Climate Fund Managers (CFM), MUFG Bank Ltd (MUFG), FinDev Canada and the Green Climate Fund (GCF) today announced the first close of the GAIA Climate Loan Fund (GAIA) at USD 600 million. GAIA will provide loans to predominantly climate adaptation projects in markets most severely impacted by, and least equipped to respond to, climate change - helping to close the estimated ~USD 300 billion annual adaptation finance gap¹. The fund targets a total size of USD 1.48 billion, with final close anticipated in 2027.

Co-founded by MUFG, Japan's largest financial group, FinDev Canada, Canada's development finance institution, and the Green Climate Fund (GCF), the world's largest dedicated climate fund, GAIA is managed by Climate Fund Managers (CFM), a climate-focused blended finance investment manager, with delivery supported by Pollination, the global advisory firm focused on climate and nature.

GAIA marks a new approach to climate finance by providing long-term loans to sovereign, subsovereign, quasi-sovereign and state-owned entities, including municipalities, development banks and state-owned utilities, across 19 emerging and developing countries². A minimum of 25% of commitments will be deployed in Least Developed Countries (LDCs) and Small Island Developing States (SIDS), where financing needs are greatest. At least 70% of capital will be dedicated to climate adaptation - such as sustainable agriculture, water management, ecosystem resilience and climatesmart infrastructure - with up to 30% supporting mitigation, including renewable energy and lowcarbon transport.

Upon full deployment, GAIA aims to benefit an estimated 19 million people and create more than 11,000 permanent jobs; avoid ~30 million tonnes of CO₂ equivalent emissions per year, deliver ~700 MW of renewable energy capacity and ~36,000 GWh of clean generation annually, and improve the climate resilience of over 5,000 km² of natural resources.

GAIA uses a blended finance structure that combines public and private investment, with public funding deployed strategically to reduce risk and mobilise private capital. The facility is structured with a junior tranche funded by concessional partners and a senior tranche for commercial investors, alongside a dedicated FX facility for local currency lending and a parallel Technical Assistance Facility to strengthen project preparation, ESG readiness, performance and impact outcomes.

Cornerstone commitments were secured from MUFG (senior capital), FinDev Canada (senior and junior capital) and the Green Climate Fund (junior capital). FinDev Canada has also provided additional grant funding for both the FX and TA facilities, while MUFG serves as origination partner for the fund.

While climate change is a global challenge, its impacts fall most heavily on developing and emerging economies, where communities often lack the infrastructure and resources to withstand events such as floods, droughts and extreme heat. Projects that build climate resilience have traditionally relied on public funding, which is constrained by limited budgets and competing priorities, and are often overlooked by commercial investors. By providing private credit to public and quasi-public entities, GAIA aims to help tackle one of the biggest barriers in the adaptation space: the shortage of financing for infrastructure most exposed to climate risk. This model proves that blended finance can unlock institutional capital for sectors critical to resilience, creating a pathway for sustainable development where it is needed most.

Lori Kerr, Chief Executive Officer of FinDev Canada, said:

“GAIA demonstrates the power of partnership in advancing climate action and inclusion in emerging markets and developing economies. By combining commercial and concessional capital, alongside grant funding for technical assistance and FX facilities, FinDev Canada is accelerating the mobilisation of critical investment and enabling local-currency lending where it is needed most, maximising the impact of every development dollar."

Christopher Marks, Head of Growth Markets, Innovative Finance & Portfolio Solutions, EMEA, MUFG, said:

“Achieving first close of GAIA is a major milestone in our ambition to help bridge the climate finance gap through an innovative public-private platform. As origination partner, MUFG will leverage its global network to source high-impact projects that improve lives and livelihoods in developing and emerging economies."

The Executive Director of the Green Climate Fund, Mafalda Duarte, said:

“GAIA stands to show that adaptation in the world's most climate-vulnerable regions can yield returns for global investors and communities facing the harshest impacts of the climate crisis. GCF is committing up to $150 million as a first-loss investor to anchor a platform set to mobilise nearly ten times that amount for resilience across Africa, Asia, and Latin America. This first-of-its-kind initiative brings private investment to sectors and geographies long shut out of markets, and it proves that smart public-private design can turn perceived risk into real-world opportunity."

Andrew Johnstone, CEO of Climate Fund Managers, said:

“GAIA marks an important step in CFM's evolution - extending our blended finance model beyond private equity into private credit for the first time, enabling us to provide long-term funding for adaptation projects that build the resilience of climate-vulnerable communities. The first close of GAIA builds on the success of our Climate Investor One, Two and Three equity funds, which have mobilised investment in more than 50 climate-focused projects across emerging markets."

GAIA contributes to seven of the UN Sustainable Development Goals: (5) Gender Equality, (6) Clean Water and Sanitation, (7) Affordable and Clean Energy, (9) Industry, Innovation and Infrastructure, (11) Sustainable Cities and Communities, (13) Climate Action and (17) Partnerships for the Goals.

Notes to Editors

¹ United Nations Environment Programme (UNEP) Adaptation Gap Report 2023 — estimates the global adaptation finance gap at between USD 194 billion and USD 366 billion annually.

² Barbados, Benin, Costa Rica, Cote D'Ivoire, Dominican Republic, Ghana, Guatemala, India, Indonesia, Jamaica, Kenya, Mauritius, Mongolia, Morocco, Panama, Peru, Philippines, Tanzania and Togo.

About GAIA:

For more information about GAIA, please visit:https://www.greenclimate.fund/project/fp223

About MUFG:

Mitsubishi UFJ Financial Group, Inc. (MUFG) is one of the world's leading financial groups. Headquartered in Tokyo and with over 360 years of history, MUFG has a global network with approximately 2,000 locations in more than 40 countries. The Group has about 150,000 employees and offers services including commercial banking, trust banking, securities, credit cards, consumer finance, asset management, and leasing. The Group aims to “be the world's most trusted financial group" through close collaboration among our operating companies and flexibly respond to all of the financial needs of our customers, serving society, and fostering shared and sustainable growth for a better world. MUFG's shares trade on the Tokyo, Nagoya, and New York stock exchanges. https://www.mufg.jp/english.

About FinDev Canada:

FinDev Canada is Canada's bilateral Development Finance Institution (DFI), supporting development through the private sector. We provide financing, investment, and blended finance solutions, as well as technical assistance and advisory, to promote sustainable and inclusive growth in emerging markets and developing economies (EMDEs), in alignment with the Sustainable Development Goals (SDGs) and Paris Agreement commitments. FinDev Canada is a wholly owned subsidiary of Export Development Canada (EDC). www.findevcanada.ca.

About CFM:

CFM is a climate-focused blended finance investment manager operating in emerging markets across Africa, Asia, and Latin America. CFM raises and deploys blended climate finance funds, working in partnership to deliver climate-resilient solutions at scale and pace. With over USD 2.8 billion in assets under management and targeting an additional USD 4 billion, CFM's private equity and private credit facilities address key areas of climate change mitigation and adaptation, including renewable energy, green hydrogen, energy transmission, water, waste and sanitation, and biodiversity and oceans infrastructure. CFM currently has 50 active projects across its Climate Investor One, Two and Three equity funds and has recently expanded into private credit through the GAIA Climate Loan Fund. CFM's funds are supported by public and private sector organisations, with public capital deployed strategically to balance risk and mobilise private sector capital, enabling investment across the project lifecycle - from development to construction and operation. Established in 2015, CFM is a joint venture between Dutch development bank FMO and Sanlam InfraWorks of the Sanlam Group of South Africa, with offices in The Hague, Cape Town, Singapore, and Bogotá. www.climatefundmanagers.com.

About Green Climate Fund

The Green Climate Fund (GCF) is the world's largest dedicated climate fund. GCF's mandate is to foster a paradigm shift towards low emission, climate-resilient development pathways in developing countries. GCF has a USD 18 billion portfolio (USD 66.5 billion including co-financing) delivering transformative climate action across 314 projects in 133 countries. It also has a readiness support programme that builds capacity and helps countries develop long-term plans to fight climate change. GCF is an operating entity of the financial mechanism of the United Nations Framework Convention on Climate Change (UNFCCC) and serves the 2015 Paris Agreement, supporting the goal of keeping average global temperature rise well below 2°C. Homepage | Green Climate Fund

About Pollination

Pollination is a specialist climate and nature solutions firm, dedicated to accelerating the shift to a net zero, nature positive and resilient future. Launched in 2019, the organisation has a presence across The Americas, EMEA and Asia Pacific. It works with financial institutions, corporates and governments to design and implement ambitious transition strategies. Pollination brings together world leaders across finance, investment, corporate governance and strategy, technology, law and policy; allowing it to connect dots and see around corners. It provides best-in-class strategic advice, execution and transaction support, as well as a pipeline of climate and nature technologies and projects for those seeking to access transition opportunities. https://pollinationgroup.com/

For more information, please contact Sophie Blythe: s.blythe@climatefundmanagers.com.

Disclaimer

CFM is a manager of alternative investment funds and has obtained an AIFMD license from the Dutch Authority for the Financial Markets (Autoriteit financiële markten) pursuant to section 2:65 of the Dutch Act on Financial Supervision (Wet op het financieel toezicht). CFM is included in the public register maintained by the AFM on its website under license number 15004367.). CFM is the appointed fund manager of GAIA Climate Loan Fund SCSp, a special limited partnership (société en commandite spéciale) established under the laws of the Grand Dutchy of Luxembourg.