Financing Climate Adaptation and Mitigation in Rural Areas of Developing Countries
"In order to determine how USAID assistance may help overcome barriers to financing these types of projects, this report addresses the following questions:
- What types of financing mechanisms can be used to fund projects with climate benefits?
- What are the barriers and opportunities associated with using these mechanisms?
- Which types of climate projects are suitable candidates for which types of financing?
- How can USAID help overcome financing barriers and promote greater investment in climate projects in rural areas of developing countries?
Recognizing that it may also be possible to build upon or complement the work of other International Financial Institutions (IFIs), a summary of existing activities is included as Appendix I. Given the multitude of foreign assistance projects and the evolving nature of this work, the Appendix is by no means comprehensive. However, it may be useful as a reference tool in program planning. The following sections describe the principles and assumptions that guide our analysis of financing opportunities, review the carbon and non-carbon financing mechanisms that are available (with particular attention to the barriers and opportunities associated with the use of these mechanisms, and identify possible program areas that USAID could explore to enable the implementation of projects that produce climate change benefits."