Mobilizing Development Finance for Strategic and Scaled-up Investment in Climate Adaptation
This project aims to advance the mainstreaming of adaptation in development finance strategies, by helping multilateral development banks scale up investments in actions that align with country-defined adaptation priorities.
Addressing the substantial gap between current levels of financing for adaptation and what developing countries require to increase their resilience to climate change is critical to achieving the Paris Agreement’s adaptation goal.
Multilateral development banks (MDBs) have pledged to help address this gap by scaling up their provision of climate finance and by better integrating climate change adaptation considerations into their development finance portfolios. Mainstreaming adaptation considerations into MDB investments would increase the financing available to build resilience to climate change. At the same time, there is a need to ensure that these investments are supporting adaptation actions prioritized by developing country governments.
The “Mobilizing Development Finance for Adaptation” aims to generate the knowledge needed to advance the mainstreaming of adaptation in development finance strategies. This will help MDBs scale up investments in actions that are strongly aligned with country-defined adaptation priorities. It seeks to identify barriers—both within MDBs and developing countries—that limit the use of development financing to address national adaptation priorities and opportunities to overcome these constraints.
Through case study research in Kenya, Nepal and Peru, the research project is examining three key questions:
- What approaches are MDBs taking to mainstream adaptation in their development finance portfolios and overcome encountered challenges?
- How can developing countries better attract MDB development finance that addresses and is aligned with the adaptation priorities arising from their National Adaptation Plan and/or Nationally Determined Contribution processes?
- What is the potential to use innovative finance instruments to scale up financing for adaptation?
IISD is undertaking this research project in collaboration with the African Centre for Technology Studies based in Kenya, the Prakriti Resources Centre based in Nepal, and Libélula based in Peru.
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Libélula Case Studies
These three case studies from Peru examine efforts to increase finance for adaptation through multilateral development banks’ development finance portfolios, national adaptation financing strategies, and the use of payments for ecosystems services.
Prakriti Resources Centre | Mainstreaming Adaptation in Development Finance in Multilateral Development Banks
This case study explores challenges to scaling up finance for adaptation across different contexts and opportunities to overcome these constraints.
Prakriti Resources Centre | Strengthening National Strategies for Financing Adaptation in Nepal
This case study explores Nepal’s perspectives and needs in regard to increasing the volume and quality of finance for adaptation.
Prakriti Resources Centre | Innovative Financial Instruments for Adaptation
This case study provides the learning on scaling up finance for adaptation that emerged through the public and private sector collaboration to enhance food security through promoting climate resilient agriculture in Nepal.
NAP Global Network Blog | Unpacking Gender-Responsive Adaptation Finance: Key issues and the way forward
As finance for climate change adaptation is scaled up, there is a real opportunity to promote human rights and gender equality in line with the ambitions of the Paris Agreement.
Prakriti Resources Centre Blog | MDB Investment Can Support Climate-Resilient COVID-19 Recovery in Developing Countries
MDBs and the Government of Nepal can work together to factor climate adaptation needs in COVID-19 recovery investments.
Prakriti Resources Centre Blog | Scaling up climate adaptation actions through innovative financing instruments: A case of Nepal. (Sept 2022)
Innovative instruments are rarely used in developing countries like Nepal. Prakriti Resources Centre (PRC) in partnership with International Institute for Sustainable Development (IISD) analysed the project ‘Public and private sector collaboration to enhance food security through promoting climate resilient agriculture’ to draw learning on innovative financial mechanisms that can be used to scale up finance for climate adaptation in developing countries.
Prakriti Resources Centre Blog | Scaled up and reformed MDB financing for climate adaptation – the need of the day (August 2022)
Nepal is one of the most vulnerable countries to climate change. The country needs to invest a large sum of money to protect its people from adverse impacts of climate change. Estimated budget of National Adaptation Plan (NAP) to finance priority projects till 2050 stands at a whopping USD 45.9 billion. Multilateral Development Banks (MDBs) can play a significant role in meeting the deficit.
Prakriti Resources Centre Blog | Engaging MDBs in Financing the Government’s Adaptation Priorities (July 2022)
Nepal requires scaled-up finance to achieve the priority adaptation actions set out in its 2021 National Adaptation Plan (NAP) and 2020 Nationally Determined Contribution. MDBs can play a critical role in addressing the adaptation financing gap in Nepal.
African Centre for Technology Studies Blog | Fostering Greater Demand for Multilateral Development Bank Financing for Adaptation: Insights from developing countries
Initial research findings in Kenya, Nepal, and Peru highlight that MDB’s efforts to close the adaptation finance gap require input from developing country governments and alignment with nationally determined adaptation priorities.
African Centre for Technology Studies Blog | The Potential of Innovative Financial Instruments for Climate Change Adaptation
Well designed projects that blend public and private finance can help scale up investment in the rehabilitation and establishment of water infrastructure that increase resilience to climate change.
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