Guiding Principles for the Preparation of Financing Strategies for Climate Change Adaptation in Developing Countries

The report outlines a framework for developing countries to bridge the adaptation finance gap through seven guiding principles. These are divided into process-related principles—emphasizing country-driven approaches, the engagement of finance ministries, and inclusivity—and content-related principles, which focus on the strategic use of diverse financial instruments, alignment with national development goals, improving the enabling environment, and establishing monitoring and evaluation processes. The report supports these principles with case studies from Kenya, Nepal, and Peru, highlighting that a financing strategy is a continuous process rather than a single document.

• The adaptation finance gap in developing countries is substantial and widening; the 2022 Adaptation Gap Report estimated annual needs between USD 160 billion and 340 billion by 2030, while 2020 flows were only USD 50 billion.
• Financing strategies for adaptation should be country-driven and 'fit for purpose,' meaning they are based on a nation's specific needs and capacities, ranging from high-level awareness strategies to detailed costing frameworks.
• Engaging ministries of finance and planning is critical for a 'whole-of-government' approach, as these ministries ensure adaptation is mainstreamed into national budgeting and fiscal policy tools.
• Effective strategies must utilize a diverse mix of finance sources, including domestic public budgets, international public funds (grants and concessional loans), and private investment, rather than focusing solely on aggregate numbers.
• Alignment is essential to avoid 'policy crowding' and fragmentation; adaptation financing must be consistent with NDCs, NAPs, Sustainable Development Goals (SDGs), and national development plans.
• Countries should identify actions to improve the 'enabling environment,' such as updating building codes, land-use planning, and improving climate data availability to attract private sector investment.
• A financing strategy should be treated as a continuous process and a 'matrix of interlinked actions' rather than just a static document, incorporating monitoring, evaluation, and learning (MEL) to measure success.
• Case studies from Kenya, Nepal, and Peru demonstrate that successful implementation requires the development of 'bankable' project proposals and the capacity to quantify adaptation returns on investment.

APA

Murphy, D., & Parry, J.-E. (2023). Guiding Principles for the Preparation of Financing Strategies for Climate Change Adaptation in Developing Countries. International Institute for Sustainable Development. https://www.iisd.org/system/files/2023-09/guiding-principles-financing-strategies-climate-change-adaptation.pdf

Chicago

Murphy, Deborah, and Jo-Ellen Parry. Guiding Principles for the Preparation of Financing Strategies for Climate Change Adaptation in Developing Countries. International Institute for Sustainable Development, 2023. https://www.iisd.org/system/files/2023-09/guiding-principles-financing-strategies-climate-change-adaptation.pdf.

Wikipedia

{{cite report |last1=Murphy |first1=Deborah |last2=Parry |first2=Jo-Ellen |title=Guiding Principles for the Preparation of Financing Strategies for Climate Change Adaptation in Developing Countries |publisher=International Institute for Sustainable Development |date=August 2023 |url=https://www.iisd.org/system/files/2023-09/guiding-principles-financing-strategies-climate-change-adaptation.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{murphy2023guiding, author = {Murphy, Deborah and Parry, Jo-Ellen}, title = {{Guiding Principles for the Preparation of Financing Strategies for Climate Change Adaptation in Developing Countries}}, institution = {International Institute for Sustainable Development}, year = {2023}, month = aug, url = {https://www.iisd.org/system/files/2023-09/guiding-principles-financing-strategies-climate-change-adaptation.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }