National climate finance vehicles

The urgent need to close the climate investment gap is a pressing issue for nations across Asia and the Pacific. The Asian Development Bank (ADB) estimates that developing Asia alone requires an estimated infrastructure investment of $1.7 trillion annually by 2030 to ensure that climate and development goals will be met. However, investments are falling significantly short, while the capacity of public finance to close the gap alone is insufficient. Strategic use of public financing to leverage climate-aligned private investment is therefore critical to mobilizing the necessary resources to support low-carbon, climate- resilient (LCCR) development pathways. This working paper developed under ADB’s Nationally Determined Contribution (NDC) Advance technical assistance platform sets out the important role that national climate finance vehicles can play in stimulating private investment in LCCR development. The paper also describes key challenges and solutions to successfully establishing and operating a financing vehicle in a developing country. Informed by three case studies of national financing vehicles from Australia, Indonesia, and Thailand, the paper presents a model design framework and key readiness criteria defining the key enabling factors and design choices for national climate finance vehicles to support the achievement of LCCR investment scale-up effectively. The working paper concludes with key recommendations for developing member countries (DMCs) to inform their approach to designing and operationalizing a climate finance vehicle.

source :

https://www.adb.org/publications/national-climate-finance-vehicles