This evaluation of the Nordic Development Fund (NDF) climate portfolio is part of a larger evaluation that aims to determine whether Swedish development finance for climate mitigation is financing efforts that are likely to contribute to emission reductions that are large enough and can be realised quickly enough to significantly contribute to the Paris Agreement’s 1,5 C temperature objective. The evaluation covers at a selection of 18 NDF projects. Specifically, the evaluation aims to address the following questions:

I. Scale: Does Swedish development finance go to activities that have the potential to contribute to large-scale emission reductions/mitigation in developing countries?1

II. Time: Does Swedish development finance go to activities whose large-scale contributions can be realised in time, in line with the Paris Agreement?

By addressing these questions, the evaluation of the Nordic Development Fund portfolio aims to determine whether the portfolio is transformative enough to meet the commitments that Sweden has signed up to under the Paris Agreement. Understanding the transformative potential of finance for climate mitigation goes beyond a quantitative measurement of greenhouse gas emissions reductions. Instead, it requires analysis of the potential for wider structural change that could accelerate progress towards the rapid emissions reductions called for under the Paris Agreement. To address the potential for transformative change, this evaluation applies a methodology based on the Climate Investment Fund’s (CIF) Principles for Transformational Climate Finance. The NDF projects were evaluated against the CIF principles of Speed, Scale, Systemic Change and Relevance as well as Additionality. In addition, the evaluation gathered observations on the expected co-benefits of the projects reviewed, as well as the overall level of transparency in the documentation reviewed.