National DFIs: Critical allies for climate action
Executive Summary: National development finance institutions (NDFIs) can play a vital role in promoting climate financing and thus achieving Nationally Determined Contributions (NDCs) due to their knowledge of local markets, their close connections to domestic public and private stakeholders and their ability for local currency financing. However, currently NDFIs are not involved as intensively in this field as they could be. This report discusses and recommends how national development finance institutions could play a greater role in climate financing, how they could be best supported by the ICR Facility and others to do so.
- Dialogue between NDFIs and national stakeholders engaged in climate policy and financing should be strengthened.
- NDFIs would benefit from additional capacity building and experience sharing on how to access international climate funds, including accreditation as well as development of project proposals.
- Accreditation and access to international climate funds for NDFIs should be promoted as it is a very effective approach to mobilise climate finance.
- In parallel, approaches beyond direct access for NDFIs should be explored further, e.g. partnering of NDFIs with public or private accredited financial institutions to structure climate action credit lines.