NDF Commits €500,000 to Climate and Peace Fund for Fragile Countries

The Nordic Development Fund has committed €500,000 to support the design and development of the Climate and Peace Investment Fund, a proposed financing vehicle aimed at entrepreneurs in lower-income and conflict-affected countries. NDF is working on the initiative with Incofin Investment Management, the Peace Dividend Initiative, the United Nations Development Programme and the Swiss Agency for Development and Cooperation. The grant will fund preparation activities intended to turn the concept into an investable climate and peace strategy.

The initiative is focused on countries facing both high climate vulnerability and conflict-related pressures. NDF notes that fragile and conflict-affected countries contribute relatively little to global greenhouse gas emissions but face severe climate hazards because of factors including agricultural dependence, limited adaptive capacity and geographic exposure. Despite these risks, such countries receive less than 10% of total public and private climate finance, while current flows are estimated to cover only 26% of their annual financing needs.

 

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The proposed fund is intended to improve access to capital for entrepreneurs building businesses that can strengthen climate resilience, create jobs and support stability. In conflict-affected regions, smaller companies can remain important sources of employment and essential services even when broader economic conditions are difficult. CPIF aims to identify businesses where commercial activity can contribute both to climate action and to stronger local livelihoods and social cohesion.

The next stage will focus on market analysis, fund design and building a coalition of public and private investors. The partners plan to assess where capital can support sustainable economic activity and climate resilience while also creating an investment structure capable of attracting larger pools of finance. The €500,000 NDF commitment is therefore preparation capital rather than investment into operating companies, with the eventual scale and structure of CPIF still to be determined.

 

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"One of NDF's priorities is to ensure that climate finance reaches the communities most vulnerable to climate change, which are too often underserved by existing financing models," said Isabel Leroux, Program Manager at Nordic Development Fund. She said early support for CPIF is intended to help build a credible investment strategy capable of unlocking capital at greater scale in lower-income and conflict-affected markets.

 

Source: Nordic Development Fund (NDF)