Initial government update on UK aid for energy transition - Independent Commission for Aid Impact

Introduction

The Independent Commission for Aid Impact (ICAI) review of UK aid for energy transition was published on 5 November 2025. The government’s response was published on 16 January 2026.

The government provided ICAI with a progress update in June 2026, which we have published below.

Recommendation 1

Recommendation 1: The UK should publish a comprehensive energy transition strategy with a clear definition and theory of change, which also reflects poverty reduction and inclusion goals. (Partially Accept)

Progress

The UK published its ICF4 strategy on 22 June 2026. A summary of our approach to energy transitions, and a clear definition, was included as part of this strategy, including outlining our three main objectives: Transform energy supply, access, and end use sectors; Unlock large scale public and private investment for energy transitions in priority EMDEs; and Catalyse green jobs, growth and wider shared prosperity and security in priority EMDEs.

As outlined in our initial response, the UK remains committed to poverty reduction and inclusion goals, including gender equality, and these goals are firmly integrated into UK programmes and projects.

The UK also has a summary theory of change for the ICF4 energy mission.

Recommendation 2

Recommendation 2: The UK should take a portfolio-level approach to identifying and allocating funding between different bilateral and multilateral channels, notably between the multilateral climate funds, based on comparative advantage and value for money. (Accept)

Progress

We have established an EMDE Energy Transitions cross-government Group to strengthen strategic coordination of the UK’s EMDE energy transitions portfolio, across both ODA and non-ODA levers. The new Group, co-chaired by DESNZ and FCDO, oversees HMG’s EMDE energy transition strategy, country prioritisation across the portfolio, and ICF Energy Transition portfolio coherence, coordination and evolution, ensuring alignment with the wider HMG objectives. It establishes links to broader governance mechanisms to better serve Ministers and SROs, through promoting good flow of information, supporting lesson learning, delivery progress and implementation, and helping shape strategic conversations.

We are also strengthening how we manage complementarities between the different Multilateral Climate Funds (MCFs) based on their comparative advantage and, more broadly, have been building our work to improve the long-term collective performance of these specialised Funds. This is consistent with the Government’s wider ODA reset, which is taking a more strategic approach to the complementary use of multilateral and bilateral channels to maximise overall impact. We recognise that these channels play different but complementary roles. For instance, we see the MDB-system as the backbone of our portfolio, essential for providing scale and implementation capacity. The GCF is a highly inclusive and flexible fund, including through its direct access entities, private finance capabilities and readiness programming. And the CIFs is a key vehicle for incentivising innovation at scale across the MDB system in frontier themes through its programmatic approach, and private capital mobilisation through instruments such as the CIF Capital Markets Mechanism (CCMM) and AMPLIFi – a new modality to deploy highly flexible risk mitigation instruments for energy systems transformation. Our wider programming and its coordination at portfolio and country level is designed to complement these larger multilateral channels.

We are therefore developing a portfolio approach to ensure that UK climate finance is deployed through the most effective route for a given country, thematic or investment stage context. As part of this, we will seek to better integrate our bilateral and multilateral investments, combining country presence and global tools and expertise, with international influencing in the MDBs and climate funds.

Recommendation 3

Recommendation 3: The UK should establish clear, publicly accountable departmental roles with joint accountability to strengthen decision making and coordination on energy transition. (Accept)

Progress

ICF4 is delivered jointly by FCDO, DESNZ, Defra and DSIT, supported by strong cross-government governance at both official and ministerial levels to oversee spend. All departments work towards a shared overall objective, while playing distinct roles: DESNZ leads on clean energy transitions, industrial decarbonisation and carbon markets; FCDO leads on energy transitions in less developed economies, and on adaptation and wider development outcomes; and Defra leads on nature and biodiversity.

For the next ICF period, we have strengthened cross-government governance to ensure strategic coherence and maximise impact. The ICF Management Board has been enhanced to include Director-level representation and will report to the Ministerial ODA Delivery and Impact Board, with links into the tri-ministerial governance of the 2035 Strategic Framework on Climate, Nature and Energy. In addition, the EMDE Energy Transitions cross-HMG Group (as noted under Recommendation 2) will feed into the ICF Management Board, helping to ensure coherence across the portfolio. Further information on our strategic approach is set out in the ICF4 strategy, including the agreed priorities that will guide delivery and provide a clear collective strategic direction across departments.

Recommendation 4

Recommendation 4: The UK should standardise and strengthen the implementation of monitoring and learning across its energy transition portfolio, particularly accountability for reporting and the use of data on transformational change, financial leverage, and the additionality of UK finance. (Accept)

Progress

The UK established a new portfolio-level Monitoring, Evaluation and Learning (MEL) programme through a competitive procurement in January. Additionally, we conducted a cross-government ICF Evidence Priority exercise and identified key energy transition questions for the Portfolio-Monitoring, Evaluation and Learning (PMEL) programme. We continue to enhance our collection and use of data by strengthening data quality and refining KPI methodologies, ensuring decision-makers have access to robust, reliable evidence and that results are readily available. The cross-government EMDE Energy Transitions group also supports learning, best practice sharing and joint reporting at the strategic and portfolio level.

Recommendation 5

Recommendation 5: The UK should clarify the role of its country partnerships and international alliances in supporting energy transition, introduce more realistic targets for the JETPs, and create robust performance frameworks for alliances. (Partially Accept)

Progress

Where the UK allocates ODA to partnerships and alliances, robust frameworks are established at the outset and are used to monitor progress, as is the case with the South African Just Energy Transition Partnership (JETP). The UK recently published an Annual Review of the South African JETP ODA programme (April 2026).

More broadly, the JETPs remain a shared initiative under the International Partners Group (IPG), private finance, and partner countries. Under the French G7 Presidency, the IPG are considering the impact of the JETPs and progress towards goals and targets. The IPG have undertaken their inaugural meeting and plan further review throughout the year. Individual JETPs have their own in built mechanisms which provide a complimentary perspective on progress and the UK is reviewing its contribution. In addition, the UK and EU (as JETP co-leads) are working with partners in Viet Nam to support the commissioning of a biennial review for JETP which is expected to report later this year. The GCPA Finance Mission is aligning with these lessons, including publishing timebound Action Plans agreed with partner countries, underpinned by activity programmes to monitor and track delivery and performance over time.

International alliances, alongside country partnerships, are a key element of our ICF Strategy and ICF4 Energy Mission Theory of Change, with clear rationale for the role that they can play in the UK’s support for global energy transition. We keep our support for alliances and their impact towards our overarching objectives under review and seek to bring together or consolidate their efforts wherever possible. For example, ministers recently agreed to merge the Energy Transition Council (ETC) with the Global Clean Power Alliance Finance Mission (GCPA FM) to maximise the impact of international coordination on clean energy transition, through tailored solutions in dedicated activity plans for priority countries. This work will be supported by the Powering Past Coal Alliance (PPCA), Green Grids Initiative (GGI) and wider alliances as appropriate, mirroring the coordination example in the report.

Recommendation 6

Recommendation 6: The UK should clearly articulate its objectives for mobilising additional finance, distinguishing between support for countries at different development stages and across the investment cycle. (Accept)

Progress

The ICF4 Strategy articulates the UK’s objective to mobilise significantly increased volumes of public and private finance by deploying the full range of UK levers—ODA, non-ODA finance, and diplomatic and regulatory influence—as part of a single, integrated approach. It sets out a coherent mobilisation model, combining catalytic public finance, blended finance instruments, market development and MDB reform to unlock capital at scale. The Strategy also demonstrates a clear distinction in support across country contexts: accelerating climate action for the poorest, most climate vulnerable and on the most transformative issues, while focusing on large-scale investment mobilisation, pipeline development and market creation in emerging markets and developing economies. In parallel, it sets out a comprehensive approach across the investment cycle—ranging from strengthening enabling environments and domestic systems, through project preparation and de-risking, to mobilising and scaling private capital—showing how UK interventions collectively address barriers to finance and unlock flows at each stage.

Taken together, the Strategy provides a clear and structured articulation of how the UK will mobilise finance, differentiated by country needs and applied across the full investment lifecycle, and we are translating this into our portfolio activities. For instance:

The UK is working through the CIF to ensure that there are differentiated approaches to finance mobilisation across country context, thematic areas, technologies and stages of the investment cycle, and these continue to evolve.
We continue to mobilise finance under the Global Clean Power Alliance. Throughout 2026, the Finance Mission will make progress and help mobilise investment for partner country-led priorities, through improved country readiness for private finance, addressing regulatory barriers, supporting investment plans and the preparation required for bankable projects, with delivery in frontrunning countries by COP31.
And, the UK is using its role on the Green Climate Fund (GCF) Board to prioritise support for the poorest and most climate‑vulnerable countries, including Least Developed Countries (LDCs) and Small Island Developing States (SIDS), by accelerating access, strengthening country‑led programming, and ensuring a high share of resources is directed to these groups.