Building resilience to the impacts of climate change in developing countries will require considerable amounts of finance. Public and Private investment would be needed to finance climate adaptation and resilience. Climate change adaptation has mainly been financed from public sources such as climate funds, multilateral development banks and domestic government budgets. These current finance flows for adaptation are inadequate to meet financing needs and have led to an adaptation finance gap. The private sector will be important in bridging this finance gap. However, private investors are not investing in adaptation and resilience at the scale needed and have been reluctant to invest in climate adaptation and resilience due to poor investment worthiness and bankability of these projects. This thesis explores the barriers to private investment in climate resilient projects with the aim of developing solutions that answer the research question: ‘how can the investment worthiness of climate resilient projects be improved?’.
The research uses two Eastern Caribbean countries— Antigua and Barbuda and St. Vincent and the Grenadines as case study countries to understand the national level barriers to private investment. This thesis makes an original contribution to the literature on adaptation and resilience finance by developing the Sustainability Through Adaptation Financing Framework (STAFF)—a framework for connecting adaptation planning and finance through a common language in the form of an investment screening tool. The screening tool comprises 6 criteria that provide the basis for communicating risk exposure, risk management and resilience benefits. The financing framework is built on the recommendations and assumptions that (1) adaptation planning needs to be supported by an understanding of systemic climate risks; (2) there is potential to capture and transfer the value of adaptation through sustainable development and ‘Environment, Social and Governance (ESG) relevant indicators; and (3) the relationship between resilience and sustainability presents the opportunity to tap into sustainable finance.