Understanding ‘bankability’ and Unlocking Climate Finance for Climate Compatible Development

As a result of the complex and stringent requirements, countries have spent a significant amount of resources on various aspects of climate finance readiness. However, this has been focused mainly on building the necessary institutional, technical and fiduciary capacities associated with the four pillars of climate finance (planning, access, delivery and monitoring, reporting and verification), as opposed to understanding how to make climate projects bankable. What is missing in terms of readiness is a nuanced understanding of the term bankability and what it means for various funders. This paper seeks to begin to explore these aspects, to provide some useful insight into the key determinants of bankability. It is hoped that further understanding bankability, and the key factors that go into developing a bankable project within the context of the different funds, will improve the success rate of proposals, but also limit the waste in significant costs and resources associated with developing unsuccessful proposals.