Climate finance plays a pivotal role in transforming Nationally Determined Contributions (NDCs) into concrete decarbonization outcomes. The Mitigation Action Facility’s latest report, From grants to guarantees: how the Mitigation Action Facility’s financial mechanisms transform NDC ambition into climate action, demonstrates how tailored financial instruments—from catalytic grants to risk-reducing guarantees—are mobilizing private capital and accelerating climate action in key sectors such as energy, industry, and transport. The report analyzes 43 projects, with a total commitment of EUR 682 million and an average leverage ratio of 8.3x on completed initiatives, highlighting the effectiveness of blended finance approaches that combine Technical Cooperation (TC) with Financial Cooperation (FC) to support countries in implementing their NDC targets.
In Thailand, the green Refrigeration and Air-Conditioning (RAC) project illustrates the impact of concessional loans in transforming a previously stagnant market. Thailand’s RAC sector, a significant source of F-gas emissions, faced regulatory, awareness, and market barriers that limited adoption of clean alternatives using natural refrigerants. By combining technical assistance, targeted grants for R&D and training, and concessional loans to de-risk investments, the project engaged manufacturers, government agencies, and the Electricity Generating Authority of Thailand to stimulate market uptake. Within five years, EUR 143 million in private investment was mobilized, eight manufacturers gained significant market share, and Thailand emerged as a global leader in climate-friendly cooling technologies.
Brazil’s PotencializEE project demonstrates how strong public leadership can scale industrial energy efficiency. With EUR 17 million in Mitigation Action Facility funding, the initiative combined targeted public investment, policy alignment, and institutional coordination to unlock large-scale private financing. The program mobilized more than EUR 51.9 million in public co-financing, expected to leverage at least EUR 90 million in private investment, while informing national energy efficiency policy through regulatory impact assessments. The project shows how combining pilot projects with public-sector leadership can mainstream industrial decarbonization.
In Cabo Verde, the ProMEC project illustrates how enabling conditions, smart incentives, and public-private partnerships can accelerate the adoption of electric vehicles (EVs). To overcome high upfront costs and limited infrastructure, the project implemented a transparent rebate program, supported private sector participation in public charging station deployment, and built local technical expertise. These measures resulted in independent expansion of over 50 charging stations, stimulated new EV market offerings, and created a skilled local workforce, supporting the country’s long-term carbon neutrality ambitions.
Across all sectors, the Mitigation Action Facility demonstrates that blended finance mechanisms—pairing grants, concessional loans, and guarantees with technical support—can unlock larger pools of private investment and catalyze systemic decarbonization. By addressing financial, regulatory, and capacity barriers, these projects create scalable, sector-wide impact. As global climate ambition grows, innovative financial instruments are essential for turning NDC pledges into real-world projects and measurable climate outcomes.
