Impact Investing

Climate Funding

What is climate funding

climate funding encompasses all those financial resources and instruments committed to supporting action on climate change. climate funding is critically important in climate action, given that large-scale investments are required to make the shift towards a low-carbon global economy possible and to help societies build resilience and adapt to the impacts of climate change. climate finance can emanate from a range of sources: public or private, domestic or international, bilateral or multilateral. It can be made through a range of instruments, including: grants and donations, green bonds, equity, debt swaps, guarantees, and low-interest loans. And it can be used for a range of activities, including mitigation, adaptation, and resilience building. This includes the multilateral funds available for developing countries: the Green Climate Fund (GCF), Global Environment Facility (GEF), Adaptation Fund (AF). These funds have been set up over these years as financial mechanisms of UNFCCC to provide resources to developing countries. As the impacts of climate change are increasingly felt across all economic sectors, the investments that are carried out in public budgets and other financing instruments start considering climate risks, which further expands the definition of climate funding. For instance, countries such as the Maldives consider their entire financing as climate funding since their whole economy and survival is highly dependent on climate resilience. Results of this are increased efforts to use traditional development budgets to finance climate action, particularly efforts to adapt to climate change. What are some examples of climate funding? Some of the climate funding that developing countries may receive can come as grants from the GEF, GCF, and AF. Market-based, low-interest loans are also made available to governments and the private sector through various financial institutions such as the World Bank, the African Development Bank and the Inter-American Development Bank. These grants and loans can be for projects to reduce, absorb, or prevent greenhouse gas emissions, such as renewable energy plants, electric buses, and forest conservation. Or these may be projects meant to enhance resilience to climate change: strengthening early warning systems, strengthening coastal protection, making agriculture and food systems more resilient, building infrastructure able to withstand storms and floods. In addition, governments can earmark funds as part of their budget process for priority climate action, such as those set out in national climate commitments – called nationally determined contributions in the Paris Agreement – or issue sovereign green bonds to finance these projects. The bond is a loan that a government borrows from an investor in exchange for periodic interest payments over a set number of years. At maturity, which generally occurs in the set period, the government returns the actual investment to the investor. climate funding can also be tapped by governments through emission trading and carbon taxes. Under an emission trading system, greenhouse gas emissions are converted into tradable carbon credits. A tradable carbon credit represents one tonne of carbon dioxide or an equivalent amount of another GHG reduced, sequestered, or avoided. Carbon credits can be purchased by countries and private companies in order to increase efforts to reduce GHG emissions. In general, a carbon tax is imposed to discourage the use of products and services that bear a large carbon footprint. Taxes can be levied, for example, on the amount of petrol used at the pump or on the amount of electricity produced by burning fossil fuels. Revenues from these taxes could be channeled into renewable energy, forest protection and other climate protection measures.

What We Do

Experts in fund management

We serve as a bridge between investors and high impact low-carbon projects. By investing in us you would be helping plug the $2.5 trillion funding gap for SMEs in Southeast Asia and accelerate the race to net zero by 2050.

Debt financing

Crowdfunding with $50,000 - $500,000

No collateral

About Pioneer Facility

The Pioneer Facility, managed by Nexus for Development is a developing economy impact investment fund that provides short to medium term debt capital to private growth-stage enterprises. We have disbursed $3.5m to growth-stage enterprises.

Through our strategic impact investments, we aspire to catalyze positive change, foster innovation, and contribute to the overall well-being of the communities we serve. Our commitment to impact investing underscores our dedication to generating meaningful and lasting benefits for both society and the environment.

Uncollateralized

Up to $500,000

10-12% interest

Up to 3 Years

Our Investors

Lorinet Foundation
Vitol Foundation
Phitrust Asia
FFEM
REEEP

Investment Impacts across the Region

0m USD
Dispersed
0K Tonnes
CO₂e Avoided
0m m3
Clean Water Produced
0kWh Clean
Energy Produced

Solar Energy in Rural Philippines

Through the Pioneer Facility, OREEi were able to get two senior unsecured loans of $500k each to cover upfront costs for the implementation of a government project to bring solar energy to communities in the Philippines. The debt allowed OREEi to develop a track record of project delivery and unlocked further business and investment opportunities.

“The Pioneer Facility fund was exactly what we needed, when we needed it. They were able to deliver a specialized load package at a ticket size that usually has limited tenders. The loan allows us to engage in bigger projects and fuel our growth.”

Erel B. Narida, President and CEO, One Renewable Energy Enterprise, Inc.

Solar microgrids expansion in Myanmar

Despite the challenges faced by the country and its population, Techno Hill has shown incredible resilience in Myanmar, and was able to implement 7 additional solar mini grids in the last two years. The company now operates a total of 20 in the country, supplying affordable energy to nearly fifty thousand people. The solar mini grids were developed under the National Electrification Plan (NEP), a program designed to accelerate energy access in a country that had an electrification rate of only 36% in 2016.

“By end of year 2022, an additional 3,000 people will be able to access electricity from the new mini grid at Thae Chaung village funded by the Pioneer Facility. We truly thank and appreciate Nexus for Development’s support and devotion to our remote community and their continuous trust in Techno-Hill in all circumstances. It is an honor for us to work with an investor whose vision and mission aligned with our business. With the impact financing from Pioneer Facility, Techno-Hill will commit and carry out the best for rural community developments.”

Mrs. Barani, Managing Director Techno Hill

Water Stations in rural Cambodia

KWSH is working toward the consolidation of the fragmented piped water sector of Cambodia by acquiring, standardizing, and expanding small-scale piped water stations throughout the country. Nexus’s decision to invest is driven by KWSH’s track record in delivering piped water to rural Cambodia, where only 8.5% of households are connected to piped water. The company has already connected over 13,000 households to piped water and has a long-term plan to provide clean water to over 60,000 households and 300,000 individuals.

The Pioneer Facility collaborates with KWSH in an impactful investment initiative to directly fund the procurement of two new piped water stations, poised to connect approximately 12,500 households. This strategic venture, aligning with the principles of impact investing, not only facilitates the acquisition but also supports the development of water treatment facilities. The funds allocated will further contribute to essential aspects like hiring skilled staff, acquiring additional water sources, and deploying state-of-the-art equipment, including pipelines to households.

By 2026 – We aim to Raise an Additional $5.8 million for Low-Carbon Climate Solutions. Want to get Involved?

We provide Access to Finance for Clean Energy and Water Solutions in Asia

Carbon Finance

Whether you’re interested in purchasing voluntary carbon credits or seeking guidance on accessing the carbon markets, our experts are here to assist you.

Project Financing

Do you have a low-carbon, climate-positive solution in Asia? Partner with us to explore financing options that can help you scale.