$210 million
For large scale renewables such as geothermal, the preparation, construction and commissioning could take four to five years. For industrial and residential energy efficiency programs, the lead time to emission reductions generation is shorter, likely two to three years.
The Transformative Carbon Asset Facility (TCAF) is a World Bank trust fund established to support developing countries to implement their Nationally Determined Contributions (NDCs). It offers a unique combination of capacity building, results-based climate finance, and carbon market funding. Using results-based climate finance, TCAF supports developing countries’ efforts to scale up mitigation actions, create the conditions needed for private sector investments in low-carbon technologies, bridge financial gaps, and access carbon markets..
Climate Cent Foundation, Germany, Norway, Sweden, Switzerland, Canada, and the United Kingdom
TCAF funding can be used to leverage private financing.
TCAF develops innovative carbon accounting methodologies that enable countries to attribute emission reductions to the implementation of green policies as well as economy/sector-wide programs, beyond project-by-project mitigation activities. For example, the six emissions reductions crediting blueprints pioneered by TCAF—covering carbon pricing, transport, energy efficiency, climate-smart agriculture, urban programs, and greening the financial sector—represent critical new knowledge contributions that can help unlock significant additional financing for transformative climate action.
TCAF offers an innovative hybrid funding structure—mobilizing both climate finance and carbon market funding for payment against emission reductions. The climate finance, under Article 9 of the Paris Agreement, is disbursed as a results-based grant to support NDC implementation, with the Verified Emission Reductions remaining in the country. The carbon market funding, under Article 6 of the Paris Agreement, requires that the emission reductions be transferred out of the client country as Internationally Transferred Mitigation Outcomes (ITMOs). This phased approach provides flexibility to the client country in accessing international carbon markets.
Through the use of conservative baselines and accounting practices, TCAF programs allow countries to generate carbon assets that have strong environmental integrity and are compliant with the international carbon accounting and reporting system. The support provided by TCAF will enable the host country to monitor their NDC implementation progress, prepare robust monitoring, reporting, and verification (MRV) mechanisms, and facilitate inter-agency cooperation.
This fund supports developing countries.
IBRD and IDA borrowing countries
To build the Facility pipeline, the Facility management team will reach out to development partners both within and outside of the World Bank Group to identify promising concepts and programs. Funding can be accessed through the following steps:
- Identification: Programs that align with the objectives of the Facility are identified and the Trustee will prepare a preliminary Program Information Note (pre-PIN). If moved into the preparation phase by the World Bank, the implementing entity will develop the Program Information Note (PIN) that explains how the identified program meets eligibility criteria on technology and sector and is designed to meet the six guiding principles
- Preparation: the implementing agency will prepare a series of studies and plans. Concurrently, the TCAF team will provide policy and project advice, directly or through external consultant(s), along with financial assistance to the implementing entity to have broad internal consultation(s) and develop a Program Design Document that provides details on the technical and institutional “building blocks” required for the crediting program.
- Appraisal: The World Bank GP team will prepare a draft Project Appraisal Document (PAD) to conclude whether the project meets requirements. A decision meeting, chaired by the CMU, will make a decision for appraisal. Upon completion of satisfactory appraisal, the project will be reviewed and authorized by the World Bank Board negotiation and signing of loan agreement.
- Implementation and supervision: The World Bank will supervise the crediting program implementation as per its policies and guidelines, reporting on implementation progress on a regular basis. As provided by the ERPA and the methodological approach developed for each program, emission reductions will be independently verified on a pre-determined schedule and payments will be made to the implementing entities.
Find additional information on the application process here. Review Facility core parameters here.