Towards Investment Readiness. NDC financing and good practices analysis - Policy Brief

The Paris Agreement (PA), adopted in 2015, seeks to galvanise the international community to address climate change and to hold the rise in global temperature to significantly below 2°C (ideally to 1.5°C) compared to pre-industrial levels. Central to achieving this goal are Nationally Determined Contributions (NDCs), which outline each country's targets and strategies for mitigating climate change and adapting to its impacts. However, while NDCs are critical tools for climate action, they often lack the necessary detail and structure to attract the investments needed for their implementation.

This policy brief addresses the pressing challenge of mobilising finance for NDCs by examining the concept of investment readiness. NDC investment readiness refers to the capacity of countries to align financial flows – public and private, domestic and international – with climate goals. It involves creating an enabling environment through effective policies, financial instruments, and institutional frameworks. The overall report provides an in-depth analysis of the building blocks for successful NDC investment planning, drawing on case studies from Georgia, Rwanda, Jordan, Chile, and Germany.

The findings highlight three key phases in the design and implementation of NDC investment plans – planning, implementation and learning – and concludes with actionable recommendations aimed at policymakers, international partners, and private sector stakeholders. These include integrating NDC investment planning with other finance mobilisation strategies, fostering long-term public-private cooperation, and addressing institutional barriers to investment. Capacity building and financial literacy initiatives are also highlighted as crucial for empowering stakeholders to design and implement effective climate finance strategies.

By showcasing best practices and lessons learned, this report provides a roadmap for countries seeking to enhance their investment readiness for NDC implementation. It offers a compelling case for the importance of sound investment planning to achieving global climate goals and underscores the role of innovative financial instruments and stakeholder engagement in driving climate action forward.