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SEI report

Policy barriers to climate finance flows in Asia: the case of Bangladesh, Cambodia, Nepal and Thailand

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SEI report

Policy barriers to climate finance flows in Asia: the case of Bangladesh, Cambodia, Nepal and Thailand

This report explores the barriers that hinder finance flows for climate adaptation in four Asian countries: Bangladesh, Cambodia, Nepal and Thailand. The authors show how policy and regulatory constraints, often worsened by insufficient capacity and governance shortcomings, weaken the efforts to mobilize and allocate climate finance, particularly in key sectors like energy, water, agriculture, and disaster risk management.

Stefan Bößner, Anastasia Maga, Corrado Topi, Anmol Bullar, Ava Tahet, William Vedage / Published on 24 April 2026

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Citation

Bößner, S., Maga, A., Topi, C., Bullar, A., Tahet, A., & Vedage, W. (2026). Policy barriers to climate finance flows in Asia: the cases of Bangladesh, Cambodia, Nepal and Thailand. SEI report. Stockholm Environment Institute. https://doi.org/10.51414/sei2026.012

Key messages

  • Capacity and expertise gaps, especially in project preparation, risk assessment and accessing international funds, are widespread across all four countries in the policy but also the wider banking environment.

  • Governance fragmentation (which we use in the sense of unclear decision-making and/or policymaking power among a multitude of actors, often uncoordinated), unclear mandates, and misaligned vertical coordination hinder policy execution and climate action planning.

  • Regulatory uncertainty and complex procedures discourage private sector participation and restrict investment flows, especially in Thailand and Cambodia.

  • Monitoring, evaluation and data systems are often weak or non-existent, limiting transparency, accountability and investor confidence.

  • Despite these issues, each country shows local innovation and policy potential, evidenced by multiple success stories.

Climate change presents an urgent and growing hazard to the economic and social
wellbeing of countries throughout Asia and the Pacific. To address this issue,
substantial investments in climate adaptation action are crucial, yet the currently existing climate finance flows, especially from the private sector, remain insufficient.

Unlocking these resources requires more than new financial mechanisms; it calls for targeted, data-informed policy action and regulatory reforms, strengthened institutional capacity, and strategic coordination across all sectors and levels of government.

The findings of this report come from a mixed-method research approach including
a literature review, expert surveys, several interviews and in-country focus group discussions. This mixed-methods strategy allowed us to gain a comprehensive view of the climate finance landscape in each country.

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SEI report / PDF / 3 MB

SEI authors

Anastasia Maga
Anastasia Maga

Research Fellow

SEI Asia

Corrado Topi

Senior Research Fellow

SEI Asia