The approach enables participating countries to use public sector funds to alter the return profile of individual investments, rather than to meet the full cost of mitigation activities. Countries’ are strengthened to apply public finance strategically to ensure private finance is not crowded out from sectors where it might otherwise operate successfully. Instead, the launching of public-private sector framework partnerships for low-emission development is fostered. Also, capacity is strengthened to use public finance to leverage much larger private sector resources. This is particularly important given that the estimated financing need for addressing climate change will be significantly higher in developing countries than the scale of public funds envisaged. In parallel, supportive regulatory and policy frameworks are strengthened to address investment and regulatory barriers. Policy makers will have evaluated opportunities for unlocking domestic private capital, building upon the current trend that the vast majority of private sector climate funds (approximately 90%) are mobilized in the same country in which they are spent (CPI 2014).
Guidance and Frameworks
Developer or Source
United Nations Development Programme (UNDP)