As debt notes to commercial banks, Climate Adaptation Notes (CAN) aim to increase the flow of funding into water and wastewater adaptation projects by combining construction financing and post-construction refinancing phases into a single instrument.

Instrument category

Debt financing

Implementation status

Low - limited evidence available

Enabling conditions and success factors
  • Private capital needs to be available in local debt capital markets.
  • Adequate projects are needed.
Instrument benefits
  • Combining short-term construction financing from commercial banks with long-term post-construction refinancing allows long-term funders to leverage the commercial banks’ construction project expertise, mitigating project performance risk and enabling investment in sectors previously seen as too risky by institutional investors.
  • This new approach also reduces the time and cost involved in financing such projects.
  • Approach enables climate adaptation projects to tap into institutional savings pools.
Challenges and risks to implementation
  • Lack of adequate pipeline.
  • New and innovative instrument that requires socialisation to be used.
Case studies

Climate adaptation notes for infrastructure-related adaptation projects in Sub-Saharan Africa

View case study

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