State and Trends of Climate Adaptation Finance in Small Island Developing States

This report analyzes adaptation finance for Small Island Developing States (SIDS), finding that current annual flows of just over USD 2 billion (0.2% of global climate finance) must increase six-fold to USD 12 billion to meet assessed needs. It highlights that 44% of this finance is debt-based, funding is highly concentrated among 10 SIDS, and there is a significant disparity between ODA-eligible and ODA-ineligible nations. The authors call for increased grants, a shift toward a multidimensional vulnerability index for eligibility, and improved tracking of both public and private finance.

• International adaptation finance for Small Island Developing States (SIDS) is severely insufficient, averaging just over USD 2 billion annually in 2021–2022, which is only 0.2% of global climate finance. To meet the needs outlined in National Adaptation Plans (NAPs) and Nationally Determined Contributions (NDCs), annual flows must increase six-fold to approximately USD 12 billion. This required amount represents 1.2% of global climate finance and 4% of global Official Development Assistance (ODA), and could potentially generate USD 48 billion in economic benefits based on a 1:4 cost-to-benefit ratio.
• A significant portion of international adaptation finance to SIDS is provided as debt, which posed a risk to macroeconomic stability for countries with unsustainable debt levels. Specifically, debt accounted for 44% of international adaptation finance to SIDS in 2021–2022.
• Adaptation finance is unevenly distributed among SIDS, with 10 nations receiving 67% of tracked finance. There is no significant correlation between these finance flows and climate vulnerability as measured by Notre Dame Global Adaptation Initiative (ND-GAIN) scores. Furthermore, a disparity exists between ODA-eligible SIDS, which received USD 1.9 billion annually in 2021–2022, and ODA-ineligible SIDS, which received only USD 181 million.
• Multilateral development finance institutions provide the majority (60%) of international public adaptation finance for SIDS, but grants through these institutions only accounted for about 35% of their total flows. There is a need to increase contributions from international governments (currently 31%) and multilateral climate funds (currently 7%).
• There is a critical lack of trackable data regarding private sector adaptation investments in SIDS. The report calls for improved tagging and tracking by SIDS governments, standardized methodologies, and transparent reporting by bilateral and donor agencies to better calculate financing needs.

APA

Climate Policy Initiative (2025). State and Trends of Climate Adaptation Finance in Small Island Developing States. https://www.climatepolicyinitiative.org/publication/state-and-trends-of-climate-adaptation-finance-in-small-island-developing-states/

Chicago

Climate Policy Initiative. State and Trends of Climate Adaptation Finance in Small Island Developing States. 2025. https://www.climatepolicyinitiative.org/publication/state-and-trends-of-climate-adaptation-finance-in-small-island-developing-states/.

Wikipedia

{{cite report |author=Climate Policy Initiative |title=State and Trends of Climate Adaptation Finance in Small Island Developing States |date=1 October 2025 |url=https://www.climatepolicyinitiative.org/publication/state-and-trends-of-climate-adaptation-finance-in-small-island-developing-states/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{climatepolicyinitiative2025state, author = {{Climate Policy Initiative}}, title = {{State and Trends of Climate Adaptation Finance in Small Island Developing States}}, institution = {Climate Policy Initiative}, year = {2025}, month = oct, url = {https://www.climatepolicyinitiative.org/publication/state-and-trends-of-climate-adaptation-finance-in-small-island-developing-states/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }