Developing an NDC Capital Raising Strategy for Peru

• To achieve the goals of the Paris Agreement, over 65% of the capital investment required to reach net zero by 2050 will need to occur in non-OECD countries
• Achieving Peru’s climate change goals will require substantial investment increases across a range of critical mitigation and adaptation sectors
• A substantial increase in in-flows of international private capital from a range of different sources and climate investment on local capital and debt markets will be needed
• The private sector could play a key role as 70–80% of climate solutions are expected to be more attractive from a risk-return perspective than conventional emissions intensive alternatives by 2030
• However, finance cannot currently flow at the speed and scale required due to both a lack of detailed, concrete and realistic plans for financing NDCs – and a lack of capacity among key public actors to develop and deploy strategies

The project's flagship CRS report supported the scaling up of private climate investment in Peru through:

• Identification and sizing of key investment opportunities, covering all seven sectors in Peru’s NDC (power, transport, industry, buildings, forestry, agriculture, waste and wastewater)
• Assessment of feasible sources of private finance for each investment opportunity, considering both local and international sources of private capital
• Identification of strategies to mobilise additional private capital, setting out the actions that policymakers, investors and corporations can undertake to address current barriers to investment

Additionally, the project has supported MINAM in its capacity to apply the CRS and to develop subsequent plans and actions to implement opportunities presented in the CRS.

Finally, the project included a series of workshops and public-private engagement sessions. These successfully embedded technical knowledge among public and private actors, helping them to understand potential financial sector reforms and other activities needed to promote capital raising for climate action, and therefore help drive climate investment.

This project supported vulnerable populations in two complementary ways.

Firstly, the CSR report increased awareness and understanding of the need to bring in the private sector to support climate investment, to a granularity that identified vulnerable agents that need to be further supported.

Secondly, the project directly supported conversations around NDC investments where GESI counterparts were included, encouraging more reflection and integration of GESI considerations into NDC planning. This meant a focus on vulnerable communities could be incorporated into the discussion.

There is potential for the framework developed by the project to be replicated across other geographies, thus generating positive impact in several ways, including:

• Helping GESI considerations to be systematically included within NDC planning, given the increased understanding of each agent’s roles and needs
• Increasing the understanding of the needs and barriers to spur the development of strategies aimed at minimising barriers faced by vulnerable groups
• Supporting plans and actions from both public and private organization to increasingly acknowledge the importance of climate investments from a GESI perspective, including the co-benefits that these investments can have for women and other vulnerable communities

While tangible changes will take some time to materialise due to the nature of the key project’s output, the CRS report outlines a set of recommendations on strategies to support a range of key actors in scaling up private climate investment in Peru.

For example:

• Investors can use the strategy to better understand climate investment opportunities that exist in Peru, and potential strategies for financing these opportunities
• Policymakers in Peru and globally can use the strategy to identify barriers to private capital and potential strategies to address these barriers, including case studies of where capital has been mobilised
• Investors, international organisations and policymakers can jointly use the strategy to identify opportunities that require blended finance or public and private coordination to unlock capital