Climate Adaptation Finance: Unlocking Private Finance

Climate change adaptation is a critical yet underfunded component of the Paris Agreement goals. While public sector contributions dominate, private finance from institutional investors and commercial banks accounts for less than 3% of total adaptation finance.

A New Collective Quantified Goal (NCQG) agreement at COP29 offers a great opportunity to expand the private sector's role. Institutional investors and commercial banks are crucial in bridging the finance gap. Read the report to understand its potential.

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Key takeaways

Significant finance gap

• Developing countries need adaptation finance flows to increase fourfold.
• Estimated gap of USD 194-366 billion per year.

Barriers to private finance

• Lack of standard definitions and market language.
• Insufficient climate risk information.
• Long timelines for investment returns.

Potential solutions

• Greater government support.
• Standardized approaches.
• Better information disclosure.

Opportunities for the private sector

• Leverage tools like debt-for-impact swaps and blended finance.
• Contribute significantly to climate resilience finance projects.