How NAMAs Can Make Projects Bankable

Achieving national climate goals under the Paris Agreement will require substantial low-carbon, climate-resilient investment— and most of these resources will come from the private sector. The key challenge will be to turn countries’ Nationally Determined Contributions (NDCs) into concrete actions that create the conditions necessary for climate-compatible investment. Nationally Appropriate Mitigation Actions (NAMAs) are one tool for implementing NDCs that can be used to leverage domestic and international public support to mobilize private investment.

In CCAP’s recently-released policy brief, co-authored with UNEP-DTU and NewClimate Institute, we assess how to develop NAMAs that drive private investment. The paper identifies three main dimensions that need to be addressed to promote “bankability”— the conditions needed for the private sector to invest profitably in low-carbon projects. These include:

• Improving policy and institutional frameworks, including through policy mandates, regulations that level the playing field for low-carbon investment, and/or the development or strengthening of institutional arrangements for policy planning and implementation;

• Addressing financial risks and returns, including through financial mechanisms and interventions that lower real and perceived risks and/or improve returns sufficiently to mobilize low-carbon investment; and