Allied Climate Partners (ACP)

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Context

• The new philanthropic investment organization Allied Climate Partners (ACP) was launched at COP28.

Background

• Some of the world’s biggest charities have joined with the World Bank's private investment arm in a climate financing venture.
• This group is trying to generate $11 billion in investments in developing countries.
• Launching the Allied Climate Partners (ACP) platform, the group aims to use an initial $825 million to attract far more private cash.

About ACP

• Allied Climate Partners (ACP) is a philanthropic investment organization.
• Its mission is to accelerate the climate transition and improve livelihoods in emerging economies by increasing the flow of capital to bankable, climate-related projects and businesses.
• ACP selects regional investment managers in emerging economies and supports them with first-loss capital, expertise, and the mandate to address a critical financing gap at the early, risk-oriented stages of the development process for climate-related projects and asset-oriented businesses.
• Without this support, many projects and businesses struggle to attract the necessary capital to achieve their climate-related goals.
• By proving this model, ACP aims to induce commercially-oriented public and private sector investors to invest where they likely would not otherwise.

ACP's Mission

• Allied Climate Partners' mission is to increase the number of bankable, climate-related projects and businesses in emerging economies to create significant environmental, economic, and social impact.

Need for ACP

• Local leaders around the world have identified a clear problem: there simply aren't enough bankable climate-related projects to deploy capital at the scale we need to address the climate crisis.
• ACP has been launched to fill a key financing gap at the early stages of project development.
• It will partner directly with local investment professionals, entrepreneurs, and governments to support the creation of new sustainable infrastructure projects and businesses that will have lasting benefits to our climate and to local communities.
• The lack of bankable projects has long stifled climate investment in developing nations, particularly in the early stages of project development.
• While a mere 5 percent of project funding is needed for early-stage preparations, such as land acquisition and environmental assessments, securing this capital is challenging due to risk aversion among public and private funders.
• In response, ACP is stepping in with a transformative solution.

Aim

• The goal is to enable local climate-related projects and businesses to attract the capital needed to achieve their climate and development goals. 

Objective

• The objective is to provide a road map for government and private sector actors to deploy at even greater scale.

Goal

• ACP and its partners are initially looking to aggregate an $825 million investment platform, catalyzed by an anticipated $235 million in philanthropically-backed junior capital.
• ACP will fund the junior equity of initial investment managers in Southeast Asia, Africa, the Caribbean & Central America, and India.

Role

• ACP will select regional investment managers in emerging economies and support them with de-risking solutions.
• The aim is that they can more rapidly increase the number of climate-related projects and asset-oriented businesses to create significant environmental, economic, and social impact.
• This model is designed to address a critical financing gap at the early, risk-oriented stages of the development process.
• ACP will finance projects, generate returns, and then reinvest philanthropic proceeds, leading to a multiplying effect where markets can have an outsized impact for positive change.

Significance

• ACP can be a first step in capital being deployed at scale to catalyse climate solutions.
• ACP is an opportunity to dramatically scale a new type of investment platform, which combines philanthropy, development finance institutions, and the private sector to address major gaps in the early, risk-oriented stages of developing climate-related projects and businesses.