UK PACT: Driving innovative and inclusive low-carbon solutions

Driven by the urgent need to meet Paris Agreement targets, the UK's International Climate Finance commitment of £11.6 billion up to 2026 has been a significant step forward in funding. This substantial commitment signals a clear dedication to addressing the pressing challenges posed by climate change, particularly in the countries that are often the most impacted. It underscores the necessity of delivering climate finance both rapidly and effectively, ensuring that each pound spent creates tangible, lasting impacts. In this context, the UK PACT program is a major climate mitigation fund aimed at fulfilling the UK's International Climate Finance commitments.

Challenge

One of the most critical aspects of effective climate funding is bridging the gap in financing for technical assistance projects, which is pivotal to ensuring that they are sustainable and impactful. In a world where public financing is increasingly constrained, climate finance should aim to catalyse investments from the private sector and other sources for sustainable impact.

As part of UK PACT, the Green Recovery Challenge Fund (GRCF) funded technical assistance projects to support low-carbon transitions in Overseas Development Aid eligible countries across Latin America, Sub-Saharan Africa, and Asia. This is also supported by the Nigeria Country Programme, which provides specific funding for projects advancing nature-based solutions in-country. ICF was the fund manager for the GRCF and the Nigeria Country Programme.

The approach to implementing successful projects must be demand-driven, taking into account the specific and varied challenges faced by different countries. This means engaging with local stakeholders to co-create solutions tailored to the needs and contexts of each region. This approach also ensures projects demonstrate additionality and unique benefits that are not duplications of existing efforts. Identifying and addressing these needs ensures support provided is both necessary and effective.

Moreover, technical assistance projects must prioritise gender equality and social inclusion (GESI), integrating this from the outset to build resilience and address the needs of those who are most vulnerable to the adverse effects of climate change.

Solution

We provided ongoing support and expertise during implementation of technical assistance programs to help partners to navigate complex funding landscapes and enhance their internal capacity for delivery.

Our in-depth research and demand scoping initiatives identified demand-driven priority sectors for funding. Each call for proposals was co-created in collaboration with local FCDO teams, recognising specific contexts. Effective monitoring and consistent one-to-one support facilitated engagement with local implementing partners, and we provided extensive guidance to ensure all applicants were equipped with the tools to apply for funding.

We actively collaborated with local counterparts to promote locally driven initiatives and country ownership, encouraging solutions that targeted local contexts and needs. From the initial application for funding, we also integrated GESI into all GRCF and Nigeria Country Programme projects, supported by one-to-one tailored support so that the projects were inclusive and addressed the needs of local communities, particularly the most marginalised. All projects were selected through a set assessment process—covering sustainability, additionality, value for money (VfM), and GESI—to select the most impactful projects to be carried forward.

Our team also supported the delivery of high-quality proposals for projects with meaningful outcomes, consistent oversight, and transparent use of funds. We streamlined fund management with integrated solutions for due diligence, compliance, and financial monitoring. We also adapted to COVID-19 by leveraging technology for remote engagement, maintaining momentum despite restrictions on physical interactions.

Finally, we implemented a range of communication and engagement strategies to effectively reach our target audiences and highlight the successes of projects. Knowledge sharing played a crucial role, allowing us to disseminate best practices and lessons across regions and sectors. We shared insights through project case studies, learning papers, and regional events between grantees. We also collaborated closely with partners and sector experts to expand the reach and impact of projects to drive transformative change.

Results

We supported eight competitive funding calls for proposals and the implementation of 49 country-led solutions to address local challenges. These projects spanned a diverse range of sectors, including greening financial systems, developing nature-based solutions, accelerating clean energy transitions, and electrifying urban mobility—as well as the design and implementation of monitoring, reporting, and verification tools for forests, land use, and agriculture.

A key element of our successful fund management was the mainstreaming of GESI principles throughout the program. This ensured that the projects not only addressed environmental challenges and long-term sustainability but also promoted social equity and inclusivity, empowering marginalised groups, and fostering equal opportunities.

This holistic approach underscores our dedication to fostering lasting impact. From training for local farmers on sustainable agriculture practices to the issuing of national green bonds, the tangible impacts of the GRCF are already being seen. The GRCF played a pivotal role in initiating transformative changes within key development sectors, driving forward sustainable practices and supporting the low-carbon transition in meaningful ways.