The International Climate Initiative (IKI)

Since 2008, the International Climate Initiative (IKI) has been financing climate-related projects in developing and newly industrialized countries, as well as transition countries in central and eastern Europe.

Objectives

IKI’s funding priorities are the mitigation of greenhouse gas emissions, adaptation to climate change, the conservation of natural carbon sinks (e.g. through forest protection) and the protection of biological diversity. IKI sees itself as a contribution to international environmental cooperation that complements “classic” development cooperation. However, IKI is also used to build strategic alliances with progressive developing countries in connection with the regular world climate conferences on the implementation of the UN Framework Convention on Climate Change (UNFCCC) and the Convention on Biological Diversity (CBD). An important element is to implement and further develop the Nationally Determined Contributions (NDCs).

Key developments

IKI has originally been funded by the Federal Ministry for the Environment, Climate Action, Nature Conservation and Nuclear Safety (BMUKN). Since 2022, IKI has been administerd by the Federal Ministry for Economic Affairs and Energy (BMWE) in close cooperation with BMUKN and the Federal Foreign Office (AA). It is managed by the federally owned Zukunft – Umwelt – Gesellschaft (ZUG) gGmbH, which is responsible for the technical support, programme management and evaluations of the projects.

IKI’s funding portfolio has changed considerably over the years. In addition to the classic implementing organizations such as GIZ and KfW, these also include international organizations, non-governmental organizations and research institutions. In the meantime, the IKI has aligned its funding more strategically and wants to support developing countries in implementing their commitments under the UNFCCC and CBD. In addition, it wants to promote innovative approaches that can generate an impact beyond the individual project or are transferable. Over the years, this has led to larger project volumes and increasingly transnational projects, which, however, has made access more difficult for new and especially smaller organizations. The IKI has countered this by differentiating its funding. There are now several funding lines which are defined in the Strategy 2030:

• Thematic and country specific selection procedures, which fund specific thematic priorities in selected countries through high funding volumes,
• Non-competitive selection procedures for interface projects in priority countries and contributions to international funds and intitiatives, and
• Medium and Small Grants, which are more tailored to smaller organizations and projects.

Since 2008, IKI has approved funding for more than 1.100 climate and biodiversity projects worldwide. Since 2024, the funding is focussing on 14 priority countries IKI has selected because the have a high share of greenhouse gas emissions and globabl biodiversity hotspots.

In terms of transparency, the IKI is a pioneer in German climate finance, with comparatively detailed information on funded projects on its website. Since 2016, IKI has published updated information on funded projects every quarter in accordance with the IATI (International Aid Transparency Initiative) standard.

The monitoring and evaluation system has also been expanded over the years, so that IKI now has an elaborated impact monitoring system for its projects. In 2015, IKI introduced a standardised monitoring system, through which it also enables reporting according to standard indicators (e.g. on the number of tonnes of CO2 reduced or the number of people supported in climate change adaptation). The 1st project evaluation cycle took place from 2010-2012. From 2017 to 2022, about 190 projects were externally evaluated in the second evaluation cycle. In addition, a cluster analysis and two strategic evaluations were conducted. The results are publicly available. From 2021 to 2022, the 3rd project evaluation cycle was implemented, in which all completed projects are reviewed in a standard procedure. Reports from IKI evaluations are publicly available.

IKI has also introduced a gender strategy with accompanying measures and environmental and social safeguards system which applicants need to follow as part of project development and implementation. Since 2022 IKI has installed an Independet Complaint Mechanism. It consists of an independent expert panel and a complaints office. It is responsible to deal with complaints regarding non-compliance with negative social and/or environmental impacts and/or misuse of funds and corruption  and is aligned with Germany’s human rights treaty obligations as well as standards such as the UN Guiding Principles on Business and Human Rights. In 2022 and 2023 there were two complaints cases on which public information is available.

Funding volume

Originally, the funds for financing the IKI came from the auction proceeds of a small portion of the CO2 certificates in European emissions trading; in the meantime, however, the IKI is an ordinary budget item in the BMWE budget. For the years 2008-2012, the IKI was endowed with just under 120 million euros annually. Since then, it has grown continuously and has a volume of 735 million euros in 2024, raising the total volume to 6.4 billion euros. (as of July 2025)