Climate Adaptation Investment Planning: Lessons Learned

The report details the Climate Adaptation Investment Planning (CAIP) framework, a five-step process designed by the Asian Development Bank (ADB) to bridge the gap between national adaptation planning and financial implementation. Piloted between 2022 and 2025 in Armenia, Bhutan, Cambodia, Indonesia, Mongolia, and Nepal, the framework emphasizes aligning adaptation with national fiscal cycles, using systemic climate risk diagnostics, and grouping priorities into comprehensive investment packages. Key findings indicate that while most adaptation packages yield high economic returns, financial viability for private investment remains limited and sector-dependent. The report advocates for a country-led, iterative approach that integrates ministries of finance from the outset to ensure adaptation is embedded in public financial management systems.

• Adaptation investment planning must be integrated into a country's existing fiscal and development planning frameworks to be pragmatic and effective. For example, in Mongolia, the process had to align with the public investment programming cycle to ensure priorities were linked to budget frameworks.
• A focused and iterative approach is necessary because attempting to prepare every priority in a National Adaptation Plan (NAP) for investment is impractical. Countries should select a manageable unit of focus, such as a specific sector, theme, or subnational region.
• Standard climate risk assessments in NAP documents often lack the granularity needed for investment. Tailored diagnostics—including multi-hazard analysis and cross-sector risk linkages—are required to justify specific investments. In Cambodia, this process identified heat risks to labor productivity that were previously omitted from the agriculture sector NAP.
• Grouping individual adaptation activities into comprehensive, system-level investment packages is more effective than a project-based approach. These packages should address multiple climate risks, build resilience across entire value chains or sectors, and include various investment types to attract different financial instruments.
• While many adaptation investment packages show high economic internal rates of return (EIRR)—often exceeding the 9% threshold used by the ADB—their financial internal rates of return (FIRR) are typically lower, meaning many will require public finance.
• Private investment potential is highly dependent on the sector and package. Early opportunities exist in agricultural value chains in Armenia, Cambodia, Indonesia, and Nepal, while longer-term prospects include climate services and water sector partnerships.
• Decision trees are effective heuristics for matching adaptation priorities with appropriate financing sources and instruments, helping countries determine if a project is financially viable or requires blended finance and policy reform.
• Deepening engagement with ministries of finance is critical to ensure adaptation is not treated as a stand-alone exercise but is integrated into national budgets and economic strategies. In Cambodia, the Ministry of Economy and Finance acted as a co-implementer from the start.
• Country-led institutional arrangements, such as inter-agency working groups, are essential for coherence across different governance levels and sectors. In Bhutan, a new cross-government working group was established to coordinate water management across agriculture, energy, and infrastructure ministries.
• The CAIP process requires significant human and financial resources, including interdisciplinary expertise in climate risk analytics, adaptation economics, and climate finance, over an extended timeframe.

APA

NAP Global Network (2026). Climate Adaptation Investment Planning: Lessons Learned. https://napglobalnetwork.org/wp-content/uploads/2026/05/climate-adaptation-investment-planning.pdf

Chicago

NAP Global Network. Climate Adaptation Investment Planning: Lessons Learned. 2026. https://napglobalnetwork.org/wp-content/uploads/2026/05/climate-adaptation-investment-planning.pdf.

Wikipedia

{{cite report |author=NAP Global Network |title=Climate Adaptation Investment Planning: Lessons Learned |date=April 2026 |url=https://napglobalnetwork.org/wp-content/uploads/2026/05/climate-adaptation-investment-planning.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{napglobalnetwork2026climate, author = {{NAP Global Network}}, title = {{Climate Adaptation Investment Planning: Lessons Learned}}, institution = {NAP Global Network}, year = {2026}, month = apr, url = {https://napglobalnetwork.org/wp-content/uploads/2026/05/climate-adaptation-investment-planning.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }