This is a fund set up for a specific purpose. It is resolving in the sense that it is self-replenishing, utilising interest and principal payments on old loans to issue financing for new projects.

Instrument category

National, regional and municipal funds

Implementation status

Moderate - tried and tested

Enabling conditions and success factors
  • Most revolving funds require borrowers to meet some level of creditworthiness to ensure that funds are repaid and made available for the next project, which could be a problem for cities with a low rating.
Instrument benefits
  • The instrument is relatively simple, and the revolving aspect makes for higher leverage.
  • Major default risks fall onto the project proponent, not the lending bank and main costs are born by the lending institution.
Challenges and risks to implementation
  • If not designed well and incentives are not understood fully, the fund may fail to be replenished.
Case studies

The Thailand Energy Efficiency Revolving Fund (TEERF)

View case study

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