Institutional architecture and mobilization of private capital for adaptation: the case of Rwanda

• Ministries of Finance can spearhead the creation of appropriate institutional frameworks for mobilizing and monitoring adaptation finance by setting a clear national vision and writing this into clear national targets and adaptation taxonomies.
• As exemplified by the case of Rwanda, an effective institutional landscape includes an ambitious Nationally Determined Contribution (NDC) coupled with a context-appropriate green taxonomy, a national green bank, and an array of innovative finance mechanisms to mobilize private capital, possibly including green bonds or securities. These institutions should intentionally target investments toward those projects that promise the greatest societal benefits from the smallest amount of concessional public capital while crowding in as much private investment as possible.
• MoFs can conduct several diagnostics to identify gaps in the policy, regulatory, and financial architecture to mobilize adaptation action and finance. These include tools such as the UNEP Sustainable Budgeting Approach (SBA), which can help MoFs identify, track, and resource strategic policy opportunities that support both national development objectives and critical environmental and social objectives.

Policies and projects to address gaps should be developed in ways that engage with local stakeholders and communities for greater impact and sustainability, and for alignment with broader development and poverty reduction agendas.