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Climate change is a pressing and complex global issue that requires immediate action. Governments and public budgets are strained from COVID-19 recovery efforts, making it difficult to address climate risks and meet the goals of the Paris Agreement. Private sector participation is crucial to bridging the funding gap and advancing sustainable infrastructure development.
PPPs are one way to bring in private investment to infrastructure in developing countries. They offer a well-informed and balanced risk allocation between public and private stakeholders, provide long-term visibility and stability through contractual agreements and compensate for climate change uncertainty by offering contractual predictability.
The following toolkits provide a set of practical tools to integrate climate mitigation and adaptation into PPP advisory work and project structuring. It includes an umbrella toolkit for multi-sector use and 5 sector-specific toolkits. The toolkits help identify climate risks and opportunities and facilitate private sector involvement in low-carbon and resilient infrastructure projects for emerging markets and developing economies.
Umbrella Toolkit
The need for action to create a greener future and overcome the triple crises of debt sustainability, climate change, and the pandemic is urgent. Governments' financial constraints present opportunities and challenges to involve the private sector in finding innovative solutions and financing to achieve the goals of the Paris Agreement. Public-private partnerships (PPPs) play a crucial role in mobilizing private sector expertise and investment to bridge the infrastructure gap. However, climate change introduces uncertainty, making it difficult to integrate it into PPP frameworks, which require predictability to attract investment. This toolkit aims to address this challenge by incorporating a climate lens into PPP advisory work and structuring. Well-structured PPPs can enhance climate resilience, offering solutions for both mitigation and adaptation challenges. By allocating risks effectively between partners and providing long-term visibility and stability, PPPs compensate for the uncertainty of climate change through contractual predictability.
The Water toolkit provides a range of tools to address key climate-related aspects in project planning. It incorporates climate considerations in project selection, identifies risks, and evaluates climate effects on project economics. It utilizes project data and existing climate resources to develop project-specific considerations for further evaluation.
The toolkit consists of five modules: Module 1 focuses on aligning projects with international agreements and policies. Module 2 assesses greenhouse gas emissions and suggests mitigation solutions. Module 3 evaluates climate risks and proposes adaptation strategies. Module 4 guides economic appraisals considering climate factors. Module 5 suggests key performance indicators for contractual compliance with climate objectives.
The ICT toolkit covers risk identification, climate considerations in project selection, and climate effects on project economics. The toolkit gradually develops project-specific considerations for further evaluation and understanding of advisory service needs. Consisting of five modules, it helps assess project alignment with climate policies, provides a simplified methodology for assessing greenhouse gas emissions, offers guidance on documenting climate risks and adaptation measures, estimates the impact of climate considerations on project costs and benefits, and suggests key performance indicators for climate objectives in ICT projects.
The hydropower toolkit helps address major climate-related aspects in projects, such as risk identification, incorporating climate considerations in project selection, and assessing climate effects on project economics. It utilizes project data, climate-related resources, and tools from the World Bank Group and international organizations. The toolkit aims to develop a project-specific collection of considerations for further evaluation during the implementation phases of the Umbrella Toolkit. It consists of five modules: project alignment with climate policies, climate risk assessment and adaptation planning, greenhouse gas emissions assessment and climate mitigation strategies, climate considerations in project economics and finances, and key performance indicators for climate-resilient hydropower.
