Vertical Climate and Environmental Funds (VCEFs)
VCEFs, with USD 4–5 billion annual commitment capacity, can play a catalytical role by providing concessional finance, joint finance with MDBs, creating capacity, and pipeline of projects.
2030 Goals
- The VCEFs should build on work to date on specific measures to improve efficiency, including in accreditation processes, project approval times, and accelerated disbursements, with particular attention on increasing access for LDCs and Small Island Developing States (SIDs), and on engaging the private sector.
- The VCEFs should collaborate to harmonize procedures in support of their integration and reduction of transaction costs.
- The VCEFs should work together—strategically and sequentially—based on their comparative advantages, leveraging and connecting with existing sources of climate finance, public and private.
- The VCEFs should proactively support country platforms, shifting from a focus on individual projects to country-driven strategies and investment plans for system transformation.
- The VCEFs should seek to operate as a system on upstream country programming and pipeline development, leveraging each VCEF’s comparative advantages, including its monitoring, reporting, and learning.
StatusModerate progress
Moderate progress
- Established over the last four decades, each VCEF has its own structure, business models, and approach to engaging with different actors (countries, MDBs and the private sector), indicating the need for building better synergies and taking a more collaborative and systemic approach to enhance access to climate finance.
- The Brazilian G20 Presidency and the SFWG provided actionable recommendations to the VCEFs through the IHLEG on operational optimization and mobilizing other sources of sustainable finance (public and private).
- At COP 29, the VCEFs committed to align and increase efforts to catalyze climate action from a range of financiers, including MDBs and the private sector.
- The VCEFs jointly launched the Climate Project Explorer, an AI-powered platform to explore climate initiatives.
Relevant Actors & Audiences
Multilateral Development Banks
World Bank , Inter-American Development Bank (IDB), European Bank for Reconstruction and Development (EBRD), Asian Development Bank (ADB), African Development Bank (AfDB)
International Organizations
United Nations Framework Convention on Climate Change, United Nations Environment Programme, United Nations Development Programme, Food and Agriculture Organization of the United Nations (FAO), UN World Food Programme (WFP)
Supportive Stakeholders
Rockefeller Foundation, Bezos Earth Fund, Bloomberg Philanthropies
Milestones
The below events contain milestones related to Vertical Climate and Environmental Funds (VCEFs):
June
4th International Conference on Financing for Development
Milestones
Vertical Climate and Environmental Funds (VCEFs)
- Multiple VCEFs commit to integrating both adaptation needs and gender concerns into their investments.
September
New York Climate Week 2025
Milestones
Vertical Climate and Environmental Funds (VCEFs)
- VCEFs commit to actively seek out co-financing opportunities with EMDE NDBs and commit to support needs and accreditation processes.
Resources
The below resources all pertain to the topic of Vertical Climate and Environmental Funds (VCEFs):
Climate Project Explorer
Commitments and ambition, Vertical Climate and Environmental Funds (VCEFs)
The MCFs have agreed to jointly develop and launch this platform as a single point of entry for navigating and exploring the MCF’s documents (including project documents and policies). This platform will serve as a knowledge tool to raise awareness of the value and impact of the MCFs, facilitate the exchange of information to enhance access to the funds, and promote transparency.
IHLEG Review of the Vertical Climate and Environmental Funds
Commitments and ambition, Vertical Climate and Environmental Funds (VCEFs)
The report Accelerating Sustainable Finance for Emerging Markets and Developing Economies has been prepared by the Independent High-Level Expert Group appointed by the Brazilian G20 Presidency and the G20 Sustainable Finance Working Group.