The Lab – Phase 2 Synthesis Report

Private investors – often supported by public policy and finance – are already channeling significant amounts of money into the low-carbon economy in countries around the world. However, much more investment is needed in order to tackle the climate challenge.

The Global Innovation Lab for Climate Finance (The Lab) addresses these needs by supporting the identification and piloting of cutting edge climate finance instruments that can drive billions of dollars of private investment into climate change mitigation and adaptation in developing countries.

The Lab distinguishes itself from similar initiatives by quickly moving from talk to action to develop implementation-ready projects that address both investors’ and recipient countries’ needs.

In May 2014, The Lab organized an international ‘call for ideas’, which resulted in more than 90 proposals that were screened by The Lab in a first phase on their actionability, innovativeness, as well as catalytic and transformative potential. Based on these findings, principals selected seven instruments for in-depth analysis in Phase 2.

The Lab Secretariat presented the results of this analysis at the Lab Advisor Meeting on 20 October 2014 in Venice, where Lab Advisors, in consultation with their Principals, narrowed these seven to four instruments for further, more detailed analysis our from seven instruments to move forward to Phase 3 of The Lab’s work. These are:

  • The Climate Development & Finance Facility, which aims to create a new entity to provide fast-track finance to climate mitigation projects
  • Energy Savings Insurance, which would guarantee financial savings from company energy efficiency investments, mitigating a financial barrier to those investments
  • The Long-term Currency Swap, which would catalyze renewable energy investment in developing countries by mitigating exchange rate risk and supporting the development of commercial currency swap markets 
  • Agricultural Supply Chain Adaptation Facility, which would provide long-term finance for investments in climate-resilience and knowledge to farmers along the supply chain of agricultural businesses

This report summarizes The Lab’s analytical findings from Phase 2 and shares lessons learned from the seven instruments under analysis. The Lab also presents the next steps to further refine and stress test the four selected instruments. The final aim in Phase 3 is to suggest improvements on the instrument design, identify remaining risks that have to be addressed, and outline pathways for implementation.

The Lab Secretariat remains committed to facilitating broader outreach and extensive consultation to accelerate the development of these four instruments, with both developed and developing country stakeholders.