Component 3
Identifying finance partners and setting up a detailed financing plan
Implementing the climate investment plan will require establishing strong partnerships with financiers (public and private) and project proponents. It is necessary to engage potential investors and institutional finance partners early to understand the value they can bring to the table and to best determine how they can support investment priorities and elaborate a financing plan to match needs with offers.
Steps
Step 4
Engage with potential finance partners from the public and private sectors
Assess and leverage the investment appetite of finance partners (preferences, objectives, and willingness to invest) by reviewing and interlinking their multi-year financing and investment strategies with the country’s investment priorities and finance mobilization strategies. Explore the requirements and constraints of potential financing instruments and the investment sizes they are comfortable with (i.e., ticket size). Examine their investment criteria and strategies to understand the factors and considerations that drive their investment decisions. Finally, investigate the approaches and funding cycles of these investors and finance partners, identifying the timing and frequency with which they allocate capital to align your initiatives effectively.
Example: The Organization of Eastern Caribbean States (OECS) hosted the 3rd Caribbean NDC Finance Initiative (NDCFI) Investment Forum in early 2025 to support countries in engaging the private sector in addressing their climate priorities. The Forum provided a platform for stakeholders to discuss strategies and instruments for implementing climate commitments, including thematic bonds, resilience investments, greening the financial sector, and sustainable infrastructure. Additionally, the event served as a capacity-building space for government decision-makers, enhancing their ability to develop and structure climate-related investments and projects.
Step 5
Identify preliminary investment structures that could be leveraged by financing sources and partners
Explore and utilize existing financing options and platforms such as national budgets, MDBs and DFIs, bilateral investments, private-sector initiatives, blended financing models, and other innovative market mechanisms. Conduct a comprehensive analysis to align these mechanisms with investment goals and optimize financial support: assess the national budget scope, MDBs and DFIs eligibility, bilateral agreements, and the private sector. The aim is to combine various funding sources for a more impactful and sustainable approach, tapping into a wider range of resources and expertise to enhance the efficiency and effectiveness of initiatives and maximize their impact.
Example: As part of its NDC Financing Strategy and Investment Plan, the government of Armenia structured NDC-aligned investments based on estimated financial needs and funding sources. Investments were categorized according to their scope, including upstream efforts such as improving the legal and regulatory framework for NDC financing, as well as concrete downstream investments, such as the modernization of irrigation systems, the construction of a 300 MW wind farm, and the development of a 100 MW energy storage facility.
Step 6
Prepare a detailed financing plan that identifies best-fit financial sources and barriers to be addressed
Create a comprehensive plan to align investment needs with suitable sources of finance and with capable project proponents to optimize mobilization efforts and ensure impactful resource allocation. Prioritize each investment requirement and potential finance source and identify barriers, revisiting and updating plans periodically for strategic efficiency. Conduct a thorough analysis of barriers for each investment need, taking economic, technological, socio-cultural, implementation, and policy/regulatory challenges into account. This analysis, which should incorporate desk-based research and stakeholder engagement, helps identify actions to improve the enabling environment. Recognize variations in barriers based on the type of financing sought and involve relevant sectors and ministries to address barriers from the most critical to the least critical.
Example: Georgia’s NDC Financing Strategy and Investment Plan identified and addressed barriers hindering effective climate financing, thereby facilitating the implementation of the country’s updated NDC commitments. The strategy outlines the climate finance framework, pinpoints existing obstacles, and provides guidelines for resource mobilization. It emphasizes the importance of prioritizing and mainstreaming climate-related budget programs during budget formulation. A key outcome of this plan is the identification of a need for over USD $80 million to fund unconditional mitigation actions, primarily in the energy sector, with additional investments required in transport, buildings, agriculture, and waste management sectors. The strategy also presents an implementation roadmap to ensure the sustainable execution of these climate finance initiatives.
Support resources
The following resources can be considered. Explore the NDC Partnership Knowledge Portal Climate Toolbox for additional identifying finance partners and setting up a detailed financing plan resources.