Addressing the barriers to climate investment
This guide comments on the discussions so far about financial instruments for the Business Model Framework of the Green Climate Fund (GCF). It summarises the barriers to financing mitigation and adaptation activities, as well as discussing factors to consider when selecting and implementing financial instruments. The key financial instruments and modalities considered in this guide are discussed in relation to the Green Climate Fund, but the authors state that the lessons are applicable to other channels for climate finance. They conclude that when seeking to understand the barriers related to mitigation and adaptation at the project level is important to identify those projects where investment subsidies will be most efficient. The purpose of the financial instrument needs to be clearly determined. The choice of financial instrument must be reflected in the governance and operations of the GCF and its partners (including national climate finance institutions). Furthermore, national climate finance institutions need a certain level of expertise to make optimal use of the support.