Bridging the Adaptation Finance Gap in Asia

This policy brief by the Climate Policy Initiative examines the significant gap between the required and actual adaptation finance in Asia. It identifies systemic barriers—including institutional capacity constraints, a reliance on loan-based funding, and a lack of local community integration—and proposes a 'whole-of-government' approach to scale and improve the quality of climate resilience investments.

• Asia faces a massive adaptation finance deficit, with an estimated annual investment need of USD 431 billion compared to tracked flows of approximately USD 34 billion in 2021-2022. Across the Asia-Pacific, 84% of annual financial needs remain unmet, with the most significant shortfall occurring in Central and West Asia at 93%.
• The quality of adaptation finance in Asia is problematic due to a heavy reliance on loans, which are often ill-suited for projects that provide public goods without clear revenue streams. In 2023, approximately 85% of adaptation finance flows to Asia were loans. This creates a debt burden for Least Developed Countries (LDCs) and Small Island Developing States (SIDS), who in 2022 paid twice as much in debt servicing as they received in adaptation finance.
• Significant barriers hinder the disbursement and access of climate funds. In South Asia, the disbursement rate for allocated adaptation finance was only 51% between 2017 and 2021. Access to funds like the Green Climate Fund (GCF) is limited by complex application procedures and the requirement to demonstrate a "paradigm shift," which often favors large, sophisticated entities over community-level initiatives.
• Adaptation finance in Asia frequently fails to integrate local and indigenous knowledge, resulting in top-down project designs. Only 17% of international public adaptation finance from 2017–2021 was directed toward projects with a specific local focus, and multilateral funds like the GCF and Global Environment Facility provide only 9% of total public adaptation finance.
• The document recommends a 'whole-of-government' strategy to address systemic obstacles. Examples include the Bangladesh Climate Development Partnership (BCDP), which coordinates planning to operationalize the National Adaptation Plan (2023–2050), and Nepal's Green Resilient and Inclusive Development (GRID), which has a USD 4.2 billion pledge to align investments with resilience goals.
• To bridge the gap between national strategies and bankable projects, the brief suggests strengthening Adaptation Investment Plans (AIPs). These plans translate strategic priorities from Nationally Determined Contributions (NDCs) and National Adaptation Plans (NAPs) into concrete, costed, and investment-ready activities matched with diverse finance sources.

APA

Climate Policy Initiative (n.d.). Bridging the Adaptation Finance Gap in Asia. https://www.climatepolicyinitiative.org/wp-content/uploads/2025/09/Policy-Brief_Bridging-The-Gaps-in-Adaptation-Finance-in-Asia.pdf

Chicago

Climate Policy Initiative. Bridging the Adaptation Finance Gap in Asia. n.d. https://www.climatepolicyinitiative.org/wp-content/uploads/2025/09/Policy-Brief_Bridging-The-Gaps-in-Adaptation-Finance-in-Asia.pdf.

Wikipedia

{{cite report |author=Climate Policy Initiative |title=Bridging the Adaptation Finance Gap in Asia |url=https://www.climatepolicyinitiative.org/wp-content/uploads/2025/09/Policy-Brief_Bridging-The-Gaps-in-Adaptation-Finance-in-Asia.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{climatepolicyinitiativendbridging, author = {{Climate Policy Initiative}}, title = {{Bridging the Adaptation Finance Gap in Asia}}, institution = {Climate Policy Initiative}, url = {https://www.climatepolicyinitiative.org/wp-content/uploads/2025/09/Policy-Brief_Bridging-The-Gaps-in-Adaptation-Finance-in-Asia.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }