This report examines the role of concessional capital in accelerating "first-of-a-kind" (FOAK) transactions within the nature-based solutions sector. It categorizes the risks associated with FOAK nature-based carbon projects into three types: business model risk, execution risk, and country risk, each accompanied by specific mitigation strategies. To transition from pilot projects to scalable, repeatable initiatives, the report identifies key funding areas that require attention, such as feasibility studies to establish the business case and concessional capital to mitigate risks in specialized nature funds.

Additionally, the report discusses the necessity of subsidies and guarantees, noting that while they are important, they are ultimately insufficient for mobilizing capital. It emphasizes that accelerating capital flows requires practitioners who can effectively address transaction costs and reduce information asymmetries.

CrossBoundary Quarterly: Blended Finance

CrossBoundary