Engaging Private Sector and Mobilizing Private Finance through Mitigation Actions in Developing Countries

Over the past several years, there has been a significant shift in the recognition of the role of the private sector in financing low carbon transition in developing countries. While the volume and variety of climatefinancing resources are growing, more work is required on the part of the public sector to engage private sector and catalyze private financing at scale. Low carbon development strategies and national mitigation actions can become the vehicles for the redirection of investment through creation of policy frameworks that remove barriers and create incentives for low carbon investment. This chapter provides an overview of the key issues in relation to engaging the private sector in mitigation actions in developing countries. It discusses the importance of the private sector for the low carbon transition, the various types of private sector players and their motivations vis-à-vis climate change mitigation, as well as barriers and opportunities for private investment. It further identifies opportunities for engaging private sector in mitigation actions and highlights some of the recent practical experiences with the implementation of the nationally appropriate mitigation actions (NAMAs). The analysis of practical experience shows that there is great interest in engaging the private sector in the development and implementation of mitigation actions. Yet it is still to become a primary focus in practice in some developing countries, particularly those where mitigation actions are at earlier stages.