Climate finance: New research identifies what makes a financial mechanism successful
19th March 2018 by CMIA
In a new report, Ecofys, a Navigant company, has analysed which factors ensure a financial mechanism’s success in connecting climate finance to mitigation actions. The report, published as part of the Mitigation Momentum Project, describes the prerequisites for an effective mechanism and provides recommendations to stakeholders in the climate finance community.
To cover the costs of mitigation actions, countries tap into national public funds, international public finance, and private sector investments. Yet the level of success in accessing finance continues to be low, especially in developing countries. Most low carbon programmes, including Nationally Appropriate Mitigation Actions (NAMAs), face difficulty in achieving financial close. The new research has investigated which mechanism design could help to close this gap between finance and mitigation projects.
Among the new factors the expert team of Ecofys, a Navigant company, identified are scalability and replicability. The mechanism should be designed to make its associated programmes and projects scalable, so the investment volume could grow larger or be replicated in other countries or regions.
Find the full set of recommendations for the set up successful financial mechanisms in the report at mitigationmomentum.org.