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The report argues that while land use generates about a quarter of global greenhouse gas emissions and is highly vulnerable to climate change, current investments are predominantly 'business-as-usual'. It introduces three tools—a land-use finance landscape, a financial viability gap analysis, and a public finance mapping tool—to help governments identify funding gaps, assess the financial viability of green projects, and ensure policy coherence to unlock private and public investment in sustainable land management.

The report addresses the challenge of redirecting hundreds of billions of dollars spent annually on high-emission 'business-as-usual' (BAU) land-use activities toward sustainable 'green' alternatives. It argues that limited understanding of current financial flows inhibits effective public intervention. To solve this, the authors propose three tools: Land Use Finance Mapping to visualize current spending and identify gaps; Financial Viability Gap Analysis to determine why sustainable activities are not financially attractive and how public incentives can bridge that gap; and Public Incentive Mapping to ensure coherence across government policies and align them with sustainable production goals.

The report addresses the challenge of transitioning to low-carbon, productive land use by identifying gaps in the understanding of current financial flows. It argues that while hundreds of billions are invested in agriculture and forestry, most support non-sustainable practices. To remedy this, the authors introduce three tools: a financial flow mapping tool to visualize investments and actors, a financial viability analysis tool to identify and bridge the gap between 'green' and business-as-usual costs, and a public incentive mapping tool to ensure policy coherence and maximize private investment.

The Bujagali Hydropower Project in Uganda serves as a case study for the use of combined risk mitigation instruments—specifically the International Development Association's (IDA) partial risk guarantee (PRG) and the Multilateral Investment Guarantee Agency's (MIGA) political risk insurance (PRI)—to attract private capital in high-risk environments. The project mobilized nearly $300 million in commercial loans and private equity, achieving a ratio of almost one U.S. dollar of private capital for every two U.S. dollars of public financing. These instruments enabled commercial banks to offer loans with maturities of 16 years and lower interest rates, which reduced the required initial electricity tariff by between 7% and 60%. The resulting levelized cost of energy (LCOE) was approximately 107 USD/MWh, significantly lower than the cost of the emergency thermal power it replaced. While effective, such complex structures have been underutilized due to high transaction costs and restrictive DFI policies, though recent World Bank Group modernizations aim to expand these tools to smaller-scale renewable energy projects like solar and wind.

The report argues that while land use generates approximately a quarter of global greenhouse gas emissions and is highly vulnerable to climate change, current financial flows are predominantly 'business-as-usual' (BAU). To address this, the authors introduce three tools: the Landscape of Land Use Finance, the Financial Viability Gap Analysis tool, and the Public Finance Mapping tool. These tools are designed to help low and middle-income countries identify financial blockages, assess the viability of green projects, and ensure policy coherence to scale up private sector investment in climate-resilient agriculture and forestry.

The Sarulla Geothermal Power Plant case study demonstrates how public risk mitigation, including guarantees and feed-in tariffs, can attract private investment for geothermal energy in Indonesia. The project benefited from access to proven resources, which reduced exploration risk and allowed the developer to pay USD 70 million for completed exploration. While the project is expected to increase Indonesia's geothermal capacity by 20% and save 1.3 mt of CO2 annually by 2018, its levelized cost of electricity (USD 7.8-8.2 ¢/kWh) remains 40-60% higher than coal in Indonesia when excluding emission and health costs. The study suggests that public finance should prioritize exploration and field development, as commercial lenders are more willing to fund construction once resource risks are mitigated.

This working paper analyzes the experiences of seven Development Finance Institutions (DFIs) between 2011 and 2014 to identify strategies for driving private sector investment in climate resilience, specifically within agriculture, water-intensive industries, and infrastructure.

The Olkaria III project, a 110 MW binary geothermal plant, is the first privately funded geothermal project in Africa. It succeeded by utilizing a phased expansion strategy and a mix of public and private financing. Key enablers included the Kenyan government's provision of exploratory data and wells, a 20-year power purchase agreement (PPA) with USD-pegged tariffs, and long-term, low-cost debt from Development Finance Institutions (DFIs). The project achieved a levelized cost of electricity (LCOE) 13% lower than the average for similar Kenyan projects, demonstrating that public-private models can be more cost-effective than purely public ones.

The paper argues that while supply chain traceability is a necessary first step, it is insufficient for achieving large-scale sustainability. Instead, it advocates for a 'landscape management approach'—managing agricultural production and ecosystem protection across connected areas of land rather than on a plantation-by-plantation basis. This strategy involves five key steps: defining landscape boundaries, partnering with government and business, allocating land to its highest value use, increasing productivity, and monitoring results. The document highlights a pilot project in Sei Mangkei, North Sumatra, and identifies significant opportunities to utilize degraded lands in North Sumatra and Central Kalimantan to reduce deforestation pressure.

The document examines the challenges and opportunities for geothermal energy in Indonesia, highlighting the Sarulla Geothermal Power Plant as a model for private sector involvement. It argues that while Indonesia has the world's largest geothermal potential (29GW), utilization remains below 5% due to regulatory hurdles, funding gaps, and high exploration risks. The Sarulla project, with a planned 330MW capacity, demonstrates how proven resources, public guarantees, and long-term feed-in tariffs can attract private investment and lower costs. The report concludes that public finance should be strategically focused on the high-risk exploration and field development phases to meet Indonesia's 2025 target of 7.6GW installed capacity.

The report argues that high currency hedging costs in India make foreign debt nearly as expensive as domestic debt, hindering renewable energy targets. It proposes a government-sponsored FX hedging facility that could reduce hedging costs by nearly 50% and government support costs by up to 54%. The analysis suggests that while the expected cost of such a facility is 3.5 percentage points per year, the government would need a capital buffer of approximately INR 14.26 million/MW over 10 years to maintain a BBB- sovereign rating.

The report assesses the global climate finance landscape, highlighting the critical role of public finance in catalyzing private investment. It examines various financial tools—including green bonds, carbon pricing, and risk mitigation instruments—and analyzes the performance of multilateral development banks and bilateral agencies. The document emphasizes that while global flows have increased, significant gaps remain in tracking private finance and achieving the USD 100 billion goal due to low carbon prices and a lack of stable enabling environments in developing nations.

The paper identifies policy, knowledge, and funding gaps as primary barriers to private investment in climate resilience. It finds that DFIs use a mix of technical assistance, long-term debt, and concessional finance to stimulate demand and reduce risk. Key findings vary by region: in developed countries, regulatory compliance and ageing infrastructure drive investment; in upper-middle-income countries, technical audits and market studies are critical; and in developing countries, intermediated financing through local banks and agricultural supply chains is essential to reach SMEs.

The paper argues that high currency hedging costs in India negate the benefits of cheaper foreign loans, increasing renewable energy costs by 30% compared to the US. Using a stochastic model, the authors find that a government-sponsored FXHF could provide a 10-year currency hedge at an expected cost of 3.5 percentage points, which is 50% lower than market rates. Such a facility could reduce the delivered cost of renewable energy by up to 19% and government support costs by up to 54%, provided the government manages extreme currency risks. To achieve a credit rating equivalent to India's sovereign rating of BBB-, the paper estimates a cumulative capital buffer of approximately 30% of the underlying loan would be required.

The Sarulla Geothermal Power Plant (GPP) in Indonesia serves as a model for mobilizing private finance in the geothermal sector. By utilizing a combination of public guarantees, a long-term feed-in tariff, and concessional loans, the project attracted significant private debt and equity despite the high risks associated with field development. The study highlights that access to proven resources significantly reduced developer risk, while the government's Business Viability Guarantee Letter (BVGL) addressed bankability concerns regarding the state-owned offtaker, PLN. While the project's levelized cost of electricity (LCOE) is competitive with other geothermal projects, it remains more expensive than coal in Indonesia. The report concludes that to meet Indonesia's 7.6GW target by 2025, the government may need to take a larger role in early-stage exploration to further reduce risks for private investors.

The Climate Policy Initiative outlines a framework for mapping climate finance flows to establish investment baselines, reveal interactions between public and private finance, and identify opportunities for policy improvement. The guide emphasizes tracking project-level primary financing and total investments over additional costs, while cautioning against double-counting by excluding revenue supports like feed-in tariffs and private R&D. The author notes that data gaps, particularly in the land use sector, remain a challenge, leading to a collaboration with the European Forestry Institute and Climate Focus to develop specific mapping tools for that sector.

This executive summary examines the effectiveness of auctions versus feed-in tariffs as project allocation mechanisms for achieving India's 2022 renewable energy targets, concluding that while auctions are generally cost-effective, they have not yet resulted in adequate deployment.

The report finds that while renewable energy auctions are generally cost-effective and fair in project allocation, they often suffer from low deployment due to poor risk management. By analyzing 20 global auctions, the study identifies that project risks (such as transmission and land acquisition) have a greater negative impact on deployment than auction-specific risks. The authors recommend a 'controlled environment' for introducing wind energy auctions in India, including pre-identified sites and resource assessments, alongside the use of strong penalties for non-commissioning and payment guarantee mechanisms to ensure financial viability.

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.

This executive summary by the Climate Policy Initiative analyzes the costs associated with India's goals to install 60 GW of wind and 100 GW of solar power capacity by 2022. It compares the levelized cost of electricity (LCOE) of these renewables against imported coal, evaluates the cost of current support mechanisms like accelerated depreciation, and proposes alternative financing models to reduce government expenditure.