Grants

The document outlines how grants function as direct fund transfers to support climate projects with low commercial potential, acting as a tool to de-risk investments and build institutional capacity. It categorizes grants into development, technical assistance, and project preparation facilities, and identifies key providers ranging from philanthropic foundations and multilateral development banks to vertical climate funds like the Green Climate Fund. The guide details the capacity requirements for recipients, the pathways for financial market readiness across shallow, emerging, and mature markets, and the specific challenges—such as complex reporting and donor fragmentation—that hinder effective uptake.

• Grants in the climate finance context are primarily applied as development grants for non-commercial outcomes, technical assistance (TA) grants to build institutional capacity, and project preparation facilities (PPFs) to make projects investment-ready for private or concessional finance.
• Grants address three primary risk categories: credit risks by improving sovereign profiles without increasing debt; liquidity risks by providing fiscal space for urgent adaptation and recovery; and market risks by absorbing upfront costs and volatility to crowd in private capital.
• The Green Climate Fund (GCF) is identified as the world's largest climate fund, with approximately 42% of its portfolio consisting of grants for readiness, project preparation, and adaptation.
• The document proposes different implementation pathways based on market maturity: shallow markets should initially channel grants via UN/INGOs before transitioning to national partners; emerging markets focus on PPPs and regional coordination; and mature markets use grants specifically for innovation pilots and frontier technologies.
• Key barriers to grant uptake include technical challenges like complex donor reporting and weak national monitoring and evaluation (M&E) capacity, as well as political economy issues such as elite capture and donor-local misalignment.

APA

Climate Policy Initiative (n.d.). Grants. https://www.climatepolicyinitiative.org/wp-content/uploads/2026/01/Grants.pdf

Chicago

Climate Policy Initiative. Grants. n.d. https://www.climatepolicyinitiative.org/wp-content/uploads/2026/01/Grants.pdf.

Wikipedia

{{cite report |author=Climate Policy Initiative |title=Grants |url=https://www.climatepolicyinitiative.org/wp-content/uploads/2026/01/Grants.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{climatepolicyinitiativendgrants, author = {{Climate Policy Initiative}}, title = {{Grants}}, institution = {Climate Policy Initiative}, url = {https://www.climatepolicyinitiative.org/wp-content/uploads/2026/01/Grants.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }