Beyond the finance gap: Building the conditions for climate investment at scale

Climate resilience is no longer being viewed solely as a response to climate risk. It is increasingly recognised as an investment opportunity — one that strengthens competitiveness and creates long-term economic value. Attention is therefore shifting from the scale of the challenge to the scale of the opportunity.

That shift was evident throughout discussions at this year's LCAW, held against the backdrop of record-breaking temperatures in the UK.

While familiar constraints remain — rising debt burdens, declining official development assistance, limited public finance and accelerating climate impacts — the conversation focused less on why resilience matters and more on the institutions, partnerships, and investment pipelines required to move from climate ambition to implementation.

During LCAW, four priorities stand out:

1. Valuing resilience as an investment opportunity

We cannot invest in what we do not value. The economic case for resilience is becoming stronger, yet this value is not consistently reflected in investment decisions. Analysis of more than 300 adaptation and resilience investments in water, agriculture, infrastructure and health found that every 1 USD invested generated more than 10 USD in benefits over ten years, demonstrating that resilience creates value far beyond avoided climate losses.

Yet these wider benefits are not consistently captured in investment decisions. Unlocking investment requires better climate risk data, stronger evidence on the costs of inaction, and more robust approaches to valuing resilience over an asset’s lifetime. Investors must also navigate a fragmented landscape of climate risk and disclosure frameworks, making investment opportunities harder to assess and compare.

Progress is being made. Initiatives such as the Adaptation and Resilience Investors Collaborative (ARIC) are helping develop more consistent approaches to resilience measurement, while climate risk screening is becoming increasingly embedded across infrastructure, financial institutions, and investment portfolios.

The challenge is no longer proving that resilience matters; it is ensuring its value is consistently recognised in the decisions that determine where capital flows.

2. Building a pipeline of investable opportunities

Recognising the value of resilience is only the first step. The greater challenge is translating priorities into a pipeline of investable opportunities that can attract finance beyond traditional development assistance.

Most countries already have ambitious National Adaptation Plans (NAPs) and climate strategies. What remains scarce are projects that are sufficiently prepared, structured, and able to attract a broader range of capital, including private investment where appropriate.

Closing this gap means moving beyond planning to project preparation — turning national priorities into investment-ready opportunities with clear risks, returns, and delivery pathways.

Technical assistance has a critical role to play. In Zambia, for example, NIRAS is supporting the Ministry of Green Economy and Environment and the Public-Private Dialogue Forum to translate national adaptation priorities into a pipeline of investment-ready projects, while strengthening the institutional systems and project preparation processes needed to mobilise public, private, and blended finance.

Looking ahead to COP31, initiatives such as Türkiye’s Climate Implementation Bridge reflect growing recognition that climate ambition must be matched by delivery mechanisms capable of translating national priorities into investable opportunities.

3. Matching the right finance to the right opportunity

Investment flows when incentives, risks, and returns are aligned.

Climate resilience investments often bring together actors with different objectives: governments pursuing development outcomes, investors seeking risk-adjusted returns, financial institutions managing portfolio risks and communities seeking greater resilience and improved wellbeing.

Mobilising investment therefore depends on creating the enabling conditions that align these interests through policy, blended finance, and partnerships. Public finance will remain essential for delivering public goods and strengthening institutions, while multilateral development banks, development finance institutions, and philanthropies can use guarantees, concessional finance, and risk-sharing instruments to help mobilise private investment.

The challenge is not simply finding more capital, but understanding what prevents finance from flowing and designing solutions that address those barriers. In Nepal, NIRAS is supporting the Government and the Asian Development Bank to design the Green and Resilience Financing Facility (GREFF), a blended finance facility designed to address financing, institutional and technical gaps that currently constrain implementation of Nepal’s NAP, Nationally Determined Contribution, and Green, Resilient and Inclusive Development agenda.

Structured as a multi-tranche financing facility, GREFF will combine public and private finance through a range of instruments, including loans, guarantees, bonds and other innovative financing mechanisms. Beyond providing capital, the facility will support the development of a pipeline of finance-ready climate adaptation investments that prioritise climate-vulnerable communities. It will also strengthen the enabling environment for adaptation finance and foster partnerships across government, civil society, financial institutions, the private sector and technology providers.

GREFF demonstrates the type of collaboration and capital structuring needed to mobilise investment for climate resilience at scale. Success depends on aligning different forms of capital, expertise and stakeholders to create interventions that are both investable and deliver meaningful resilience outcomes.

4. Scaling investment starts with country leadership

Mobilising climate investment at scale requires more than individual projects. It depends on strong country leadership to set priorities, coordinate actors, and create investment opportunities aligned with national development and resilience objectives.

Country-led platforms are key in bringing together governments, development partners, financial institutions, and investors around shared priorities, reducing fragmentation, and creating the conditions to mobilise public, private and blended finance.

Similar approaches are emerging across the international development landscape. The World Bank's Water Forward Initiative, for example, promotes government-led "water compacts" that align policy reform, institutional strengthening, project preparation, and investment planning around national water security priorities. By creating a shared framework for action, these platforms can help build investor confidence, strengthen investment pipelines, and unlock additional sources of finance.

As concessional finance becomes increasingly constrained, effective country-led platforms will become even more important in directing scarce resources towards nationally prioritised investments, while supporting the policy and institutional reforms needed to unlock additional sources of finance, including from domestic public resources, local financial institutions and private investment.

From ambition to implementation

The most encouraging message from LCAW was that the conversation is shifting from commitments on paper to delivery in practice. The finance gap remains significant, but the challenge is not simply mobilising capital—it is building the institutions, partnerships and investment pipelines that enable finance to flow.

Climate ambition is increasingly in place. The next phase is responding to the scale of the opportunity by creating the conditions for investment to reach the places and priorities where it can deliver the greatest resilience and development impact.