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Crypto Climate Fund (CCF)
Crypto Climate Fund
A VEHICLE FOR BOOSTING AFFORDABILITY AND ACCESS TO CLIMATE FINANCE AT MINIMUM COST FOR END BENEFICIARIES
The current climate finance system is complex by design and requires the inputs of various intermediaries, each of which must cover their transaction and administrative costs for specific interventions.
Currently, when projects that deliver climate impact achieve borrowing internationally, it is done in hard currencies. Since outputs and products are typically sold to local markets in local currencies, there is a credit mismatch which poses a large repayment risk and ultimately prevents many climate projects from happening.
In the current state of climate affairs, this risk is being addressed with costly hedging tools. In the end, it is the most vulnerable that would pay for the costly and flawed institutional design of the current climate finance system.
The Crypto Climate Fund (CCF), an initiative of the Climate Platform, is a vehicle that seeks to improve access and affordability of climate finance while boosting benefits for end beneficiaries. The initiative proposes and facilitates the implementation of an approach for financing climate projects that eliminates the need for hedging costs while also reducing the number of intermediaries across the climate finance value chain.
The CCF will provide liquidity on highly concessional terms in crypto currency tokens to private sector sponsors for renewable energy, energy access, and agriculture projects.
Funding from CCF is accessible to projects that demonstrate potential according to the following 3 simple investment criteria:
- Climate impact potential: Projects must either reduce GHG emissions or improve adaptive capacity through generation of livelihoods for vulnerable people.
- Digital transformation potential: Projects must achieve some form of digital transformation, for instance through introduction of a crypto currency as means for payment of goods and products.
- Repayment potential: Projects must demonstrate financial viability with repayments potential to CCF in the same crypto of financing.
Case Study:
A renewable energy project is funded by CCF using the Shiba Inu tokens. Tokens are used to purchase renewable energy equipment from vendors accepting the token, or converted first in a token accepted by manufacturers.
The renewable energy project will then start selling its energy outputs collecting revenues in the same token, the Shiba Inu, thus achieving digital transformation for end users. With this approach, the developer won´t need to hedge currency volatility to meet repayment obligations. Shiba Inu is lended and Shiba Inu is collected. CCF will also provide terms which do not negatively affect end users in the event of high volatility of the provided token, so that final products are never sold at prices which become prohibitive to end beneficiaries.
The renewable energy project will then start selling its energy outputs collecting revenues in the same token, the Shiba Inu, thus achieving digital transformation for end users. With this approach, the developer won´t need to hedge currency volatility to meet repayment obligations. Shiba Inu is lended and Shiba Inu is collected. CCF will also provide terms which do not negatively affect end users in the event of high volatility of the provided token, so that final products are never sold at prices which become prohibitive to end beneficiaries.
Please click and download Crypto Climate Fund (CCF) to learn more about who we are and the services that we provide.
