Closing the gap between finance and climate mitigation actions: a financial mechanisms deep-dive

Accessing climate finance remains a challenge for developing and less developed countries. To cover the costs of mitigation actions, countries tap into national public funds, international public finance, and private sector investments. However, the level of success in accessing finance continues to be low. Looking at Nationally Appropriate Mitigation Actions (NAMAs) using the Ecofys NAMA database, one can see that out of 259 NAMAs developed since 2010, less than 9% have succeeded in securing funds and started implementation. Throughout the work under the Mitigation Momentum Project, the experts of Ecofys, a Navigant company, have highlighted this trend and identified the lack of successful financial mechanisms attached to NAMAs as one of the main reasons behind it. This paper investigates which factors make a financial mechanism successful. In their research, the experts focus on the energy sector since it is the largest contributor to greenhouse gas emissions and the sector with the largest share of NAMAs. The resulting analysis highlights which conditions are a prerequisite to successful financial mechanisms and provides recommendations to stakeholders in the climate finance community.

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