Climate Adaptation Notes

The Climate Adaptation Notes (CAN) is a proposed funding mechanism designed to increase private, commercial bank, and institutional investment in water and wastewater infrastructure projects across sub-Saharan Africa by combining short-term construction financing with long-term asset-based funding.

• Climate Adaptation Notes (CAN) is a structured funding mechanism that blends short-term project financing for construction from commercial banks with long-term asset-based infrastructure funding from institutional investors to support water and wastewater sector projects.
• The instrument is currently in the pre-piloting and fundraising stages and has not yet been implemented. Current progress includes the identification of strategic partners, the establishment of a licensed independent fund manager, and endorsement from the Global Innovation Lab for Climate Finance.
• The success of the instrument faces two primary challenges: project pipeline risk, where long development cycles may limit the number of financeable projects, and the complexity of monitoring and measuring climate adaptation criteria, which may burden lenders and borrowers.
• The mechanism relies on a specific ecosystem of actors: project developers (public, private, or PPP) provide the projects; commercial banks handle origination and due diligence; institutional investors provide refinancing once projects reach commercial operations; and Development Finance Institutions (DFIs) provide 'first loss' subordinate debt to mitigate risk for long-term investors.
• The instrument is most effective in regions with stable local currencies and deep debt capital markets (DCM). Southern Africa is identified as a primary pilot region because 90% of African pension fund assets are concentrated in South Africa, Botswana, Namibia, and Nigeria, with the Southern African Customs Union (Botswana, Eswatini, Lesotho, Namibia, and South Africa) being particularly well-suited.

APA

Climate Policy Initiative (2021). Climate Adaptation Notes. https://www.climatepolicyinitiative.org/gca-africa-adaptation-finance/case_studies/climate-adaptation-notes-2/

Chicago

Climate Policy Initiative. Climate Adaptation Notes. 2021. https://www.climatepolicyinitiative.org/gca-africa-adaptation-finance/case_studies/climate-adaptation-notes-2/.

Wikipedia

{{cite report |author=Climate Policy Initiative |title=Climate Adaptation Notes |date=16 September 2021 |url=https://www.climatepolicyinitiative.org/gca-africa-adaptation-finance/case_studies/climate-adaptation-notes-2/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{climatepolicyinitiative2021climate, author = {{Climate Policy Initiative}}, title = {{Climate Adaptation Notes}}, institution = {Climate Policy Initiative}, year = {2021}, month = sep, url = {https://www.climatepolicyinitiative.org/gca-africa-adaptation-finance/case_studies/climate-adaptation-notes-2/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }