Climate Finance
UNDP Rome Centre
Our aim
Catalyse international deployment of public and private capital to climate mitigation and adaptation projects in developing economies.
The challenge
Climate change poses significant risks to ecosystems, human health, and economic stability. It is estimated that 3.6 billion people live in areas of high vulnerability to climate change impacts such as droughts, floods, heat waves, extreme weather events and sea-level rise, with Africa being the most vulnerable region despite contributing only 4% of global carbon emissions. As the continent faces heightened weather risks, electricity security issues are also exacerbated. As of 2021, over 750 million people lack access to electricity, mainly in Sub-Saharan Africa and South Asia, and 2.6 billion rely on hazardous cooking methods. Rural electrification rates are particularly low, with only 28% of rural Sub-Saharan Africans having access to electricity, compared to 79% in urban areas. The risk of species extinction also increases with every degree of warming, with 20-30% risking to die out if global mean temperatures go up by 1.5-2.5 degrees. All these necessitate increased capital investment in climate action.
+750M
people lack access to electricity
3.6B
people live in areas highly vulnerable to climate change impacts
30%
of species are at risk of extinction if global mean temperatures go up by 1.5 - 2.5 degrees
However, financing constraints impede large-scale capital mobilization for climate action and sustainable development. Despite climate finance reaching $1.3 trillion in 2021-2022, it must exceed $4.35 trillion annually by 2030 to meet climate targets. Developing economies face greater urgency due to vulnerabilities like agricultural dependence, infrastructural weaknesses, limited technology access, and debt dependency. However, securing finance is particularly difficult for these countries. For instance, in 2021-2022, only 3.7% of global climate finance reached Sub-Saharan Africa and the MENA region, and just over 2% went to Least Developed Countries. A collective effort to scale up climate finance for these regions is critical.
Our goals
To increase the flow of capital towards promising climate mitigation and adaptation initiatives. We break this down into three objectives:
Work with policymakers to improve legal, policy and regulatory frameworks, creating the necessary conditions to attract investment in climate specific sectors. | |
Generate a pipeline of bankable, high-impact projects that can unlock capital at scale. | |
Increase the flow of transnational investment flows into these projects. |
Our approach
UNDP Rome Centre is uniquely positioned to identify and support the many projects that will help developing economies achieve their climate-related objectives. Each country has a unique set of challenges and presents a unique set of opportunities in this context. UNDP, with its mandate to support sustainable growth and its extensive in-country presence, has decades of experience supporting countries achieve their objectives.
We have leveraged UNDP’s extensive network of country offices to build a local presence in numerous countries tasked with identifying the most impactful climate initiatives. To turn such initiatives into a pipeline of bankable projects, we provide technical assistance in form of direct financial support, as well as in kind support that brings our expertise, gained across sectors and countries, to each specific project.
The direct financial support comes in three different types:
UpstreamSupport the strengthening of the policy, legal and regulatory environment, aligned with national development needs, national strategies, and policy priorities | |
MidstreamSupport the de-risking of projects to make them bankable and ready for investment, for example by enhancing the technical & operational capacity and bolstering strategic planning & financing | |
DownstreamSupport mobilisation of finance by building connections with investors and, if needed, structuring blended financial transactions that mitigate financial risks |
We match projects that are ready to raise funds with suitable sources of capital. To this end, we are actively developing partnerships with international climate finance providers looking to increase their exposure in developing countries.
Geographical focus
Climate finance at UNDP Rome Centre
The United Nations Development Programme (UNDP) is the knowledge frontier organisation for sustainable development in the UN Development System and serves as the integrator for collective action to realise the UN Sustainable Development Goals (SDGs).
As part of its 2023-2025 Strategic Plan, UNDP has pledged to promoting the alignment of over 1 trillion USD of public and private investment to the SDGs, and to support 500 million people to gain access to clean energy.
In alignment with these goals, UNDP Rome Centre implements two programmes, with the support of the Italian Ministry of Environment and Energy Security: PISTA, the Platform of Investment Support and Technical Assistance, and the Italy-UNDP Energy Partnership.