Title page 1

Contents 7

Foreword 4

Acknowledgments 6

Abbreviations and acronyms 10

Executive Summary 12

Access to finance for climate and biodiversity is defined by structural constraints and fragmentation 12

A joint agenda for developing countries and donors on climate and biodiversity finance 13

Overview 16

Finance for climate and biodiversity is growing, but the countries that need it most find it hard to access 16

New analysis confirms that climate and biodiversity finance allocations are not always shaped by need or vulnerability 25

Key donor actions for enhanced access: tailoring support to the development reality at country-level 29

1. The challenge of accessing climate and biodiversity development finance 32

1.1. The growing financing needs for climate and biodiversity require moving from commitments to access 33

1.2. International finance is critical for developing countries in the access debate, including for climate and biodiversity 33

1.3. Debates on access to finance reflect fundamental misconceptions about the reality of financing 35

2. Understanding the complex international architecture of climate and biodiversity finance 41

2.1. Alleviating developing countries' financial constraints is a key rationale of international finance 42

2.2. In the environmental context, access to finance focuses on vertical funds, but they remain small players 43

2.3. Vertical climate and environment funds are difficult to access, especially for countries with limited capacity 44

2.4. Bilateral donors and multilateral development banks provide the bulk of climate and biodiversity finance 49

2.5. Donor fragmentation constrains effective access, compounded by increasing disbursement delays 52

2.6. Integrated climate and biodiversity approaches can improve impact, but may complicate access and blur additionality 56

2.7. Private capital mobilisation and innovative instruments so far provide only limited additionality in countries with the greatest access constraints 58

3. Towards an integrated approach to understanding finance for climate and biodiversity 65

3.1. Climate and biodiversity finance follows broader development finance patterns, but with important limitations 66

3.2. A fuller understanding of country selection and allocation of climate and biodiversity finance requires going beyond traditional models 68

3.3. The findings confirm that climate and biodiversity finance follows the same allocation drivers as development finance 70

3.4. Environmental factors are incorporated into allocation decisions, but do not overcome underlying access constraints 78

3.5. The overall allocation outcomes point to structural inequities and persistent access gaps 80

3.6. Access to finance goes beyond eligibility and requires a shared reform agenda by donors and developing countries 88

4. Overcoming country barriers to accessing climate and biodiversity finance 90

4.1. Strong narratives can initiate access to finance, but institutional capacity is key to ensure sustained flows 91

4.2. Coherent, integrated national strategies are prerequisites for turning eligibility into sustained climate and biodiversity finance access 95

4.3. Domestic governance and co-ordination are foundations for the effective access to climate and biodiversity finance 100

4.4. Robust domestic systems and instruments are prerequisites for scaled climate and biodiversity finance 103

4.5. Capacity underpins the entire finance access pipeline from proposal to results 109

5. Donor entry points to support access to climate and biodiversity finance 115

5.1. Embedding climate and biodiversity vulnerability in allocation frameworks would avoid sidelining the most vulnerable countries 117

5.2. Flexible donor co-financing and procurement policies are key for fit-for-purpose access 119

5.3. Strengthening and working through country systems is essential for long-term effectiveness and sustainability 121

5.4. Improving donor co-ordination is key to improve country access to finance 123

ANNEX A. Statistical and econometric methodology 128

ANNEX B. From allocation patterns (Chapter 3) to access barriers (Chapters 4-5) 154

ANNEX C. Key takeaways of the six case study missions 157

ANNEX D. Questionnaire 218

References 221

Boxes 46

BOX 2.1. There are several barriers to access the largest VCEFs 46

BOX 2.3. Sustainable mobility in two LDCs: innovative finance in Togo and Senegal 61

BOX 2.3/BOX 2.4. Rwanda's sustainability-linked bonds signal ambition and may transform access 62

BOX 2.4/BOX 2.5. Gabon's debt-for-nature swap did not lead to greater access to finance 64

BOX 3.1. Methodology to model public international finance allocations 68

BOX 3.2. Drivers behind the dominance of loans in climate and biodiversity finance and the consequences for vulnerable countries 74

BOX 3.3. Provisions to increase international climate adaptation finance by 2025 81

BOX 4.1. Country case studies on strong climate and nature narratives to enhance access to finance 92

BOX 4.2. Togo's 2021-2025 Presidential Roadmap's cross-ministerial integration reassures donors 96

BOX 4.3. The potential of South-South co-operation in climate and biodiversity action 97

BOX 4.4. Case study countries are adopting green budgeting and reporting 105

BOX 4.5. Environmental funds help improve access to finance and increase impact 106

BOX 4.6. The Tropical Forest Forever Facility promises significant resources for developing countries 108

BOX 4.7. Strengthening country-led action and capacity through direct access and enhanced accreditation 110

BOX 4.8. Strategic accreditation develops capacity and access to VCEFs 111

BOX 5.1. The African Development Bank's performance-based allocation system 117

BOX 5.2. Lessons from climate and biodiversity-focused country platforms 125

BOX 5.3. Recent VCEFs reforms to improve co-ordination 126

TABLE A.1. Summary of variables 138

TABLE A.2. Descriptive statistics of independent variables 140

TABLE A.3. Correlation matrix of independent variables 141

TABLE C.1. Key climate-related commitments by DAC member countries (2020-23) 164

TABLE C.2. Key biodiversity-related commitments by DAC member countries (2020-23) 165

TABLE C.3. Key climate-related commitments by multilateral institutions (2020-23) 165

TABLE C.4. Key biodiversity-related commitments by multilateral institutions (2020-23) 166

TABLE C.5. Key climate-related commitments by DAC member countries (2020-23) 174

TABLE C.6. Key biodiversity-related commitments by DAC member countries (2020-23) 175

TABLE C.7. Key climate-related commitments by multilateral institutions (2020-23) 175

TABLE C.8. Key biodiversity-related commitments by multilateral institutions (2020-23) 176

TABLE C.9. Key climate-related commitments by DAC member countries (2020-23) 184

TABLE C.10. Key biodiversity-related commitments by DAC member countries (2020-23) 184

TABLE C.11. Key climate-related commitments by multilateral institutions (2020-23) 185

TABLE C.12. Key biodiversity-related commitments by multilateral institutions (2020-23) 186

TABLE C.13. Key climate-related commitments by DAC member countries (2020-23) 194

TABLE C.14. Key biodiversity-related commitments by DAC member countries (2020-23) 194

TABLE C.15. Key climate-related commitments by multilateral institutions (2020-23) 195

TABLE C.16. Key biodiversity-related commitments by multilateral institutions (2020-23) 196

TABLE C.17. Key climate-related commitments by DAC member countries (2020-23) 204

TABLE C.18. Key biodiversity-related commitments by DAC member countries (2020-23) 205

TABLE C.19. Key climate-related commitments by multilateral institutions (2020-23) 206

TABLE C.20. Key biodiversity-related commitments by multilateral institutions (2020-23) 206

TABLE C.21. Key climate-related commitments by DAC member countries (2020-23) 215

TABLE C.22. Key biodiversity-related commitments by DAC member countries (2020-23) 215

TABLE C.23. Key climate-related commitments by multilateral institutions (2020-23) 216

TABLE C.24. Key biodiversity-related commitments by multilateral institutions (2020-23) 217

Annex Boxes 133

BOX A.1. Testing the causal impact of GCF accreditation on access to climate and biodiversity finance 133