Financing Nationally Appropriate Mitigation Actions: Insights from CDKN’s experience

This working paper by the Climate and Development Knowledge Network (CDKN) examines the challenges and opportunities in financing Nationally Appropriate Mitigation Actions (NAMAs) in developing countries. It identifies a significant gap between the demand for NAMA financing and the available supply of dedicated funds, while highlighting barriers such as narrow donor focus, lack of financial planning expertise, and misalignment with multilateral development banks. The paper suggests that integrating NAMA pipelines with the Green Climate Fund (GCF) is a critical path forward for scaling up mitigation finance.

• There is a substantial mismatch between the demand for NAMA financing and the available supply of dedicated funds. As of November 2014, the total support sought for NAMAs was US$6.5 billion, while dedicated funding from international donors, including the NAMA Facility, amounted to approximately US$250 million.
• NAMAs often suffer from a narrow funding focus because they are frequently tailored to meet the specific requirements of the NAMA Facility. This limits their ability to serve as a general investment prospectus that could attract a more diverse range of climate finance and development aid.
• A lack of financial expertise during the design phase of NAMAs often leads to weak financial frameworks and business models. The NAMA Facility has noted that proposals frequently fail to adequately define the financial mechanisms necessary to demonstrate implementation readiness and transformational potential.
• NAMAs struggle to secure funding from multilateral development banks (MDBs) due to a misalignment with MDB priorities and procedures. In Kenya, for example, MDBs active in the geothermal sector were found to have funding structures that were not wholly compatible with the NAMA seeking support, despite an interest in the project.
• Securing domestic political backing and inter-ministerial coordination is a major challenge for NAMA success. Because mitigation is often not a priority outside of environment ministries, projects must be framed in terms of direct benefits to target sectors—such as energy diversification in Indonesia—to gain the necessary support from finance and line ministries.
• The Green Climate Fund (GCF) represents a significant opportunity for NAMA financing due to its large capitalisation (US$10.2 billion as of June 2016) and compatible 'paradigm shift' criteria. However, integration is hindered by the fact that NAMAs and the GCF are often managed by different national focal points, such as the Treasury in Kenya or the Ministry of Finance in Indonesia.

APA

Khan, D. (2016). Financing Nationally Appropriate Mitigation Actions: Insights from CDKN’s experience. Climate and Development Knowledge Network. http://cdkn.org/wp-content/uploads/2016/06/CDKN_NAMA_WP_web-1.pdf

Chicago

Khan, Dina. Financing Nationally Appropriate Mitigation Actions: Insights from CDKN’s experience. Climate and Development Knowledge Network, 2016. http://cdkn.org/wp-content/uploads/2016/06/CDKN_NAMA_WP_web-1.pdf.

Wikipedia

{{cite report |last1=Khan |first1=Dina |title=Financing Nationally Appropriate Mitigation Actions: Insights from CDKN’s experience |publisher=Climate and Development Knowledge Network |date=June 2016 |url=http://cdkn.org/wp-content/uploads/2016/06/CDKN_NAMA_WP_web-1.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{khan2016financing, author = {Khan, Dina}, title = {{Financing Nationally Appropriate Mitigation Actions: Insights from CDKN’s experience}}, institution = {Climate and Development Knowledge Network}, year = {2016}, month = jun, url = {http://cdkn.org/wp-content/uploads/2016/06/CDKN_NAMA_WP_web-1.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }