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Sustainable cooling financial flows

Chilling Prospects 2022

Chapter 3.3

Chapter 3 overview
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Key messages

  • Financing access to sustainable cooling is complicated. Needs for cooling vary dramatically across businesses and populations, and cooling solutions tailored to different groups each call for their own unique financing mechanisms.
  • In 2021, we saw a breakthrough in public finance for sustainable cooling, with the World Bank and Green Climate Fund approving a new, USD 157 million Cooling Facility, which will work to expand access to sustainable cooling solutions in nine developing countries.

Finance for access to cooling is characterized by a diverse set of cooling needs that can be met with finance from an equally diverse set of financial sources or instruments. For example, cooling needs related to health services could be met by finance targeted at improved health care, cooling needs for agriculture could be met by finance for nutrition or agriculture business development, and cooling needs for human comfort could be met by finance for building or community development. The range of financial flows can be delivered through public procurement, grants, subsidies or commercial financing depending on the scale of investment and appetite for risk or sustainability of the business model for sustainable cooling. Over time, the types of instruments used to deliver on cooling needs will also change, as technologies and business models mature. 

Knowledge briefs have been developed on the challenges, barriers and opportunities related to financing access to cooling, as well as the potential for a framework for tracking access to cooling finance. Broadly speaking, access to cooling finance can be understood as public and private finance that supports enhanced affordability of — and access to — sustainable cooling solutions that support the cooling needs for food, nutrition and agriculture; health services; and human comfort and safety. But the appropriateness of access to cooling finance and the instruments used will vary according to local conditions, including public resources, poverty levels and tiers of energy access, among others. Examples of finance that support access to cooling can be seen in Table 3.2. 

Table 3.2: Indicative example finance flows tracked for sustainable cooling and access to cooling

International financial institutions and climate funds have a long history of financing cooling-efficiency projects in buildings, including for example through the International Finance Corporation’s EDGE programme, and through financing from the Climate Investment Fund and the Global Environment Facility (GEF).

In 2021 however, there was a shift beyond projects focused on efficient space cooling, with a significant amount of international climate finance mobilized for access to cooling.  In October 2021, the Green Climate Fund (GCF) approved a World Bank Cooling Facility with USD 157 million in direct GCF financing, which will be leveraging USD 722 million in World Bank co-financing. The facility will be administered by the World Bank and support projects in nine countries across the health, agriculture and space cooling sectors: Bangladesh, El Salvador, Kenya, Malawi, North Macedonia, Panama, Sao Tome and Principe, Somalia and Sri Lanka. The facility recognizes the wide range of cooling needs and priorities that come with a diverse set of challenges and solutions. In addition to being the largest mobilization of public financing dedicated to sustainable cooling solutions, the Cooling Facility is notable in that it explicitly aims to support both climate-change adaptation and mitigation, expecting to avoid over 16Mt CO2e and reach over 21 million beneficiaries. It thus supports the GCF goal of using 50 percent of its overall financing commitment to adaptation, but also serves to display how climate funds can use adaptation financing to support access to cooling. The facility will operate on the basis of a Gender Action Plan that ensures the finance is gender-responsive, aligns with and leverages existing World Bank gender strategies, and seeks to enhance the knowledge base on gender issues associated with access to sustainable cooling. [1] 

The availability of technical assistance to improve investment environments has grown significantly. The philanthropic CCC made USD 12 million available to support the implementation of cooling commitments in NDCs, including in Nigeria, where U4E will support energy and cost savings through a revision of MEPS for air conditioners. The World Bank Energy Sector Management Assistance Program (ESMAP) Efficient and Clean Cooling programme also has USD 15 million available to raise awareness, build knowledge, and integrate efficient clean cooling into World Bank operations. The GCF has also supported the use of GCF Readiness Programme funds for strengthening governance and institutional planning, including through NCAPs. The development of such plans is now being supported in over 20 countries, including in Cambodia and Indonesia where the Cool Coalition’s NCAP Methodology is being utilized to support sustainable cooling for all.

Country plans and commitments signal future financial flow

NCAPs, as well as commitments in NDCs under the Paris Agreement, can serve as important market signals for investment. In follow-up to the India Cooling Action Plan, the World Bank commissioned a roadmap study that details the key policies, investment, and financing opportunities to support implementation of the India Cooling Action Plan.  

New initiatives and business models are also attracting more finance for access to sustainable cooling solutions. In Kigali, Rwanda, the Africa Centre of Excellence for Sustainable Cooling and Cold Chain  (ACES) has received project financing of at least USD 6.8 million to support its mission of using training, policy, and technology expertise to demonstrate sustainable cooling pathways that meet Africa’s social and economic cooling needs. The Basel Agency for Sustainable Energy (BASE) has estimated that USD 50 million worth of assets are under the Cooling as a Service (CaaS) servitization model, a figure that could grow to USD 300 million within the next four years. [2] In India, UNEP has partnered with the Alliance for an Energy Efficient Economy (AEEE) and Energy Efficiency Services Limited (EESL) to mobilize USD 50 million for sustainable cooling in agricultural cold chains through to the end of 2024. [3] 

The success of prizes

Prize challenges have been a commonly used tool to incentivize technological and business model innovation since 2017. The USD 2 million Million Cool Roofs Challenge used base grants and a cash prize to support cool roof installations and the development of supply chains in several high-impact countries for access to cooling. The USD 3 million Global Cooling Prize similarly awarded prizes to manufacturers of air conditioners able to demonstrate a unit with five-times lower climate impact than baseline units at no more than two-times the cost. Under the Efficiency for Access Initiative, the Global LEAP Awards continue to drive innovation in off-grid cooling, including awards for off-grid refrigeration and cold chain, and the USD 3 million Research and Development Fund has supported the development and trial of new technologies and approaches that make efficient cooling more accessible in weak- or off-grid areas.

Driven in part by the emissions reduction potential, a significant amount of funding for technical assistance for cooling has supported MEPS for air conditioners. Broadening this type of assistance to include domestic refrigeration and the meaningful implementation of passive cooling into building codes for example can support additional investment and may be attractive to governments based on the immediate development and adaptation benefits they can provide. Additionally, the private sector remains an active investor in cooling solutions and due to the sheer scale of the issue will be central to delivering sustainable cooling for all, but the scale of the investment remains difficult to track. 

Do you have data on access to cooling finance or details on specific projects that you would like to share or profile? SEforALL would like to learn more. Please email us at

Notes and references

[1] Consideration of funding proposals – addendum IXL funding proposal package for FP177. Green Climate Fund, 14 September 2021. Link. For Gender Action Plan, see Annex 8.
[2] Koegelenberg, Ilana, “Cooling in 2021: Growing Cooling-as-a-service Trend Expected to Accelerate,” Ammonia21, 30 November 2020. Link.
[3] Reducing food loss and increasing farmers’ income: Supporting efficient, climate-friendly agricultural cold chain in India. Clean Cooling Collaborative, 14 January 2021. Link.