He said ODA flows in 2026 are set to decrease by at least 20% from 2025.
There was some good news: climate finance overall is still growing, but more than half of that is from private sources.
Allergic to adaptation?
He said that, historically, private finance has been allergic to adaptation. The majority of publicly available finance is in the form of commercial loans. Only US$65 billion was tagged as adaptation finance - mostly loans and minimal amounts flowing to Least Developed Countries and Small Island Developing States.
These figures come against the backdrop of ever-increasing adaptation needs.
He noted that finance quality is just as important as quantity, and this will become a more pressing issue for finance.
Questions to the panel
The session featured a panel of speakers from funding organisations. We used a "reverse panel" approach to generate the discussion: we asked participants to collectively decide the questions to ask the panellists. Here's a selection:
Question: How can we make sure we are not reinventing the wheel and learning from past initiatives to ensure funding responds to stakeholders’ priorities?
Arghya Singha Roy from the Asian Development Bank said it was time to move away from project-based financing.
He said:
"If you want to make sure money is going more local, but with increased accountability and less burden, we must move away from project-based financing. It doesn't ensure a continuous flow of money.
"If countries have systems to deliver local development, we can build on them and strengthen them to ensure they're delivering on adaptation, while factoring in climate shocks and stresses. There are ways to finance those systems that don't have to be burdensome and are articulated by stakeholders."
Question: What is a meaningful way to engage the private sector and how do we get more private finance to enable LLA?
Anna Heath, Synchronicity Earth responded:
"The challenge is often that foundations will often have mandates for what they fund, and they're limited by these.
"We need more bridging of silos between adaptation and other areas - thinking about how to frame the work in ways that are understandable outside of the adaptation sector, to bring different audiences in."
May Aung wrapped up the session with a few key points:
- We need to focus on strengthening key institutions and not reinventing the wheel. We can do this by strengthening systems that already exist in countries.
- If we want to include co-design in rethinking systems, there needs to be budget support for this.
- We need better programming and flexibility - less onerous M&E requirements, but also allow governments to adapt in their own way.