Climate Action Catalyst Fund

What is the fund?

ADB established the Climate Action Catalyst Fund (CACF) to mobilize innovative carbon finance that enhances the financial viability of mitigation actions pursued through voluntary cooperation under Article 6 of the Paris Agreement in Asia and the Pacific. CACF will catalyze the scaling up of investments that are required to meet the objectives of the Paris Agreement and the Sustainable Development Goals. CACF will provide much-needed carbon finance to support mitigation actions in the region, while enabling the financing partners to benefit from long-term transactions for purchasing internationally transferred mitigation outcomes (ITMOs) and mitigation outcomes (MOs). CACF will also contribute to developing the next generation of international carbon markets in ADB’s developing member countries (DMCs).

CACF is a multiple-partner, partner-governed trust fund open to contributions from any national, subnational government or its agencies or any public or private sector entity from ADB member countries. CACF will be managed by ADB as the trustee on behalf of the financing partners. CACF will pursue a diverse range of mitigation actions, including projects, programs, and scaled-up activities for purchasing ITMOs and MOs generated through voluntary cooperation under Article 6 of the Paris Agreement.

What are the priorities?

CACF will provide access to a source of finance to catalyze investments in mitigation actions that provide both climate change mitigation and sustainable development benefits in ADB’s DMCs. CACF will provide support at an early stage of development for such mitigation actions. CACF is intended to:

• catalyze voluntary cooperation under Article 6, amongst ADB member countries, to support achievement of their nationally determined contribution (NDC) targets and raising ambition over time;
• mobilize carbon finance to incentivize the deployment of low-carbon technologies and catalyze private sector investment to advance low-carbon growth in ADB’s DMCs;
• help financing partners meet their compliance targets and/or fulfill other purposes by purchasing ITMOs and MOs generated by a diverse range of activities supported by ADB; and
• provide climate finance to support mitigation actions and facilitate the delivery of sustainable development impacts in ADB’s DMCs.

What kind of activities are eligible?

CACF will develop a multi-asset class portfolio of mitigation actions under Article 6 of the Paris Agreement that provides sustainable development co-benefits based on the requirements and aspirations of its financing partners and/or DMCs. These may include projects, programs, sectoral crediting and policy crediting across various development sectors.

Who is eligible to receive the fund?

CACF will purchase ITMOs and MOs generated by diverse range of activities supported by ADB.

Who supports the fund?

ADB signed the first contribution agreement with Swedish Energy Agency for their commitment of SEK 300 million (approximately 27ドル million). ADB is in discussions with potential financing partners to join CACF, with the aim to grow the CACF fund size to more than 100ドル million.