Financing

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Thematic lead: SouthSouthNorth (SSN)

Relevance

The low-carbon, climate resilient pathways set out in country’s NDCs and associated plans, require significant investment for their implementation. Attracting the scale of investment, much of which will need to come from the private sector, at the speed needed to meet national and global targets is not straightforward.

Key to mobilising investment is a strong enabling environment that speaks to a range of actors that can foster and accelerate climate compatible investment. This includes the country risk and stability of regulatory and fiscal frameworks, but also the appropriate incentives put in place through clear policy and regulation.

Countries must also foster the development of investment opportunities into viable projects that can access capital. This requires deep sector understanding of targets, technologies and the needs of differing investors that may be involved at progressive project stages. Appropriately communicating and engaging with project developers, investors (including public and private sector) and policy shapers will not only lead to a joint vision of investment opportunities, but will also increase the visibility and appetite for such investments both domestically, regionally and internationally.

Tasked with NDC implementation following the rapid ratification of the Paris Agreement support is needed to accelerate countries through these processes, that will have shared as well as regional, country and sector-specific challenges. It is critical that we test and develop best practice guidance if we are to deliver significantly scaled up investment in NDCs.

 

Objectives of the thematic working group

  • Strengthening the understanding of effective use of domestic finance for climate action

  • Identifying and communicating appropriate financial incentives and instruments that can scale up private investment

  • Understanding the role of and need to blend national and international, public and private funding sources in NDC implementation

  • Supporting the development of investment strategies, investment opportunities and measures that increase the visibility of investment opportunities in NDC implementation

 

Insights into the work

General description

Mobilising investment for NDC implementation spans national and international, public and private finance. It includes the identification and assessment of flows; the development of financing and investment strategies, as well as the policies, regulation and financial instruments that can be put in place to reduce investment risks (and to increase returns). The objective being not only to support NDC implementation, but to allow for increased ambition in delivering on global targets.

The finance thematic group endeavours to support countries in mobilising investment to this end and to bring lessons learnt from the NDC Support Cluster countries into international dialogues and processes. The priorities set by the group based on the expertise and of the projects pursued by those in the group, yet the role of the thematic group will ultimately be to encourage the pursuit of best practice in financing NDCs to stimulate greater ambition under the Paris Agreement.

The near-term priorities for the thematic group members include:

  1. Identifying the key entry points for mobilising private investment for NDCs and LEDS
  2. Highlighting the emerging use, combination and creation of financial instruments that reduce risks to private sector investment
  3. Highlighting the role of public policy and finance in private finance mobilisation for NDCs

Within the finance cluster, eight implementing organisations with different expertise work together: Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ), the Energy Research Centre of the Netherlands (ECN) in cooperation with the NewClimate Institute (NCI), SouthSouthnorth (SSN) in cooperation with the Climate and Development Knowledge Network (CDKN) and the Low Emission Development Strategies Global Partnership (LEDS GP), the United Nations Development Programme (UNDP), and the World Resources Institute (WRI). Additionally, the Center for Clean Air Policy (CCAP), and Climate Analytics (CA) collaborate closely with their IKI projects.

 

Current activities

The thematic group on finance is refining the key learning questions following engagement with institutions and countries at the Global NDC Conference in Berlin, May 2017. Through this it will finalise its work plan and outputs. It is also working on a key list of expertise in financing NDCs that member countries can draw on through help desk support. 

 

Contact: Webster Whande (SSN)