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The report examines Energy Savings Insurance (ESI), an instrument developed by the Inter-American Development Bank and BASE to unlock energy efficiency investments for SMEs by insuring against the risk that projected energy savings are not met. ESI can absorb up to 80% of underperformance risk and is being piloted or replicated across several countries, including Mexico, Colombia, and El Salvador. If scaled globally, the instrument is estimated to drive USD 10-100 billion in investment and reduce annual emissions by 27-234 MtCO2 by 2030.

The Energy Savings Insurance (ESI) instrument is designed to stimulate energy efficiency investments by small and medium enterprises (SMEs) by mitigating the risk that actual energy savings fall below projections. A pilot in Mexico's agro-industry sector targets 10 fast-track projects valued at USD 2.14 million, utilizing a package of surety insurance, credit lines from FIRA, and third-party verification by ANCE. Financial modeling indicates that the ESI package can absorb 60-80% of the impact of underperformance on debt service repayments, significantly reducing risk for both equity investors and loan providers. The report proposes scaling the initiative to 6-14 additional Latin American and Caribbean countries through a regional facility, with further replication planned for China, India, Indonesia, and Africa, aiming for a global potential of USD 10-100 billion in investments by 2030.

The Global Innovation Lab for Climate Finance conducted a Phase 2 analysis of seven climate finance instruments based on four criteria: actionability, innovativeness, catalytic potential, and transformative impact. Following this assessment, four instruments—the Agricultural Supply Chain Adaptation Facility, Climate Development & Finance Facility, Energy Savings Insurance, and Long-term Currency Swap—were selected to move into Phase 3 for detailed financial modeling and implementation planning. The report details the goals and analytical findings for all seven instruments, including those focused on renewable energy, energy efficiency, and agricultural resilience, while highlighting the need for public sector support and donor capital to mitigate risks and catalyze private investment.

The workshop focused on leveraging international funds like the Green Climate Fund (GCF) and Climate Investment Funds (CIFs) to drive low-carbon investment in Brazil. Key discussions highlighted that a lack of long-term governmental strategic vision and internal organizational cultures in banks act as barriers to green investment. The event presented innovative financial instruments and case studies from Colombia and Mexico to demonstrate how blending concessional finance with private resources and risk mitigation tools can unlock climate-relevant investments.

The document serves as an introduction to infographics created by the Climate and Development Knowledge Network (CDKN) and the Overseas Development Institute (ODI). These materials are based on the IPCC Fifth Assessment Report (AR5) and are specifically tailored for decision-makers in Small Island Developing States to illustrate how climate change adaptation can reduce risk.

The report examines the financing of Nationally Appropriate Mitigation Actions (NAMAs), emphasizing the need to move beyond reliance on international public funding toward leveraging private capital. It defines 'bankability' as the attractiveness of a project to investors based on its revenue-generating potential and provides a framework for designing such projects. Through eight case studies from countries including Morocco, Tunisia, and the Philippines, the document illustrates the roles of public-private partnerships (PPPs), the importance of implementing bodies (such as Special Purpose Vehicles), and the necessity of risk mitigation tools like partial credit guarantees and power purchase agreements. The report concludes with recommendations for NAMA developers to engage the private sector early in the design process and for international stakeholders to disseminate best practices in private funding.

The document argues that the Green Climate Fund's Private Sector Facility (PSF) must address specific risk gaps—namely policy and financing risks—to unlock large-scale private capital for climate mitigation and adaptation. It proposes two primary business models: a 'Facilitated Model' acting as a fund-of-funds through intermediaries, and a 'Full-service Model' engaging directly with private actors. The authors emphasize the need for a clear separation between governance and management, suggesting the use of independent due diligence and private sector expertise, potentially through a dedicated Investment Panel, to ensure efficient decision-making and risk management.

The document analyzes the 2012 green and climate finance activities of 15 surveyed DFIs and DBs, who committed approximately USD 18.2 billion. While these institutions play a significant role in financing green economic development, their catalytic potential is hindered by a shortage of bankable projects and the uncertain viability of prototype technologies. The report details the sectoral distribution of funds—favoring mitigation and sustainable transport—and examines the ongoing financing of fossil fuel projects. It concludes by suggesting policy improvements and enhanced transparency through standardized reporting to further scale green investments.

The World Bank Group (WBG) provides a wide array of risk mitigation tools, but few have been deployed at scale for climate projects. While total risk mitigation commitments grew to USD 4 billion in the three years preceding 2013, climate-related projects averaged only 10% of this total. The report identifies a gap between the WBG's climate goals and the actual use of its de-risking tools, recommending a formal mandate to expand these instruments, particularly guarantees and index-based products, to better mobilize private investment for low-carbon technologies.

The report examines first-loss protection mechanisms as tools to bridge the financing gap for low-carbon infrastructure by shielding institutional investors from initial losses. It analyzes two primary models: the European Commission-European Investment Bank Project Bond Initiative (EC-EIB PBI) and the proposed Sustainable Development Bond Assurance Corporation (SDBAC). The authors argue that for these instruments to be effective, they must align with investors' risk-return profiles, secure investment-grade ratings from agencies, and be priced competitively, often requiring concessional support from sponsors like development banks to remain viable.

The document examines how different financial instruments and institutions define and calculate 'leverage'—the ability of public funds to catalyze additional investment. It finds that leverage is often conflated with co-financing and varies wildly by instrument, making cross-comparison nearly impossible. The authors propose a new framework based on counterfactuals, risk mitigation, and the avoidance of double counting to improve the rigor of climate finance reporting.

The document investigates whether public finance-facilitating tools can act as a 'game-changer' for low-carbon investment in developing countries. It identifies that while these tools can address various risks and increase liquidity, they are not a substitute for ambitious climate policies and direct payment mechanisms. Key challenges include a lack of 'deal flow' in less advanced economies, the risk of crowding out private capital, and the inherent risk-aversion of public finance institutions that must maintain high credit ratings.

The document identifies a significant investment gap in Africa's energy transition, estimated at US$35 billion per annum, and outlines the structural, political, and economic barriers hindering private investment. It proposes that DFIs take a catalytic role by improving institutional environments, developing bankable project pipelines, and employing innovative financial instruments—such as blended finance, green bonds, and local currency lending—to mitigate risks and crowd in private capital.

The report identifies significant barriers to renewable energy investment in Indonesia, including high upfront capital requirements and a lack of long-term debt financing from local banks. While ten organizations provide 13 guarantee products in the Indonesian market, none specifically target the renewable energy sector. The analysis argues that a tailored credit guarantee, potentially developed by PT SMI, could address security gaps for small developers and improve the risk-return profile of projects. However, implementation faces challenges such as competition from lower-cost corporate guarantees and the 'first demand' requirements of financial institutions.

The document outlines mandatory conditions for all GCF funding proposals, including the signing of a funded activity agreement (FAA) and legal due diligence. It also specifies individual conditions for projects in Vanuatu (FP184) and Pakistan (SAP024), and recommends that disbursements occur only after the GCF secures protection against litigation and expropriation in the host countries.

The policy brief by the Global Resilience Partnership advocates for a systemic shift in how capital markets account for resilience-related risks. It argues that current policy frameworks and market incentives are inadequate, leaving assets exposed to increasing global shocks. The document proposes a new definition of resilience based on five attributes: diversity, redundancy, connectivity, inclusivity and equity, and adaptive learning. It emphasizes that investing in resilience, particularly in the Global South, is a risk mitigation strategy that can provide high economic returns, with benefit-cost ratios for climate adaptation ranging from 2:1 to 10:1.

CRiSTAL (Community-based Risk Screening Tool – Adaptation and Livelihoods) is a decision-support tool developed by IUCN, IISD, SEI, and Intercooperation to help project managers understand the links between climate, livelihoods, and project activities. The tool uses a four-step analytical framework implemented via Microsoft Excel to identify climate hazards, assess their impact on livelihood resources, and adjust project activities to enhance adaptive capacity and minimize maladaptation. Since its 2007 launch, it has been applied in over 20 countries, following initial field tests in Mali, Bangladesh, Tanzania, Nicaragua, and Sri Lanka.

The document describes CRiSTAL (Community Risk Identification and Adaptation Tool), a framework developed by IUCN, IISD, SEI, and Intercooperation to analyze the links between climate threats, local livelihoods, and project activities. The tool uses a two-module process—Climate Context and Livelihoods, followed by Adaptation Planning and Management—to help project planners avoid maladaptation and enhance community resilience. It relies on a combination of scientific climate data and community consultations, with data managed via Microsoft Excel. Since its 2007 launch, it has been applied in over 20 countries, following initial field tests in Mali, Bangladesh, Tanzania, Nicaragua, and Sri Lanka.

CRiSTAL (Community Risk Identification and Adaptation Tool) is a decision-support framework developed by IUCN, IISD, SEI, and Intercooperation to assist project managers in designing activities that enhance community resilience. The tool uses a logical sequence of four analytical steps, divided into two modules, to assess how climate hazards affect livelihood resources and how project activities can be adjusted to improve adaptation capacity. It relies on a combination of secondary scientific climate data and stakeholder consultations, with data managed via Microsoft Excel. Since its 2007 launch, the tool has been applied in over 20 countries, following initial field trials in Mali, Bangladesh, Tanzania, Nicaragua, and Sri Lanka.

The study examines a dataset of 162 cases to understand how various financial instruments—including blended finance, bonds, and grants—are used for climate risk reduction and management. It finds that while most instruments are pooled through programs or funds, there is a growing trend toward instruments targeting multiple countries. The analysis reveals a preference for risk reduction over risk management and notes that blended finance is the most frequent instrument used, except in high-income countries where grants are more prevalent.