Policy barriers to climate finance flows in Asia

The report identifies systemic barriers to climate finance in four Asian countries, highlighting widespread capacity gaps in project preparation and risk assessment, fragmented governance, and regulatory uncertainty. It emphasizes that while national strategies often exist on paper, implementation is hindered by a lack of coordination between ministries and a failure to integrate climate priorities into local government mandates. The study specifically notes the exclusion of vulnerable communities and SMEs from finance flows due to a lack of tailored instruments and information. To unlock resources, the authors recommend building climate literacy, clarifying institutional responsibilities, and deploying blended finance tools to de-risk private investment.

• Capacity and expertise gaps are widespread across all four studied countries, affecting policymakers, financial institutions, and small businesses, particularly in areas of project preparation, risk assessment, and accessing international funds.
• Governance is characterized by fragmentation, unclear mandates, and misaligned vertical coordination, which obstructs the execution of climate policies and action planning.
• Regulatory uncertainty and complex bureaucratic procedures discourage private sector participation and restrict investment flows, with these issues being especially prominent in Thailand and Cambodia.
• Monitoring, evaluation, and data systems are frequently weak or non-existent, which limits transparency, accountability, and the confidence of investors.
• In Bangladesh, decision-making is heavily centralized, which often excludes local governments and communities from key decisions and results in policies that do not align with local priorities.
• Cambodia faces significant barriers in accessing international funds due to limited capacity to use quantifiable metrics for evaluating climate impacts and risk management systems.
• Nepal's climate finance landscape is heavily constrained by the limited capacity of micro, small, and medium enterprises (MSMEs), which constitute 97% of the country's private companies, to access financial resources.
• Thailand's climate action is hindered by a lack of political will and the influence of powerful vested interests in the political and private sectors who benefit from the existing fossil-fuel-based system.
• Vulnerable communities, including women and Indigenous groups, are systematically excluded from climate finance due to language barriers, lack of documentation, and limited representation in decision-making.

APA

Bößner, S., Maga, A., Topi, C., Bullar, A., Tahet, A., & Vedage, W. (2026). Policy barriers to climate finance flows in Asia. Stockholm Environment Institute. https://www.sei.org/wp-content/uploads/2026/04/climate-finance-asia-case-studies-sei2026.012.pdf

Chicago

Bößner, Stefan, Anastasia Maga, Corrado Topi, Anmol Bullar, Ava Tahet, and William Vedage. Policy barriers to climate finance flows in Asia. Stockholm Environment Institute, 2026. https://www.sei.org/wp-content/uploads/2026/04/climate-finance-asia-case-studies-sei2026.012.pdf.

Wikipedia

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BibTeX

@techreport{bner2026policy, author = {Bößner, Stefan and Maga, Anastasia and Topi, Corrado and Bullar, Anmol and Tahet, Ava and Vedage, William}, title = {{Policy barriers to climate finance flows in Asia}}, institution = {Stockholm Environment Institute}, year = {2026}, month = apr, url = {https://www.sei.org/wp-content/uploads/2026/04/climate-finance-asia-case-studies-sei2026.012.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }