The GEF Earth Fund was a pilot public-private partnership (PPP) initiative established by the Global Environment Facility (GEF) in 2008 to foster innovative projects, technologies, business models and financial solutions to address the world’s most challenging environmental issues. The largest component of this initiative was the IFC Earth Fund Platform managed by the International Finance Corporation (IFC). It utilized $40 million of GEF and IFC catalytic funding for investment and advisory projects and has leveraged more than $1 billion of IFC commercial finance and other private finance, representing an overall investment multiple of about 26x.
Ernst & Young (EY) recently completed an independent evaluation of the IFC Earth Fund Platform, and concluded that it has overall been very successful in meeting its objectives and has generated valuable lessons related to market creation and development. EY pointed to the value of an efficient wholesale business model that catalyzes private sector investments in tandem with advisory work and capacity building to promote innovative, risk-sharing, replicable and sustainable approaches for generating global environmental benefits. This is in line with the new corporate IFC Strategy 3.0 as well as the GEF 2020 Strategy.
So what have we learned from this? And what is the future of such cooperation? Is it time to truly bring this type of initiative to scale?