Closing the financing gap for local climate action

Policy makers and representatives of financial institutions from the Latin American region gathered at a side event organised by EUROCLIMA+ in the framework of COP26 to highlight the importance

of financing for climate action at the sub-national level.

  • The discussion highlighted the need to improve the structuring of projects to access available investment and implement climate action in Latin American territories.
  • Different strategies to close this gap were presented in a multi-stakeholder dialogue promoted by the Climate Finance Action Line of the EUROCLIMA+ Programme.

In the framework of COP26 in Glasgow, the Side Event "Bridging the financing gap for local climate action: solutions for the development of bankable projects and appropriate financial vehicles" organised by the EUROCLIMA+ Programme, the French Development Agency (AFD) and the German Society for International Cooperation (GIZ) was successfully held.

The event took place on Wednesday 3 November in the EUROCLIMA+ Pavilion at the COP and it was broadcast virtually on the Programme's YouTube channel. There, experiences of different actors of the region’s financial ecosystem were presented with tools, services, methodologies and financial instruments, and a space for debate was opened to identify innovative areas for closing the climate finance gap at the subnational level.

The dialogue brought together policy makers and representatives of financial institutions from national and sub-national levels in Latin American countries.

The session was opened by Renato Casagrande, Governor of the State of Espírito Santo in Brazil, who presented the Reflorestar Programme; a pioneering initiative, launched in 2008, which innovated by transferring royalties from the oil industry to pay rural producers who conserve or restore their forests. Renato Casagrande stressed that "there is no lack of investment resources when there are well-structured projects".

Subsequently, the Mayor of Manizales (Colombia), Carlos Marín, provided a municipal vision, pointing out the importance of public budgets for the implementation of climate action. He referred to the case of the Manizales budget, where the allocation of resources for sectors included environmental protection and road, transit and transport infrastructure as priority criteria; two of the major themes of the political campaign of the "Green Mayor", as Marín nicknamed himself on social networks. Thus, one of his great battles is to "materialise these investments so that the next governments will maintain them".

For his part, Alejandro Miranda, Chief Executive of the Bank of Latin America (CAF), pointed out the importance of the role of the public sector as an articulator and promoter of private sector participation, in order to achieve the necessary scale for climate investments. In particular, Miranda highlighted the role of development banks in creating enabling conditions in the pre-investment phase, offering opportunities for capacity building, technical assistance, donations and structuring pilot projects. Also, in the investment phase itself, by offering credit, guarantees, equity and other financial instruments.

Sergio Gusmão, President of the Development Bank of the State of Minas Gerais (Brazil), spoke about the BDMG's plans to position itself as a green investment bank. This includes enabling the connection between the needs of cities, their technical and financial capacities and the minimum requirements for access to financial resources. For him, a better structuring of financing needs allows the mobilisation of combined financial instruments (blended finance), expanding the possibility of accessing capital in a preferential way or in a way that is less punished by the debt rating, i.e. accessing credit resources at lower cost.

"To address the barriers to climate finance at the sub-national level there is a natural option, which is decentralisation of administration, or improved access to national and/or regional public finance. This is an issue that goes beyond climate change, but from which local action on climate change would benefit. In any case, regardless of who administers these funds, coordination between different levels of government is fundamental to reduce the financing gap," concluded Marina Casas of ECLAC.

The moderator of the session, Marco Varea, EUROCLIMA+ Programme Manager at the French Development Agency (AFD), stressed that "the effort to leverage subnational climate finance is a key issue for the implementation of Nationally Determined Contributions under the Paris Agreement".

A large percentage of national public investment materialises through projects that are formulated and implemented at the local level, and it became clear that working with this geographic approach, in partnership with development banks and international cooperation, brings experience to strengthen the capacities of governments and financial institutions for financing the implementation of climate action.

About the Climate Finance Line of Action

Climate finance represents one of the priorities for the Latin American region. To move towards low-carbon and climate-resilient development, a shift in investment flows is needed. The complex architecture of climate finance makes it difficult for Latin American countries to access the necessary resources, international and national, local, public and private, to facilitate Nationally Determined Contributions in action and to foster a sustainable, resilient and inclusive recovery.

Engaging financial system actors is important to strengthen climate action and realise a sustainable, resilient and inclusive recovery strategy in the public, private and civil society sectors. Regulatory frameworks, institutional and management capacities and coordination with the financial sector may be insufficient to adequately harness or mobilise all available or potential resources.

EUROCLIMA+ therefore supports its partner countries in strengthening enabling frameworks, institutional capacities and financing and investment instruments for the achievement of national climate objectives in the region.


EUROCLIMA+ is a programme funded by the European Union and co-financed by the German federal government through the Federal Ministry for Economic Cooperation and Development (BMZ), as well as by the governments of France and Spain. It aims to reduce the impact of climate change and its effects in 18 countries of Latin America and the Caribbean by promoting climate change mitigation and adaptation, resilience and investment.

The Programme is implemented under the synergistic work of seven agencies: the Spanish Agency for International Development Cooperation (AECID), the French Development Agency (AFD), the Economic Commission for Latin America and the Caribbean (ECLAC), Expertise France (EF), the International and Ibero-America Foundation for Administration and Public Policy (FIIAPP), the German Society for International Cooperation (GIZ) GmbH, and the UN Environment Programme.


For more information about EUROCLIMA+, contact Alexandra Cortés: This email address is being protected from spambots. You need JavaScript enabled to view it.

For information about the Climate Finance Line of Action of EUROCLIMA+, write to the emails This email address is being protected from spambots. You need JavaScript enabled to view it. and This email address is being protected from spambots. You need JavaScript enabled to view it.

Euroclima is the European Union's flagship programme on environmental sustainability and climate change with Latin America. It aims to reduce the impact of climate change and its effects in Latin America by promoting climate change mitigation and adaptation through resilience and investment. 
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