A treasure waiting to be discovered – trillion dollars’ worth adaptation market on the horizon
By and large, the climate mitigation sector is “market ready” with numerous investment opportunities that are seized by several corporations already investing in it. The climate adaptation sector, in contrast, with its monetization and investment potential, is still a blind spot for finance actors, a hidden treasure yet to be discovered. Adaptation finance is the “new kid” on the block and barely understood by big investors of mainstream finance.
How can IFAD push the frontier and get the broader public and private sector interested and engaged in adaptation?
On Monday 20th, IFAD organized a learning event on Climate Adaptation Finance with the participation of Jo Puri (AVP SKD, IFAD), Paul Clements-Hunt (CEO, Blended Capital Group) and Gulnara Yunusova (Treasurer and Director, IFAD).
It was an exciting moment for IFAD Knowledge to introduce the first Food4thought episode of its monthly series. The purpose of the series is to bring state of the art thinking and provoke an inspiring debate around topics that are critical for IFAD’s mandate.
Jo Puri affirmed that climate adaptation finance is an area of great potential for IFAD since it has the comparative advantage of exploring this market. Today, more than 90% of IFAD’s climate portfolio is “adaptation-oriented” and IFAD is committed to have at least 40% of its’ overall portfolio on climate finance. Having valuable know-how based on operational knowledge and experience positions IFAD at the core of the nascent market that is fast evolving. IFAD is best prepared to lead the establishment of the market by bringing awareness of the public and private sector agencies and helping to develop its products.
Clements-Hunt stressed that mobilizing private capital for adaptation is an incredible development opportunity while being a huge challenge. IFAD can frame and drive the agenda for dynamic adaptation by addressing these challenges in what is a nascent market. IFAD can be in the vanguard to re-imagine how the UN system is engaging with private markets on adaptation by framing the market, driving new partnerships and creating new investment products and platforms. The SDGs’ goals and the deep resilience needed to strengthen rural communities globally, in an era of accelerating climate change, can’t be delivered without adaptation financing at massive scale. This demands novel pooling of public-private capital and finance as well as blended instruments to deploy funds.
The top 4 actions for IFAD to position itself in the adaptation finance industry include:
Adaptation is a classic public good challenge where IFAD can play a pivotal role in mobilizing private capital/finance into rural communities and leverage the economic benefits rising from adaptation.
Many thanks to all participants of the event. Recording is available on the IFAD YouTube channel.
How can IFAD push the frontier and get the broader public and private sector interested and engaged in adaptation?
On Monday 20th, IFAD organized a learning event on Climate Adaptation Finance with the participation of Jo Puri (AVP SKD, IFAD), Paul Clements-Hunt (CEO, Blended Capital Group) and Gulnara Yunusova (Treasurer and Director, IFAD).
It was an exciting moment for IFAD Knowledge to introduce the first Food4thought episode of its monthly series. The purpose of the series is to bring state of the art thinking and provoke an inspiring debate around topics that are critical for IFAD’s mandate.
Jo Puri affirmed that climate adaptation finance is an area of great potential for IFAD since it has the comparative advantage of exploring this market. Today, more than 90% of IFAD’s climate portfolio is “adaptation-oriented” and IFAD is committed to have at least 40% of its’ overall portfolio on climate finance. Having valuable know-how based on operational knowledge and experience positions IFAD at the core of the nascent market that is fast evolving. IFAD is best prepared to lead the establishment of the market by bringing awareness of the public and private sector agencies and helping to develop its products.
Clements-Hunt stressed that mobilizing private capital for adaptation is an incredible development opportunity while being a huge challenge. IFAD can frame and drive the agenda for dynamic adaptation by addressing these challenges in what is a nascent market. IFAD can be in the vanguard to re-imagine how the UN system is engaging with private markets on adaptation by framing the market, driving new partnerships and creating new investment products and platforms. The SDGs’ goals and the deep resilience needed to strengthen rural communities globally, in an era of accelerating climate change, can’t be delivered without adaptation financing at massive scale. This demands novel pooling of public-private capital and finance as well as blended instruments to deploy funds.
The top 4 actions for IFAD to position itself in the adaptation finance industry include:
- Advocating, educating, reeling private capital into adaptation in middle income and least developed countries.
- Targeting, engaging, phasing different parts of the investment chain to mobilize capital at scale into rural communities
- Leveraging the CoP26 Article 6 agreement that opens a range of market and non- market opportunities for government and private sector to generate revenue through carbon markets for both mitigation and adaptation.
- Implementing new products: Food Security and Nutrition Performance-related bonds, Triple Next Impact Funds and Multiline insurance for agri-infrastructure
Adaptation is a classic public good challenge where IFAD can play a pivotal role in mobilizing private capital/finance into rural communities and leverage the economic benefits rising from adaptation.
Many thanks to all participants of the event. Recording is available on the IFAD YouTube channel.
