CTI PFAN Background Paper on Adaptation
This paper is an introduction to private sector financing of climate change adaptation initiatives in developing countries. It is primarily targeted at private sector investors and financiers.
It is part of an effort by USAID’s CTI Private Financing Advisory Network (PFAN) to establish methods for facilitating such investments. Designed for those new to the climate adaptation field, it first describes what adaptation means and how related efforts are being carried out by development agencies globally - and the need for private sector financing.
It then explains ways that the private sector can support climate adaptation projects, through public-private partnerships and other means. It notes that it is likely that innovative risk allocation models and public–private blending mechanisms will need to be developed to leverage the use of public resources by private funding.
The sectors that show the most promise for community support for such engagement are agriculture, water and sanitation, energy and energy access, and tourism. CTI-PFAN supports using a regional approach to facilitate such projects.
Lastly, the paper outlines information that the finance community should include in project proposals.