Introduction

Assessing the quality of climate finance is a complex, frontier topic further complicated by a lack of comprehensive, consistent data. Climate Policy Initiative’s (CPI) work to date has provided a holistic, theoretical framework for understanding the quality of public climate finance, followed by an exploration of the existing indicator base harnessed for assessments of quality at the project, market, and system levels. This discussion paper takes a case-study approach to analyse real-world public climate finance interventions, yielding insights into what constitutes high-quality public climate finance. It spotlights six cases deemed to have transformational potential that span different financing approaches, allowing analysis of the design and delivery dimensions that contribute to high-quality public climate finance. In doing so, it distills lessons and implications for assessing and subsequently improving the quality of public climate finance.

Approach

Case study identification was guided by how public climate finance providers themselves describe interventions with transformational potential. This process generated an initial pool of approximately 100 potential cases. The longlist was first screened against basic eligibility criteria to ensure each case was relevant, researchable, and sufficiently evidenced. These criteria identified interventions with a clear public climate finance component, sufficient climate relevance, and operational maturity. A second screening layer ensured the final sample captured diversity across geography, sector, climate use, provider type, and implementation stage. Each case was then analysed using a structured approach covering the specific mechanism for channelling public climate finance, the value-add of public climate finance, results across project, market, and system levels, and the assessment of intervention design and delivery.

Case Studies

The six selected cases illustrate diverse financial and delivery mechanisms. The United Nations Capital Development Fund’s Local Climate Adaptive Living Facility (LoCAL) pools international public climate finance, with USD 170 mn in committed funds, and channels it to communities via performance-based climate resilience grants. The Forest Governance, Markets and Climate (FGMC) programme, led by the UK Foreign, Commonwealth and Development Office (FCDO), is a bilateral grant-based programme emphasising governance reform, with GBP 500 mn committed for its second phase. The Climate Resilience and Adaptation Finance Technology Transfer Facility (CRAFT) is a growth equity fund managed by the Lightsmith Group, with USD 139.2 million in committed public funds as of 2025. It leverages public finance to de-risk private investment in adaptation and resilience solutions.

The European Bank for Reconstruction and Development (EBRD) Green Cities Programme (GrCP) is a project preparation facility (PPF) sequenced with investment finance, with committed public funds of EUR 7 bn since 2016. IREME Invest is Rwanda’s national green investment facility, combining a PPF with a credit facility, and has committed USD 242 mn. Finally, the Galápagos Debt-for-Nature Conversion in Ecuador restructured USD 1.6 billion of outstanding debt, with USD 741 mn in committed public funds, illustrating how guarantees and political risk insurance can convert sovereign debt refinancing into long-term conservation finance. These cases demonstrate how public climate finance can be used to address specific barriers and support broader system-level change beyond individual project outputs.

Lessons and implications

High-quality public climate finance is necessarily calibrated and additional relative to the specific sectoral, geographical, and climate-use context. Across cases, public finance worked to fill a gap in the market to catalyse further action. The findings suggest that high-quality finance cannot be characterised solely by the financing modality or financial instrument; instead, quality is determined by detailed intervention design and delivery. High-quality interventions will necessarily build an enabling environment for further climate action, creating or facilitating the policies, strategies, and legal frameworks needed to raise ambition. However, these interventions inevitably face trade-offs and limits concerning commercial viability, speed of delivery, and the scale of finance that can realistically be absorbed by local actors.

Current monitoring and evaluation (M&E) systems are relatively well-developed for tracking project-level results, but there is no similarly mature approach for assessing the quality of intervention design and delivery. The report pinpoints key data gaps, noting that publicly available evidence is uneven across providers. It recommends that future work unpack climate finance quality in terms of both quality of design and delivery, and quality of results. The 10-dimension framework provides a flexible approach for assessing design based on provider- and recipient-centric priorities, while the 3-level results framework delineates tangible results at project, market, and system levels. There is a clear need for greater consensus on the key data points that public climate finance providers and recipients should jointly report.

Conclusion

This discussion paper offers a more nuanced discussion of what constitutes high-quality climate finance by applying a two-pronged framework to real-world interventions. The paper calls for greater engagement on what constitutes climate finance quality across public providers, with an emphasis on moving toward consistent and comparable data and reporting mechanisms. It suggests establishing a working group comprising representatives from various public climate finance institutions and recipient entities to develop a shared understanding of quality and dedicated reporting mechanisms. Future scope for this work hinges on convening among providers or engaging bilaterally with individual institutions to facilitate direct access to the mix of qualitative and quantitative data—ex-ante and ex-post—needed for assessment.