund Committees, with representatives from France and Sweden abstaining, according to the co-chairs’ summary. The CIFs will now undertake recapitalisation as early as January 2020.
The CIFs, which were established in 2008, were initially envisaged as temporary funds to be replaced by a larger UN climate fund – hence the existence of the sunset clause. However, a decision about how to implement the clause was previously postponed in 2016, with June 2019 being set as the new deadline to address the issue (see CIFs Monitor 14).
The decision potentially undermines the replenishment efforts of the Green Climate Fund (GCF), which are now underway. Unlike the CIFs, the GCF has a mandate under the UN Framework Convention on Climate Change (UNFCCC). “The CIFs’ indefinite postponement of its mandated sunset flies counter to what was a clear prioritisation by the international community of the GCF as the main multilateral climate fund in support of the implementation of the Paris Agreement,” said Liane Schalatek, an elected civil society observer of the GCF. “The potential re-capitalisation of the CIFs threatens the needed ambitious replenishment of the GCF at a time when developing countries are being asked to upgrade their climate commitments under the UNFCCC, as it is unlikely that any funding provided to the CIFs would be additional to significant contributions to the GCF.”