Background

Small Island Developing States (SIDS) face distinctive challenges in turning climate priorities into financed and implementable projects. Limited institutional capacity, high transaction costs, complex approval processes and delays in disbursement can slow progress, even when projects respond directly to national climate and development priorities.

This interactive session will take place as part of a three-day regional peer-to-peer forum on NDC implementation readiness for SIDS, hosted by the Republic of Mauritius with support from the NDC Partnership, GIZ, the UNFCCC Regional Collaboration Centres (RCCs) and the Center for Access to Climate Finance. The forum will bring together government representatives and international technical experts to exchange experiences, explore tailored solutions and help accelerate NDC implementation in the Western Indian Ocean region.

Led by the UNFCCC RCCs, the session will examine the full life cycle of a climate finance deal - from institutional anchoring and investment prioritization to project preparation, approval, disbursement, implementation and monitoring. Drawing on real transactions and experiences from SIDS, it will focus on the practical obstacles that can cause deals to stall and the approaches that can help move them forward.

Objectives

The session aimed to:

• Build a practical understanding of how climate finance deals for SIDS are structured, approved and implemented.

• Identify common bottlenecks affecting project preparation, approval, disbursement and delivery.

• Share lessons, good practices and recommendations drawn from real transactions.

• Explore ways to simplify, standardize or aggregate transactions and strengthen countries' capacity to access and use climate finance.

• Generate practical inputs to inform follow-up support from the UNFCCC RCCs and partners.

Audience

The session was designed for government representatives from SIDS, including officials involved in climate policy, finance, planning and project implementation, as well as climate finance practitioners, development partners and technical experts supporting NDC implementation.

Outcomes

The Regional Forum for Practitioners on Advancing NDC Implementation Readiness for SIDS, hosted by the Government of Mauritius, brought together government representatives, climate finance practitioners, development partners and international organisations to exchange practical experiences on accelerating NDC implementation and improving access to climate finance. The forum served as a peer-learning platform focused on strengthening institutional readiness, investment planning, and climate finance mobilisation for Small Island Developing States. It was supported by the NDC Partnership, GIZ, the UNFCCC Regional Collaboration Centres (RCCs), and the Center for Access to Climate Finance. 

Key focus areas

Discussions centred on:

• NDC implementation readiness and institutional arrangements.
• Alignment of NDCs, NAPs and LT-LEDS.
• Climate finance mobilisation and investment planning.
• Public-private partnerships and blended finance.
• Innovative financing instruments, including debt-for-climate swaps, green and blue bonds.
• Article 6 opportunities and carbon markets.
• Gender and social inclusion, blue economy initiatives, sustainable transport, and green jobs. 

RCC contribution

A major contribution from the UNFCCC RCC network was the co-design and facilitation of a practitioner skill-sharing session titled“The Anatomy of a Climate Finance Deal for SIDS.” The session was jointly led by Minky Groenewald (RCC EASA) and Mona Ayoub (RCC MENA and South Asia). Using an interactive World Café format, participants explored the full lifecycle of climate finance transactions, from concept development to implementation and monitoring.

The session featured contributions from institutions including Uganda’s Ministry of Finance, UNDP, the Commonwealth Climate Finance Access Hub, Agence Française de Développement (AFD) and UNEP, alongside case studies from the Commonwealth Climate Finance Access Hub and Fiji’s Climate Finance Division. 

Main findings

The discussions highlighted several recurring challenges faced by SIDS:

• Limited project preparation capacity and technical expertise.
• Fragmented institutional arrangements and weak coordination mechanisms.
• Complex and lengthy climate fund approval and disbursement processes.
• Insufficient integration of climate priorities into national fiscal and investment planning. 

Participants stressed that successful NDC implementation depends not only on access to finance but also on strong institutions, clear mandates, effective coordination structures, and active engagement of Ministries of Finance and domestic financial institutions. 

Strategic insights

Three overarching lessons emerged:

1. Institutional arrangements matter. Countries with strong governance structures and finance ministry engagement are better positioned to secure and manage climate investments.
2. Project preparation remains a critical bottleneck. Many climate priorities fail to attract funding because they are not developed into investment-ready projects. 
3. Ministries of Finance play a central role. Integrating climate priorities into fiscal planning and national investment strategies is essential for scaling implementation.