We’ve just published our 33rd GCF insight, titled Bridging the investability gap: Financing instruments for climate adaptation and resilience.
The world is now very likely to pass 1.5°C of warming within the next decade, and the costs of adapting are rising fast. Developing countries could need up to USD 365 billion a year for adaptation by 2035, while international public adaptation finance came to only USD 26 billion in 2023. Private capital has done little to make up the difference. Investors still struggle to value resilience, adaptation projects often lack clear revenue streams, and within the GCF, standalone adaptation projects received just 17.4 per cent of private sector funding between October 2021 and September 2026.
This 33rd GCF Insight looks at how that picture can change. It sets out the structural barriers that keep private investors away from adaptation, tracks how the GCF has deployed equity, loans, grants and guarantees across its private sector portfolio over the past five years, and analyses how five instruments can lower risk and improve returns for investors. These are blended equity vehicles, concessional debt, guarantees, green and adaptation and resilience bonds, and parametric insurance. The report also acknowledges where instruments fall short, particularly concessional debt and bonds in cases where adaptation investments generate little direct revenue.
The analysis rests on E Co’s consultancy experience with the GCF and private sector organisations, a desk review of the GCF project database and wider climate finance literature, case studies spanning Southeast Asia, the Pacific and Central and West Asia, and insights from practitioners across private equity, blended debt and capital markets. This evidence shows how public finance can be used strategically to absorb the risks private investors are not ready to take on, and so lay the groundwork for private capital to enter and grow adaptation markets.
This is our fifth report on the private sector’s role in climate finance. It builds on our 30th GCF insight, ‘Bridging the gap: Unlocking more effective collaboration between the GCF and the private sector,’ which explored how the GCF can better engage private sector organisations, and our white paper, ‘Bridging the investability gap: Mobilising private capital for a resilient future,’ which examined the structural barriers to private investment in climate action.
Download your 33rd GCF insight report here.
About GCF insight
This survey and report is an initiative of E Co, and emerges from work we are doing to accelerate low-carbon climate-resilient development. The E Co. team designed and administered a survey which was used to inform and prepare this report. We also explored four case studies, based on projects our Consulting team had previously worked on, for a more in-depth understanding of issues and solutions. E Co. conducted this research independently and is not affiliated with the Green Climate Fund (GCF), the GCF Secretariat, or donors. The views expressed in this report are those of the authors and do not represent those of the GCF. Nothing in the interviews or any information or material relating thereto shall be construed as implying any official endorsement of, or responsibility on, the part of the GCF.
About E Co.
E Co. is a leading climate finance and development consultancy headquartered in London, based globally. We provide consulting support to access climate finance from the GCF (and other funds and donors) across several service areas, including: market assessment, strategy formulation, policy development, monitoring and evaluation, fund support and training. However, we may be best known for our programme and project design services in response to the Fund’s criteria and processes.