Despite the growing political commitment to climate finance for achieving the goals of the Paris Agreement, there are significant challenges in ensuring that finance reaches the most vulnerable populations. Barriers related to policy, capacity development, financial products and services, gender equality and social inclusion, risk disclosure, transparency, and traceability hinder the accessibility and appropriateness of climate finance for those in need. However, there is an increasing availability of adaptation and mitigation funding opportunities from various climate funds, including multilateral and bilateral funds, international public funds, and private equity funds.
While this surge in climate financing presents opportunities for transformative impacts, a significant portion of climate finance in Asian countries currently focuses on short-term projects. This hinders the development of structural capacity and institutional capabilities in these countries. Urgent action is required to establish robust systems and structures, along with providing comprehensive capacity development to stakeholders involved in climate finance activities. Through appropriate training and capacity development, organizations can enhance their knowledge and skills in risk assessment, financing instruments, and evidence-based project design and implementation.
To effectively support capacity building, it is crucial to systematically identify gaps in training and capacity needs, particularly in South and Southeast Asian countries. Many of these countries face common climate finance readiness problems due to a lack of assessment within line ministries and agencies. Against this backdrop, our proposed project aims to identify and assess bottlenecks, challenges, and gaps in order to support inclusive and fit-for-purpose finance for climate change adaptation in selected countries in South and Southeast Asia.
The project primarily focuses on policymakers, civil servants, and decision-makers at the national and local scales. It begins with a barrier and needs assessment among these stakeholders, including climate finance practitioners and professionals within government bureaucracies. The objective is to identify capacity gaps related to creating an enabling environment for inclusive finance flows, with specific attention to adaptation finance. By lowering the barriers to finance flows, we aim to ensure that adaptation and mitigation funds reach the intended beneficiaries when and where they are needed. This requires policy and decision-makers equipped with the necessary skills, competence, and expertise at every stage of the climate finance pipeline.
The proposal aligns with SEI’s 2020-2024 global strategy and directly addresses the priorities for change under the reduced climate risk impact area. SEI’s 2020-2024 strategy also prioritizes building the capacity of key stakeholders to scale up sustainable finance initiatives in Thailand and the region. The resulting Center for Finance for Sustainability in Bangkok acts as a regional hub connecting policymakers, the private sector, impact investors, NGOs, and stakeholders to build capacity, provide scientific research, and create a platform for enabling sustainable finance.
The Asian region has emerged as the largest recipient of climate-related development finance in recent years. However, the distribution of financial flows within and among countries remains uneven. Numerous climate finance readiness programs conducted by the Green Climate Fund (GCF) and other development partners consistently highlight the lack of internal country capacity as a major obstacle, leading to inadequate cost assessment and limited access to climate finance.
This project aims to conduct an in-depth analysis of the policy landscape in four countries: Bangladesh, Nepal, Cambodia, and Thailand. The primary goal is to identify and address the barriers preventing the enhancement of climate finance flows at both the national and sub-national levels. To achieve this, the project will undertake a comprehensive barrier and needs assessment involving policy makers, climate finance practitioners, civil servants, and decision-makers. The assessment will focus on identifying capacity gaps required to develop an enabling environment that facilitates inclusive climate finance flows, with particular emphasis on adaptation finance.
Based on the assessment findings, a tailored capacity development program will be designed, encompassing the creation of a training curriculum for professional development. The program will promote national and regional knowledge sharing and expertise exchange to foster a deeper understanding of climate finance. As part of this initiative, a foundational course for national policymakers and a specialized course for sub-national public institutions will be launched. These courses will serve as a platform to refine the developed curricula for future deliveries and to facilitate replication and scaling up. Additionally, a comprehensive training evaluation will be conducted to gather insights and lessons learned for both the training team and the project team as a whole.
Knowledge products developed under this project will include capacity needs assessment policy briefs and case studies. These outputs will inform future climate finance readiness programs in the participating countries and contribute to identifying a complementary mix of financial instruments that can support climate adaptation across different scales, magnitudes, and frequencies. Throughout all project activities, gender equality and social inclusion principles will guide decision-making, ensuring that climate finance perspectives are approached from the perspective of gender justice and social inclusion (GESI).
SEI Affiliated Researcher
Senior Research Fellow
Research Fellow and Platform Manager for Aid Atlas
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