Innovative approaches to accessing and scaling all sources of adaptation finance in SIDS and LDCs: a compendium of promising case studies

This compendium presents innovative, country-led approaches to scaling adaptation finance for disaster risk reduction in Small Island Developing States (SIDS) and least developed countries (LDCs), addressing persistent gaps in access to climate finance. It examines how governments, institutions and communities are mobilising diverse financial instruments to strengthen resilience against climate-related hazards, including droughts, floods and storms. Designed for policymakers, funders and practitioners, the report draws on four case studies to illustrate how locally led adaptation, blended finance, insurance solutions and subnational financing mechanisms can support risk-informed development and reduce vulnerability.

The report identifies key lessons for improving access to and scaling of adaptation finance, emphasising the need for country-led, programmatic approaches and stronger integration with public financial systems. It recommends expanding risk-sharing instruments such as guarantees and blended finance, strengthening direct and local access through sustained capacity support, and mobilising domestic capital via innovative tools like green bonds and insurance schemes. The findings also highlight the importance of cross-ministerial coordination, long-term technical capacity and community engagement to ensure that financing mechanisms deliver sustained disaster risk reduction outcomes and reach the most vulnerable populations.