Call summary :

Climate Adaptation

Scaling up investment in climate adaptation is critical to building global resilience to worsening climate impacts. While adaptation investment is growing, it is far from what is needed. In 2019-2020, of the total USD 653 billion annually tracked to climate finance, just USD 49 billion – less than 10% – was committed to climate adaptation. Creating opportunities in developing countries to attract public and private investment in adaptation is urgent.

With the support of the U.S. Department of State, the Lab is seeking proposals for innovative financial instruments and solutions that channel investment into building climate resilience and responding to growing climate risk, including at a systemic level. There is a critical need to develop and scale a broad array of financial solutions – including debt and equity facilities, results-based instruments, project finance, and insurance mechanisms – that enable capital to flow to adaptation.

Submissions should focus on climate-stressed regions in developing countries and identify how the proposed financing approach would address specific physical climate risks and overcome barriers to mobilizing finance for climate adaptation. Submissions should also include a plan to phase down public financial support while offering attractive risk-adjusted returns to investors to scale private investment. Lastly, ideas should demonstrate the potential to avoid maladaptation, support improved livelihoods, and strengthen the broader financial ecosystem in the implementation countries.


The Lab Criteria

- Innovative:
An instrument is innovative when it demonstrates the ability to address, directly or indirectly, barriers to private climate finance that are not yet being addressed by the market, or (2) that will be addressed in an improved manner compared to other approaches.

- Actionable:
An instrument is actionable when it clearly identifies (1) the type of entity(ies) that could implement it, (2) a pathway towards setting-up a market test for the idea (e.g. pilot, first fund), including the timeframe, activities and key milestones, and (3) possible challenges to setting-up the market test for the idea and related management strategies.

- Financially sustainable:
An instrument is financially sustainable when it identifies a realistic strategy to (1) operate on a commercial basis, having phased out any public, concessional, or other catalytic financial support, and (2) achieve its intended long-term objectives and overcome key implementation challenges.

- Catalytic:
An instrument is catalytic when it demonstrates the potential to (1) mobilize private climate capital within a sizeable market, (2) be scaled up or replicated in other contexts, and (3) achieve positive climate, development, and environmental impacts.

- Lab Fit – Value Add:
The Lab seeks to offer a significant value-add to the success of the selected ideas and teams, ensuring the capabilities of the Lab team and network complement the proposing team’s capabilities and needs. We look forward to working with teams with sufficient time and a functional governance structure to participate fully in the Lab process.

Funding:
As of October 2023, the Lab has supported developed and endorsed 68 instruments that have collectively mobilized over USD $3.5 billion for action on climate change and sustainable development, with $1.4 billion in private investment. The Lab has been endorsed by the G7, as well as by Brazil and India.
$ 250 k : value of in-kind analytical and communications support received by selected Lab ideas