Date of effectiveness: 2009
SCAF’s vision is to increase the availability of investment for early stage development of low-carbon projects in developing countries, contributing to low-carbon sustainable development, economic growth, poverty reduction and climate change mitigation.
Numerous barriers inhibit private sector financing of low-carbon projects in developing countries. During the early stage of development, projects carry a significant risk that is reduced only once all permits have been secured and the legal, operational and financial viability has been demonstrated.
Although the investment requirements are modest at this stage, third-party financing usually is not available, leaving the financial burden to the project developers who themselves are often poorly capitalised and unable to fully develop projects on their own. SCAF addresses this financing gap by providing financial support on a cost-sharing and co-financing basis to low-carbon projects via private equity (PE) funds, venture capital (VC) funds and project development companies (DevCos).
After a successful initial Phase I, SCAF launched Phase II in 2014. The Facility consists of three different support lines, each of which addresses specific barriers:
- Fund Development
- Pipeline Development
- Project Development