Global Innovation Lab for Climate Finance

The Global Innovation Lab for Climate Finance (the Lab) is an investor-led initiative established in 2014. It incubates proposed solutions aiming to drive private investment to action on climate change. It is a public-private partnership of 70+ member institutions that identifies, develops, and supports transformative sustainable finance ideas for transition measures that may be facing specific barriers to attracting investment, particularly in developing countries. Half of the members come from the private sector and the other half from public institutions, including government agencies and ministries, and development banks.

Since 2014, it launched 49 instruments, representing a range of financial innovations that help scale climate action, which are proposed by enterprises, fund managers, and market experts to overcome market barriers to investment. These instruments have mobilized $2.4 billion. The Lab accepts submissions for ideas in all developing country regions, and has launched specific programmes in Brazil, India, and Southern Africa.

The Climate Policy Initiative, an analysis and advisory organization with expertise in finance and policy, acts as the Lab Secretariat.

Why it matters 

The Lab is a unique space for collaboration between public and private financial institutions around the development of innovative climate finance solutions.

The Lab aims to strengthen partnerships between the public and private financial institutions by building their capacity and knowledge to identify and deploy effective climate finance solutions together.

The Lab enables piloting and implementation of transformative climate finance solutions

From 2014 to 2020, Lab Member institutions have invested $370+ million using a variety of finance sources (equity, commercial debt, preparation-stage grants, concessional debt, guarantees, among others), which have catalysed an additional $2.0 billion, more than five times their original investments, tackling investment barriers in critical areas of action on climate change, including climate risk, renewable energy, sustainable cities, agriculture forests, nature-based solutions, energy efficiency, and energy access.

Main areas of work related to climate mainstreaming:

Since 2014, the Lab has launched 49 solutions that tackle investment barriers for action on climate change, in the following sectors:

• Renewable energy,
• Sustainable cities,
• Climate risk,
• Agriculture, land use and forestry,
• Energy efficiency,
• Energy access.

Ideas are selected by Lab Members and other experts based on the following criteria:

• Actionable
• Innovative
• Catalytic
• Financially sustainable

At the beginning of each Lab cycle, Lab Members vote on the top several shortlisted ideas to move into development, benefiting from guidance from Lab Members and expert working groups, as well as from in-depth analysis provided by the Lab Secretariat. Depending on their development, at the end of each cycle, several instruments are endorsed by the Lab for launch and piloting.

In recent years, the Lab prioritized innovation in adaptation finance by supporting instruments that tackle critical barriers to investment. To date, out of the 49 solutions that have been launched, 16 Lab instruments specifically address climate change adaptation challenges.