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Mobilising (European) development finance for climate adaptation and resilience

This research paper looks at the potential of European development finance institutions (DFIs) and public development banks (PDBs) to foster development by supporting climate adaptation and resilience-building in developing countries.

Research Paper

Published on 8 September 2023


While global adaptation finance has more than doubled since 2016, from USD 10.1 billion to USD 28.6 billion in 2020, it is still inadequate to meet the costs of adaptation. European DFIs and PDBs have the potential to lead in closing the adaptation financing gap. However, they encounter challenges related to often low, unclear, and missing adaptation finance objectives,
limited synergies in the adaptation financing space, and a lack of bankable projects.

This paper recommends that European DFIs and PDBs should more actively advance blended adaptation finance approaches, develop a pipeline of bankable projects, adopt innovative financing mechanisms for climate adaptation and resilience, strive for result-oriented adaptation partnerships, and adopt a systematic approach to measuring adaptation risks to support developing countries in adapting to climate change, thereby also reducing negative cascading spill-over risks to Europe.