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Report

Localizing climate finance: mapping gaps and opportunities, designing solutions (1st edition)

Acknowledging the common need to identify, articulate, strengthen and scale up CCFLA members’ initiatives related to subnational and local climate finance, the Secretariat and Climate-KIC undertook a survey of Alliance member activities and initiatives to produce the 2016 CCFLA Scoping Report. The intended outcome of this work is to reinforce convergence of effort and cooperation between CCFLA members and other key climate finance stakeholders. It provides a qualitative overview of current activities, identifies opportunities for cooperation amongst members and “gaps” that need to be addressed in order to accelerate climate finance at subnational and local levels.

Key points

The main results highlighted in the 2016 report are the following:

  • Early stage project development is a priority in members’ delivery, confirming that readiness and upstream phases are crucial to feed the pipeline of projects available for investment, and in particular those of interest to private investors
  • Multilateral and Bilateral Development Banks, Networks of local and subnational governments, NGOs, Research Centres, Foundations and their partners are the main providers of Project Preparation Facilities (PPFs). In many cases, the financing that is provided for project preparation is part of a wider project or programme that focuses on readiness.
  • Financial innovation is evident across a broad spectrum of complementary initiatives that operate the full-length of the project deployment value-chain, from capacity building through project identification, development and financing.
  • Although initiatives related to pricing externalities are growing in number, the sector is still in its infancy. In order to create incentives for investment in local resilience, a lot remains to be done to support local and subnational governments in building fiscal autonomy, integrating and further adopting standards, operational frameworks and measurement tools.
  • While financial intermediation for urban lowcarbon / resilient infrastructure projects remains a core topic to be addressed, few initiatives focus on supporting Regional and Local financial institutions in identifying needs, opportunities and gaps.
  • Most of the projects are focused on raising awareness and building partnerships with governments, international organizations and banks, but largely fall short of addressing the need for adequate coordination and support of local governments and their networks.