COFIDES unveils the Kuali Fund, a pioneer in climate mitigation and adaptation

COFIDES has launched today the Kuali Fund, a pioneering Spanish impact investment fund focused on climate mitigation and adaptation, with a target size of over 200 million euros. Kuali Fund aims to accompany countries in Latin America and the Caribbean, and India in their low-carbon development pathways while increasing their climate resilience.

The Fund is expected to support the avoidance of Greenhouse Gases (GHGs) emissions over 4 million tons of CO2 equivalent over its 10-year lifespan while addressing the adaptation and resilience needs of 500,000 smallholder farmers and SMEs. This will be achieved through the investments in 25 financial institutions and climate solution providers in Latin America and the Caribbean, and India, including also grants for non-reimbursable technical assistance.

At the event ‘Generating Impact Through Climate Finance’, which brought together the fund's main investors at COFIDES, the company’s chairperson and CEO, Ángela Pérez, announced that Kuali Fund, whose financial structure has been carried out by COFIDES, has already completed its first closing with 129 million euros with the contribution of the Green Climate Fund, and the contributions of the European Union, the Spanish Cooperation, through the Fund for the Promotion of Development (FONPRODE) and COFIDES.

INNOVATIVE FUND

“This is a milestone in COFIDES' commitment to climate finance. It is the first COFIDES project to be approved by the Green Climate Fund, an essential partner together with the European Union, in mobilising resources to boost resilience and adaptation of vulnerable communities. We are pleased to have led this innovative fund as a structurer, with which we contribute to the mobilisation of private capital for climate mitigation and adaptation, combining social impact and financial sustainability,” said Ángela Pérez.

THE GREEN CLIMATE FUND: TO DRIVE SCALED CLIMATE INVESTMENT

Henry Gonzalez, Chief Investment Officer at the Green Climate Fund (GCF), expressed strong support for the Kuali Fund, stating: ““The Green Climate Fund is proud to support the Kuali Fund and its pioneering approach to climate action. By mobilizing greater private sector investment, the Fund plays a critical role in scaling up adaptation and mitigation efforts. Its commitment to fostering greener, more inclusive business models aligns seamlessly with the GCF’s mission and strategic priorities.”

José Carlos Villena, Director of Development Partnerships at COFIDES, moderated the roundtable ‘Mobilizing Investment for Climate Finance’ featuring Agustín Vitórica, Co-CEO of GAWA Capital; Fernando Jiménez-Ontiveros, Director of Financial Cooperation and General Management of the Spanish Fund for Sustainable Development; Franck Viault, Head of Cooperation at the EU Delegation to India and Bhutan; Horst Pilger, Team Leader for Global Gateway, Investment and Private Sector (Regional Programmes for Latin America and the Caribbean) at the European Commission; and Eloy González de la Peña, Investment Advisor at iCapital.

GLOBAL GATEWAY & TEAM EUROPE: INNOVATIVE FINANCING STRATEGIES TO ATTRACT PRIVATE CAPITAL

The representatives from the European Union, Franck Viault and Horst Pilger stressed that “a fund like Kuali illustrates perfectly how Team Europe deploys innovative financing mechanisms to attract much needed private investments in partner countries. Experience has shown that EU contributions, by providing guarantees and reducing investors’ risks, allow to scale up funding by a ratio 1:9,” and that “the EU regards Kuali Fund as a suitable instrument in the ongoing effort to address climate change and its consequences and is perfectly aligned with the European Union Global Gateway strategy.”

Meanwhile, Fernando Jiménez-Ontiveros affirmed that "the Kuali Fund represents a strong commitment to sustainable financing, enabling small farmers and SMEs to access key resources to strengthen their climate resilience and promote a greener economy. Through this initiative, Spain reinforces its leadership in impact investing, combining public and private financing to accelerate the transition to sustainable economic models in regions vulnerable to climate change.”

Finally, José Carlos Villena emphasized that "public-private partnerships are essential to achieving development goals." In his view, development finance institutions "must focus their efforts on establishing the necessary structures to align interests and attract private investment. Otherwise, the financing gap will remain unbridgeable."

The co-CEOs of GAWA Capital, the fund manager of the Kuali Fund, Agustín Vitórica and Luca Torre, highlighted that "at Kuali, we are proud to tackle one of the greatest challenges of our time: strengthening the climate resilience of the world's most vulnerable communities. Through strategic investments in financial institutions and climate solution providers, we facilitate access for small farmers and businesses to the resources they need to adapt to a changing climate and strengthen their operations. Our blended finance approach, supported by catalytic capital from the European Commission, the United Nations Green Climate Fund (GCF), and AECID, allows us to mitigate risk and enhance investment returns, attracting major institutional investors seeking both impact and financial profitability.”

Antonio Garrigues Walker, Honorary Chairman of GAWA Capital, emphasized that "in a context of declining public funds for cooperation in emerging markets, public-private partnerships are emerging as a key pillar for impact investment aimed at addressing the most urgent environmental and social challenges. These collaborative models allow us to combine the financial capacity and efficiency of the private sector with the strategic vision and reach of the public sector, maximizing private capital mobilization for transformative impact in vulnerable communities."

KUALI FUND: AN IMPACT FUND TO PROTECT THE MOST VULNERABLE

The Kuali Fund, led by COFIDES and managed by the Spanish private entity GAWA Capital, will mobilize over €200 million. It is backed by contributions from the Green Climate Fund (€25 million), the European Union—through the Latin America and the Caribbean Investment Facility (LACIF) and the Asia-Pacific Investment Facility (APIF) (€12 million), the Development Promotion Fund (FONPRODE) of the Spanish Agency for International Development Cooperation (AECID) (€50 million), and COFIDES (€5 million). These contributions will act as catalysts for private investment, significantly reducing risk and improving returns. Additionally, the fund includes a €12.25 million technical assistance facility.

The Fund will facilitate the transition toward greener and more inclusive business models by enabling financial service providers to offer green and climate-focused financial products to both SMEs and small-scale farmers. The Kuali Fund will also support companies with innovative climate solutions, expanding the availability of mitigation and adaptation strategies.

ABOUT COFIDES

COFIDES is a state-owned trading company that manages state funds, as well as its own resources and those of third-party institutions. COFIDES's mission is to support the internationalization of the Spanish economy, attract foreign investment into strategic sectors in Spain, promote the impact economy, and contribute to global economic development. COFIDES is also instrumental in strengthening the solvency of Spanish companies, particularly in response to challenges such as the COVID-19 pandemic. COFIDES’s shareholders include the Spanish State, Banco Santander, Banco Bilbao Vizcaya Argentaria (BBVA), Banco Sabadell, and CAF-Development Bank of Latin America.