Scaling up climate adaptation finance is critical to building global resilience to worsening climate impacts. While resilience investment is growing, it is far from what is needed. In 2019-2020, USD 46 billion was tracked in climate adaptation investment, compared to an estimated annual requirement of USD 140 to 300 billion annually in developing countries alone to address crucial climate-related risks. While the majority of this gap will need to be filled by private financiers, of the USD 46 billion in annual adaptation finance in 2019-2020, just USD 1 billion was tracked from private investors (approximately USD 500 million each from corporations and institutional investors). There is an urgent need to create bankable, adaptation investment opportunities in developing countries that will attract private investment and help to shift global investment trends.

Adaptation financial instruments are often cross-sectoral and span interventions that build physical climate resilience of assets (e.g., infrastructure hardening and early warning systems), improve the climate-resilience of supply chains, and interventions that support systemic climate resilience (e.g., flood mapping, disaster risk management, and many nature-based solutions). There is a critical need to develop and scale a broad array of financial solutions, including project finance, insurance, bonds, and guarantees that enable capital to flow to adaptation investments.

The Lab is seeking proposals for innovative financial instruments that, directly or indirectly, resolve market barriers and support scale-up of private finance for solutions that build climate resilience. Submissions should focus on climate-stressed regions, across developing countries, and should identify how the proposed financing approach would address specific climate risks and barriers to mobilizing finance for adaptation.

Submitted finance vehicles should offer returns for investors and have a strategy to phase out public financial support while scaling private investment. Vehicles should also demonstrate potential to build climate resilience, avoid maladaptation, support improved livelihoods, and strengthen a broader financial ecosystem that can scale adaptation finance.

Scaling up finance to sustainable buildings and construction activities is critical to reduce global emissions. Per IEA, the buildings and construction sector accounted for 39 percent of energy and process-related CO2 emissions in 2018. Aligning the built environment with sustainable pathways, particularly in emerging markets with accelerating urbanization, is essential to achieving global climate goals.

The Lab is seeking proposals for innovative financial instruments that, directly or indirectly, resolve market barriers and support scale-up of private finance for solutions that generate climate benefits in the buildings and construction sector. Submissions should focus on emerging markets with significant existing or potential infrastructure growth.

Proposed finance vehicles should support the mobilization of finance towards activities in the building and construction sector, offer returns for private investors, create jobs and other local economic benefits, thereby supporting a green, resilient recovery from the COVID-19 pandemic. Target activities of financial instruments could include reduction in carbon intensity of building materials; use of sustainable local materials; improved heating/cooling and insulation design; construction of new or retrofitted net-zero public buildings and public housing.

Brazil aims to reduce greenhouse gas emissions by 37% below 2005 levels by 2025, and by 43% by 2030. To this end, the country intends to achieve zero illegal deforestation in the Brazilian Amazon and to restore 12 million hectares of forests, while also increasing the use of renewables to 45% of the energy mix, among other measures. However, like in many emerging economies, funding to meet these targets remains a challenge.

The Lab is seeking transformative investment solutions that can drive funds for Brazil’s national climate priorities.

The Brazil program is funded by the Federal Ministry of the Environment, Nature Protection, and Nuclear Safety of Germany (BMU), through implementation support from the German Society for International Cooperation (GIZ).

The Government of India has made it a national priority to drive development and access to electricity through cleaner growth, such as renewable energy and energy efficiency, including through an ambitious target of 40% of its electricity generation capacity from non-fossil fuel sources by 2030. However, India needs more capital, and at more attractive terms, in order to build the green infrastructure required.

Increasing investment from the private sector is essential to driving the country’s infrastructure growth. Currently, high risks and other poor terms of financing may be limiting investment potential in India.

The Lab is seeking innovative solutions to finance infrastructure for renewable energy and other channels for green growth, providing concrete solutions to the unique financing challenges to investment in green infrastructure in India.

The Lab’s Southern Africa program is looking for innovative finance instruments that address issues unique to the Southern Africa Development Community (SADC) region. Due to a combination of exposure to climate change stresses and low adaptive capacity, the SADC includes some of the most vulnerable countries to climate change.

With 70% of regional water resources crossing national boundaries, water resource management is recognized by all Southern Africa states as a priority to act upon.

Increasing sustainable energy production and access is another item at the top of most SADC states’ Nationally Determined Contributions agenda. By 2027, the SADC countries have pledged to fulfill their 150GW hydropower generation potential, from 12GW in 2013.

Sustainable land use and forestry, transportation, and waste treatment are additional top priorities.

National budgets can cover only a fraction of the required investments. International public and private financing, as well as capacity-building support, are needed for these countries to reach their targets