Spotlight On: Climate Finance

Climate change is threatening economies around the world – today. As temperatures continue to climb, the scale of risks as well as the potential for transformative opportunities are significant. Yet the current scale and pace of climate finance mobilization is insufficient, plagued with mis-aligned incentives and risk appetites, inequitable access, and mismatch between finance mechanism and pipeline of projects urgently needing investment. Innovative collaboration and partnerships are needed to unlock the climate finance required to meet the urgency and ambition this moment requires.

Abt Global works across sectors and financing partners, including donors, development finance institutions, multilaterals, the private sector, and philanthropies to unlock capital flows. We improve access to climate finance and climate financing frameworks, build equity-focused climate change mitigation and adaptation policies, and design, implement, and monitor climate-resilient projects. Our economic and financial analyses support market development, account for the value of nature-based solutions and healthy ecosystems and inform policy and regulatory change. Through collaborative finance and market approaches we help communities and governments unlock the ambitious climate financing needed to limit global temperatures to 1.5 degrees Celsius.

Expertise  
 

Our capabilities include:

• Blended finance structuring
• Fund design and structuring
• Business strategy development
• Investment advisory
• Pipeline sourcing
• Research and analysis
• Private sector mobilization
• Financial modelling
• Gender lens and climate investing
• Climate risk assessment and prioritization
• Climate literacy training
• Clean energy finance mobilization
• Public sector and private sector finance mobilization
• Green Climate Fund project preparation
• Resilient food systems investment planning
• Resilient health systems investment planning
• Renewable energy investment planning
• Financing for decarbonization and greenhouse gas mitigation
• Methane mitigation feasibility analysis

Relevant Experience  
 

Health Electrification and Telecommunication Alliance (HETA) 
Client: USAID 

The Health Electrification and Telecommunication Alliance (HETA) is Power Africa’s flagship initiative for health facility electrification and digital connectivity in sub-Saharan Africa. HETA aims to electrify 10,000 health facilities over a five-year period and primarily focuses on public health facilities. To reach this goal, HETA is mobilizing $150 million in financing from private sector partners. Abt’s role is to develop innovative financial instruments such as impact bonds, fundraising technical assistance windows, and securing long-term operations and maintenance funding to mobilize private capital at scale for sustainable health facility electrification.

Climate Economic Analysis for Development, Investment, and Resilience (CEADIR) 
Client: USAID 

As the technical lead for the Climate Economic Analysis for Development, Investment, and Resilience (CEADIR), Abt delivered TA for more than $11.4 million in program activities. The activity leveraged public and private sector funding by supporting climate financing readiness, assessing financing instruments and sources, and strengthening local capacity to plan, implement, and monitor projects. Abt developed new tools and methods to implement clean energy, sustainable landscapes, and adaptation, supported Low Emission Development Strategies, Nationally Determined Contributions, and National Adaptation Plans. CEADIR also provided STTA for USAID Mission buy-ins, global thought leadership, and development and dissemination of good practices from USAID/Washington. Abt helped catalyze private investment in climate mitigation by identifying barriers to financing, developed 52 assessments to facilitate clean energy finance lending, mobilized $17.7 million in investment, including a $10.8 million guarantee by the U.S. Development Credit Authority (DCA).

Investing in Women (IW) 
Client: Australia Department of Foreign Affairs and Trade (DFAT) 

Launched in 2016, IW catalyzes inclusive economic growth through private sector development and women’s economic empowerment in the Philippines, Indonesia, Vietnam, and Myanmar. By working through impact investor intermediaries and mobilizing private capital for Small and Medium Enterprises (SMEs), the program develops and deploys several blended-finance structures, including first-loss debt, equity, sidecar syndicate, and revolving fund. Using a gender-lens investing approach, IW thus far has collaborated with 10 investing partners to power 82 women-owned SMEs with $15.4 million AUD in investments and $291.4 million AUD in co-investments. In partnership with Patamar Capital and Kinara Indonesia, IW also structured blended-finance grants of $26 million AUD with impact investors, and has mobilized $150 million AUD of private capital, deployed debt, and equity capital to 51 women’s SMEs in the sustainable production and consumption sector. Additionally, IW provided TA to 17 women SMEs with the aim to strengthen their investment readiness. IW also engages leading industry platforms (e.g., Gender Smart Investing and AVPN) and experts (e.g., Value for Women) to implement gender norms advocacy campaigns.

Green Climate Fund (GCF) Project Preparation Facility 
Client: Green Climate Fund 

Abt is working with GCF to provide project preparation support and technical assistance to GCF Accredited Entities. Our team designs and executes project preparation activities that build capacity, enable projects to mature quickly, and facilitate access to funding for entities within GCF’s priority areas and countries. Abt has delivered targeted support to GCF directly and to government- and non-government-accredited entities in 10 countries via the GCF Project Preparation Facility and Readiness Programme supporting countries to access climate finance for adaptation and mitigation projects. By leveraging our expertise in conducting in-depth research, stakeholder interviews, and detailed pipeline reviews, Abt developed new streamlined processes, guidance, and tools to align the results-based monitoring and reporting guidelines to the new Simplified Approval Process Pilot Scheme policy and updated GCF strategic plan. This benefited GCF Direct Access Entities, National Designated Authorities, and GCF Accredited Entities involved in project and program preparation, thereby easing access to GCF funding.

Clean Power Asia (CPA) 
Client: USAID 

The Abt-led CPA worked with Lower Mekong countries and other Association of Southeast Asian Nations (ASEAN) member states to bolster power sector investments in environmentally friendly, grid-connected renewable energy. CPA mobilized more than $7 billion USD of renewable energy investment and $1.2 billion USD for climate change adaptation, showcasing Abt’s ability to work across modalities to increase access to finance and foster a sustainable enabling environment. Within the $7 billion USD of renewable energy investment, Abt accelerated private sector investment in modern power systems, including battery storage energy systems, distributed photovoltaics, and electric vehicles. CPA also supported transactions and financing structures, directly facilitating solar and wind investments of $469 million USD and deployment of 359 MW of renewable energy and fostered competitive procurement through the $1.5 million USD Clean Energy Windows of Opportunity Fund. CPA fostered an environment conducive to greater development and deployment of grid-connected renewable energy. Through targeted TA, CPA also introduced several renewable energy policy incentives that are now being used in the region, including feed-in tariffs, self-consumption schemes, net-metering, tax incentives, and financing schemes, and competitive energy procurement.

Resilient Economies and Sectors (RESET)  
Client: USAID  

Abt-led Resilient Economies and Sectors (RESET) promotes climate finance for sustainable, localized climate solutions in 11 ESC countries, including Antigua and Barbuda, the Bahamas, Barbados, Dominica, Grenada, Guyana, Saint Kitts and Nevis, Saint Lucia, Saint Vincent and the Grenadines, Suriname, and Trinidad and Tobago. RESET’s goals include encouraging the private sector to invest in blue and green economies in the ESC, incentivizing sustainability and empowering countries to create their mitigation and adaptation policies and solutions. Through RESET, Abt will work to enhance the capacity of countries to increase the number of blended finance projects or deals supporting climate adaptation. The project aims to mobilize US$200m for climate change adaptation and help 10,000 people apply climate or disaster smart practices in their businesses and operations.

Comprehensive Action for Climate Change Initiative (CACCI) 
Client: USAID 

The Comprehensive Action for Climate Change Initiative (CACCI) is USAID’s global flagship program to help nations meet their Paris Agreement climate commitments. CACCI is a mechanism that is being used to strengthen countries’ institutional capacity to meet their climate commitments, ensure local ownership and inclusive voice, and improve the enabling policy and regulatory environment for climate interventions. Through CACCI, Abt is working with countries to create programs and policies to mitigate and adapt to climate change and implement their Nationally Determined Contributions (NDCs) and National Adaptation Plans (NAPs). Through CACCI, USAID is engaging private sector partners through the CACCI Partnership for Climate Action (PCA). The goal is to support private sector partners to invest in critical projects that decarbonize economies and strengthen national resilience, help shape policies that enable climate investments and financial flows, and track and report on their emissions and pathways toward net-zero.