Pathways2Resilience (P2R) is an EU-funded programme supporting more than 100 regions and communities to co-design innovative visions for a climate-resilient future. This report introduces the Adaptation Investment Cycle (AIC), a parallel process integrated into the Regional Resilience Journey (RRJ). The AIC consists of six phases and 18 tasks designed to move regions from high-level adaptation visions to a pipeline of bankable actions. This approach ensures that financial and economic constraints are accounted for early, allowing adaptation to be framed as a positive economic investment rather than merely a cost.

Preparing to deliver your investment plan

Before beginning the development of a Climate Resilience Investment Plan (CRIP), regions must define their scope, objectives, and desired outputs. The consortium estimates that approximately 0.75 FTE of effort is required over an 18-month period to develop an Investment Plan alongside a strategy. Effective governance is essential, requiring a mix of technical, financial, and strategic expertise. Key considerations include securing the right level of seniority to champion the work and ensuring the inclusion of groups most affected by climate risks, supporting the principles of just resilience.

Phase 1: Define the regional context and set climate resilience objectives

The aim of this phase is to understand the policy and financing context. Task 1.1 identifies regional development goals and public financial management processes. Task 1.2 involves gathering baseline economic evidence, including the historic costs of extreme weather and the projected costs of inaction. These data help frame the “triple dividend” of adaptation: avoiding future losses, generating economic benefits through activity, and delivering social or environmental co-benefits. Task 1.3 establishes clear adaptation objectives, which provide a framework to appraise options in later stages.

Phase 2: Addressing strategic financing barriers

Regions must understand their potential to diversify and scale financing. Task 2.1 involves mapping existing sources, such as national grants or European Commission programmes like LIFE. Task 2.2 identifies strategic barriers, which may include a lack of credit ratings, limited institutional capacity, or the absence of a green financing framework. In Task 2.3, regions implement an action plan to address these barriers, such as lobbying for new taxing powers or seeking technical assistance to improve the bankability of projects.

Phase 3: Develop pathways and investment packages

This phase focuses on prioritising adaptation options and sequencing them into short, medium, and long-term pathways. Options are categorised based on their economic rationale, such as no-regret measures, climate-smart design for long-lived infrastructure, or early action to support future decisions. Task 3.3 groups these activities into investment packages. Costing methodologies are explored, including bottom-up activity-based costing and the use of adaptation “markups” on existing infrastructure budgets.

Phase 4: Economic appraisal and finance matchmaking

Phase 4 assesses the economic and financial performance of investment packages. Task 4.1 identifies societal, fiscal, and financial benefits, such as reduced health service costs or increased property values. Task 4.2 involves detailed appraisal using metrics like Cost-Benefit Ratios, Net Present Value (NPV), and Internal Rate of Return (IRR). Matchmaking in Task 4.3 investigates the role of public and private finance, using a decision-tree approach to determine which actions are suitable for private sector delivery and where strategic public funding is needed to de-risk projects.

Phase 5: Develop and structure bankable investments

This optional phase aims to improve the bankability of near-term actions. Task 5.1 defines business models using a modified Business Model Canvas that captures economic, social, and environmental value. Task 5.2 involves financial structuring, mapping the “capital stack” of upfront funding and ongoing revenue flows. Task 5.3 develops commercial delivery plans, covering procurement strategies, legal forms, and risk allocation between public and private partners.

Phase 6: Develop monitoring, evaluation and learning framework

The final phase establishes a system to track progress and assess the effectiveness of financing. Task 6.1 identifies Key Performance Indicators (KPIs) to monitor financial flows and enabling conditions. Task 6.2 focuses on reporting requirements for externally financed projects, such as complying with the ICMA Green Bond Principles or the EU Taxonomy on Sustainable Finance. Finally, Task 6.3 facilitates a structured learning and reflection session to identify gaps in competencies and improve future iterations of the Investment Plan.

Compiling, approving and publishing your investment plan

The completed CRIP brings together all inputs into a single coherent document. This plan is often a prerequisite for accessing funding platforms like the Mission Cities Capital Hub or InvestEU. Regions should seek formal political sign-off to ensure senior-level commitment to the implementation of the project pipeline and the package of actions to improve the regional enabling environment for finance.