Understanding ‘bankability’ and unlocking climate finance for climate compatible development

The document explores the multifaceted meaning of 'bankability' in climate finance, arguing that it extends beyond traditional financial returns to include socioeconomic and environmental impacts. It provides lessons from CDKN's work in Africa, Asia, and Latin America, highlighting how bankability requirements differ between public and private funders and between mitigation and adaptation projects. The paper concludes with a guiding checklist for project developers to improve the success rate of proposals submitted to multilateral funds like the Green Climate Fund (GCF).

• In the context of climate change, 'bankability' is broader than the traditional financial definition of profitability and return on investment; it encompasses socioeconomic metrics, such as community resilience and alignment with national priorities.
• Bankability is perceived differently across stakeholders: international climate funds like the GCF and Adaptation Fund prioritize scalability, long-term transformation, and national ownership, while private sector actors focus on profitability, risk-return ratios, and financial returns.
• The determinants of bankability differ by project type: mitigation projects are typically revenue-generating and aligned with financial indicators, whereas adaptation projects rely more on non-financial indicators of eligibility, such as social impact and risk reduction.
• A significant barrier to accessing climate finance is the lack of national capacity to conduct the rigorous financial and economic analyses, feasibility studies, and data collection required to demonstrate bankability to international funds.
• To increase bankability, projects may require a blended finance model combining grants and loans to ensure long-term financial viability, particularly when targeting a mix of public and private funding.
• The Green Climate Fund (GCF) specifically values a 'programmatic approach' and the potential for a 'paradigm shift,' which involves creating outcomes that extend beyond a single project through innovation, scalability, and the creation of enabling regulatory frameworks.

APA

Ellis, C., & Pillay, K. (2017). Understanding ‘bankability’ and unlocking climate finance for climate compatible development. Climate and Development Knowledge Network. https://cdkn.org/sites/default/files/files/CDKN_unlocking-climate-finance.pdf

Chicago

Ellis, Charlotte, and Kamleshan Pillay. Understanding ‘bankability’ and unlocking climate finance for climate compatible development. Climate and Development Knowledge Network, 2017. https://cdkn.org/sites/default/files/files/CDKN_unlocking-climate-finance.pdf.

Wikipedia

{{cite report |last1=Ellis |first1=Charlotte |last2=Pillay |first2=Kamleshan |title=Understanding ‘bankability’ and unlocking climate finance for climate compatible development |publisher=Climate and Development Knowledge Network |date=June 2017 |url=https://cdkn.org/sites/default/files/files/CDKN_unlocking-climate-finance.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{ellis2017understanding, author = {Ellis, Charlotte and Pillay, Kamleshan}, title = {{Understanding ‘bankability’ and unlocking climate finance for climate compatible development}}, institution = {Climate and Development Knowledge Network}, year = {2017}, month = jun, url = {https://cdkn.org/sites/default/files/files/CDKN_unlocking-climate-finance.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }