Engaging the Private Sector in NDCs: Trends and Opportunities for Support
As countries shift from planning to implementing their third-round Nationally Determined Contributions (NDCs 3.0), private sector support is critical to achieving national climate goals at the necessary scale and speed. While many countries are already requesting targeted support from the NDC Partnership to engage private businesses, investors and financial institutions, there is opportunity to expand that engagement and the impact it has on mobilizing finance for NDC implementation.
A new insight brief from the NDC Partnership Support Unit looks at key trends in private sector engagement requests from developing countries, partner responses and opportunities to better integrate the private sector across all stages of NDC development and implementation. These insights help countries and partners identify where demand for support is growing, where gaps remain and how to target resources for the greatest impact.
Most developing countries have submitted private sector requests — often focused on both mitigation and adaptation.
To date, most developing countries requesting support of the NDC Partnership (77 out of 101) have submitted 540 private sector-focused requests — a strong signal that private sector engagement is a wide-spread priority. These span a range of activities, such as preparing investment-ready project pipelines, designing financial instruments that attract private capital, developing supportive policies and regulations and building capacity for public institutions and private actors to collaborate effectively.
Most support requests are cross-cutting — addressing both mitigation and adaptation — and most commonly focus on sectors such as energy and agriculture. Among the requests related to private sector engagement, 26% focus on project and program financing and mobilizing resources—much higher than the only 7% of all requests to the NDC Partnership that focus on these areas.
Technical assistance and capacity building lay the foundation for private sector investment.
Most (90%) private sector requests are for technical assistance and support to help create or improve the enabling conditions for investment. This often includes policy and regulatory development, market assessments, institutional strengthening and the creation of mechanisms for ongoing government–private sector dialogue. Capacity building is also a major part of ongoing support, equipping both government agencies and private stakeholders with the skills and knowledge needed to design, finance and implement NDC-aligned projects.
Support levels are strong — but gaps remain.
More than half of private sector requests have been fully supported by partners, however there are still important opportunities for partners to support. By leveraging its more than 250 members and ongoing in-country coordination, the NDC Partnership is well positioned to close this gap — particularly by sharing investment-relevant information with private actors and enabling structured dialogue between governments and investors.
Increased support for private sector engagement is vital to successful NDC implementation.
With trillions of dollars needed annually to achieve global climate goals, the private sector will be essential to the successful implementation of NDCs. Countries are already taking steps to better engage businesses, investors and financial institutions.
The NDC Partnership is scaling efforts that help countries share investment priorities with the private sector build pipelines of investable projects and strengthen matchmaking between country needs and financing options.
As countries finalize and implement their NDCs 3.0, the NDC Partnership is leveraging its country-level insights to build institutional capacity to plan, coordinate and engage effectively with private actors and investors at national and subnational levels.
Read the full “Insight Brief: Private Sector Engagement in NDCs.”