Financing a Resilient Future

Research Question

How can governments and international partners finance resilient public services without increasing debt fragility, concealing future obligations, or treating financial commitments as delivered public benefit?

Publication: Working Paper
Published: September 23, 2026
Pillar: One World Development
Evidence base: 12 primary sources
Review status: Foundation synthesis; not peer reviewed

Executive synthesis

A resilient future needs resources that remain usable through shocks and support services after construction ends. The financing question is therefore both distributive and operational: who receives protection, who pays over time, and who carries losses when forecasts fail? This working paper proposes choosing instruments after identifying the public need, its revenue characteristics, and the country’s fiscal position. Grants, concessional debt, restructuring, guarantees, and insurance solve different problems. Their labels do not establish affordability or public value.

Recent international evidence shows a substantial adaptation-finance gap, a continuing role for loans in reported climate finance, and the need to account for obligations beyond conventional public debt. The recommended approach combines a costed service plan, a transparent register of liabilities, explicit support for vulnerable populations, and a portfolio of funding and risk instruments. It rejects a universal financing formula. No funding commitment, investor agreement, country allocation, or project return is claimed here; the implementation proposals are a framework for public appraisal and subsequent testing.

Findings

What the evidence supports.

Source markers link findings to the evidence below.

01

Adaptation needs and current finance measure different things

UNEP’s 2025 Adaptation Gap Report estimates developing-country annual adaptation needs in 2035 at US$310 billion using modelled costs and US$365 billion using extrapolated country plans. It reports US$26 billion in international public adaptation flows in 2023. These estimates describe a large mismatch, but projected needs and observed international flows differ in year and scope. They are not a project financing plan. The practical inference is to publish locally costed priorities and financing gaps, including domestic resources, rather than assign a share of a global headline to a jurisdiction without evidence. ^[1]

02

Higher reported finance does not imply an equivalent grant transfer

OECD’s May 2026 assessment reports US$136.7 billion provided and mobilised by developed countries for climate action in developing countries in 2024. Public finance was US$101.6 billion; 67% of that public component was loans and 29% grants, with rounding and a smaller equity component. The scope includes attributed multilateral flows and mobilised private finance, not all climate investment. These totals cannot be read as cash grants received by households or as adaptation finance alone. Country appraisal still needs repayment terms, currency exposure, disbursement timing, and a clear account of additional public benefit. ^{[2] [3]}

03

International goals are not appropriations or disbursements

COP29 established a goal of at least US$300 billion annually by 2035, with developed countries taking the lead, and called for efforts to scale finance from all sources to at least US$1.3 trillion annually by 2035. UNFCCC’s account of COP30 records a call to triple adaptation finance by 2035. These commitments matter for cooperation, but they do not show that an individual programme has secured resources. A credible financing register should distinguish political goals, announced pledges, signed agreements, budget authority, disbursements, and verified expenditure without adding overlapping categories together. ^{[4] [5]}

04

Grant eligibility and debt capacity should influence instrument choice

IDA’s published framework links the terms of assistance for eligible countries to debt-distress assessments, illustrating that concessional finance is differentiated by risk and eligibility. It does not mean every vulnerable country or project qualifies for a grant. Our proposed allocation principle is to prioritize grants for essential public goods with weak direct revenue and for populations least able to absorb repayment burdens, while assessing concessional borrowing against realistic fiscal capacity. A socially valuable project can improve welfare without generating the government cash flow required to service its debt. ^[6]

05

A swap cannot substitute for necessary debt restructuring

The joint IMF–World Bank debt-swap framework distinguishes potential liability-management benefits from restoration of debt sustainability. It requires attention to transaction costs, spending commitments, opportunity costs, and institutional capacity. The Global Sovereign Debt Roundtable likewise warns against using swaps where broader restructuring is needed. A proposed debt-for-nature or development swap should therefore be compared with direct grants, concessional refinancing, and appropriate debt treatment. Announced nominal debt-service savings alone are insufficient: the appraisal should show present-value effects, fees, new obligations, and whether donor support could produce greater benefit through a simpler instrument. ^{[7] [8]}

06

Liquidity protection helps recovery but does not erase debt

The World Bank describes climate-resilient debt clauses for eligible small-state borrowers that can defer principal and interest payments for up to two years after covered events. Deferral changes the payment calendar; it should not be presented as cancellation. The Bank’s disaster-finance guidance also supports layering instruments: reserves for some losses, contingent credit for others, and risk transfer for larger events. These functions complement prevention. Country design must test triggers, payout timing, future debt service, exclusions, and the possibility that serious local damage does not activate a particular contract. ^{[9] [10]}

07

Private participation does not make public obligations disappear

The IMF–World Bank PPP Fiscal Risk Assessment Model examines who controls and pays for an asset, additional government support, contractual risk allocation, and effects on public finances. Its rationale includes the danger that partnerships are used to bypass budget constraints. A government guarantee, minimum-revenue promise, or termination obligation may become expensive when revenues fall. Private delivery can bring capability, but its proposed benefits should be compared with a credible public-delivery alternative. Publish the expected annual payment profile and stress scenarios, including simultaneous losses across several projects. ^[11]

08

Infrastructure governance determines whether financing becomes resilience

The IMF’s Climate-PIMA framework connects climate objectives to the institutions that plan, allocate, and implement public investment. This supports examining the investment process before choosing a financial product. Our proposed appraisal extends to design, construction, staffing, energy, maintenance, replacement, and eventual retirement, with hazard and demand scenarios. A low upfront price can create a costly long-term service obligation. Conversely, maintenance or a smaller adaptive intervention may outperform a new asset. Those are options to compare locally, not a claim that any one technology or ownership model always wins. ^[12]

Institutional Implications

What this changes in practice.

These are design implications drawn from the synthesis, not claims that one institutional model will fit every jurisdiction.

01

Start with a public service and an affordability envelope

Define the service level, beneficiaries, distribution of risks, and alternative ways to meet the need before seeking finance. Show which costs require public subsidy and which, if any, can reasonably be met by users. Tariff revenue assumptions must be tested against household affordability and collection capacity. An investor-ready proposal that cannot sustain equitable access should return to design.

02

Publish a consolidated fiscal view

Bring loans, guarantees, public-enterprise exposures, partnership payments, and disaster obligations into one review, while keeping their different legal and accounting characteristics visible. Assess currency and refinancing risk alongside interest rates. The proposed register should identify who authorizes each exposure and how it is monitored. Keep highly uncertain obligations visible as scenarios instead of hiding them behind a falsely precise estimate.

03

Protect grant resources for needs that markets struggle to serve

Allocate scarce grants transparently using vulnerability, debt constraints, distributional benefit, and the absence of feasible repayment revenue. Support project preparation, local technical capacity, and recurring service essentials where the funding mandate permits. Counterargument: grants can be volatile and fragmented. Respond with predictable multi-year agreements and shared public reporting, while avoiding a promise of grant availability that donors have not made.

04

Require a public-value case for blended finance

Any subsidy or guarantee proposed to attract private capital should state the market failure, the minimum support needed, who receives the benefit, and the exit conditions. Compare subsidizing this transaction with directly funding the service. Mobilized capital is an intermediate result; additional access, reliability, emissions reduction, or avoided harm must be evaluated separately. Publish negative outcomes and renegotiations as well as successful closures.

05

Give local delivery capacity a funded place

Complex approval and reporting requirements can absorb scarce administrative time. A proposed financing compact should pay for procurement, engineering review, data quality, maintenance planning, and community engagement. Simplification should preserve audit and remedy. Communities should be able to contest displacement, inaccessible services, or unfair tariffs, with clearly assigned institutional responsibility rather than a complaint route that ends at the project contractor.

04 / Policy options

Choices and their tradeoffs.

Foundation analysis of the options. Evidence informs the choices; it does not remove their costs or uncertainty.

1

Grant and concessional public investment

Proposed option: combine grants with affordable long-term borrowing where the national debt outlook and project cash requirements permit. This fits many public-service investments but requires dependable operating finance and capable procurement. Compare alternative mixes using common cash-flow and distributional assumptions, and verify current eligibility and terms with the relevant institution before treating support as available. ^{[6] [12]}

2

Debt treatment followed by a credible investment programme

Proposed option: where debt is unsustainable, assess comprehensive treatment with the responsible authorities and creditors before adding complex thematic instruments. Where debt remains sustainable, a swap or refinancing may be considered if its net benefits and public commitments are transparent. The choice is jurisdiction-specific and must include macroeconomic, creditor, and implementation consequences. ^{[7] [8]}

3

Layered disaster finance linked to delivery systems

Proposed option: combine reserves, contingent liquidity, and carefully selected insurance or risk transfer with a predefined response plan. This may make funds available sooner, but access to money will not by itself repair roads or reach households. Compare total expected cost, payout adequacy, basis risk, and the protection delivered to groups with the least fallback resources. ^{[10] [9]}

05 / Implementation

From a proposal to a working system.

A proposed sequence for local adaptation. These stages are not a claim of funded or completed Foundation activity.

1 · Diagnose
Build the service and fiscal baseline
The finance ministry, service authority, and affected communities would assemble the asset inventory, hazard exposure, access gaps, debt schedule, guarantees, and operating costs. Record data uncertainty and identify responsible owners. Establish an independent appraisal function proportionate to project scale; smaller community works should not face the same paperwork as a major concession.
2 · Appraise
Compare a small set of feasible portfolios
Develop a common baseline, a maintenance-first option, and appropriate capital alternatives. Evaluate grants, concessional debt, and private participation against the same service outcomes and fiscal scenarios. Include delayed completion, lower revenue, currency depreciation, rising repair costs, and repeated disasters. Disclose the assumptions that would reverse the preferred option, alongside distributional and environmental safeguards.
3 · Contract and deliver
Make obligations and funding traceable
Before commitment, identify budget authority for construction and operation, measurable contract milestones, audit access, remedy, and contingency responsibilities. Publish financing terms and performance information with justified confidentiality redactions. Separate procurement completion, financial close, fund disbursement, functioning service, and public outcomes; each needs its own evidence.
4 · Review
Reassess affordability and public benefit
Compare actual lifecycle spending and service performance with the appraisal at scheduled intervals and after major shocks. Update contingent liabilities when conditions change. Expand only when delivery and public value justify it; redesign or stop underperforming components while preserving essential services. Retain the original assumptions so later evaluations cannot silently rewrite the baseline.

06 / Measurement

What progress would mean.

Proposed measures for evaluation. Baselines, thresholds and reporting responsibilities must be agreed before implementation.

Net usable finance

Funds actually received and available for eligible public purposes, reported with instrument, currency, fees, repayment obligations, and restrictions.

Interpretation: Do not add pledges, commitments, disbursements, and private mobilisation as if they were separate new resources.

Lifetime fiscal burden

Annual and present-value public payments over the asset or programme life, with operating, maintenance, replacement, and contingent obligations shown separately.

Interpretation: Publish the discount rate and sensitivity results; a single present value hides timing and distribution.

Time to usable disaster support

Elapsed time from an eligible event to funds reaching the responsible delivery agency and then affected people or functioning services.

Interpretation: Fast sovereign payout is not evidence that vulnerable households received timely assistance.

Equitable service reliability

Access, downtime, safety, and affordability for intended beneficiaries, disaggregated by relevant geography and social barriers.

Interpretation: Infrastructure delivered or money spent are outputs; they do not demonstrate sustained public benefit.

Public subsidy and additional benefit

Explicit and estimated contingent public support per verified additional unit of service or protection, compared with feasible alternatives.

Interpretation: Private investment attributed to a public instrument does not by itself prove causal additionality or value for money.

Research Programme

What the foundation should test next.

Apply a common appraisal to three contrasting public-service investments. Publish lifecycle cash flows and fiscal stress scenarios for grant, concessional-loan, and partnership options, identify the assumptions driving the ranking, and invite independent challenge before selecting a financing route.
Retrospectively examine a completed debt-swap transaction using disclosed contracts and audited spending. Recalculate present-value benefits after all fees and commitments, compare with direct support alternatives, and report which missing terms prevent a reliable conclusion.
Simulate a severe disaster against a proposed reserve, contingent-credit, insurance, and debt-clause package. Trace trigger conditions, liquidity gaps, and later repayments, then test whether the operational response system can deliver support on the required timetable.
Pilot a public finance-to-service register for a limited programme. Reconcile announced, committed, disbursed, and spent amounts with procurement and service records; evaluate audit burden, public usability, and whether complaints lead to documented corrective action.

Method & Limits

How to read this brief.

Method

This working paper is a targeted primary-source synthesis completed on 23 September 2026. Searches covered UNEP adaptation estimates, the OECD May 2026 climate-finance report and methods, UNFCCC financing outcomes, and IMF–World Bank guidance on debt, public investment, partnerships, and disaster finance. Sources were inspected for reference years, accounting scope, instrument mechanics, and limitations. Reported amounts are retained within their original categories and are not combined into a new global estimate. The proposed decision framework is analytical synthesis; no country debt-sustainability model, investment appraisal, or causal evaluation was independently conducted.

Limitations

Future adaptation needs depend on climate, development, and cost assumptions. International finance datasets differ in attribution, instrument treatment, reporting periods, and coverage; funding volumes cannot establish effectiveness. IDA eligibility and instrument terms require country-specific verification at decision time, and the cited grant-framework page was last updated in 2024. Institutional guidance identifies useful controls but does not prove universal superiority of a financing model. Country legal powers, creditor arrangements, administrative capacity, and democratic priorities must shape application. This paper does not recommend a particular security, transaction, or borrowing commitment.

Unresolved evidence

Consistent public data joining finance terms and disbursements to the long-run reliability, affordability, and distribution of the services financed.
Transparent fees, guarantees, spending commitments, and counterfactual alternatives sufficient to establish the net value of individual debt swaps.
Comparable estimates of correlated fiscal risks across public enterprises, guarantees, partnerships, and repeated climate shocks.
Independent evidence that particular blended-finance subsidies add public benefit beyond what simpler public funding or policy changes could achieve.

Source Record

Read the official sources.

[1]

United Nations Environment Programme · 29 October 2025 · Accessed 2026-09-23

Adaptation Gap Report 2025: Running on Empty

2035 annual needs are modelled or extrapolated; observed international public adaptation flows refer to 2023.
[2]

OECD · 21 May 2026 · Accessed 2026-09-23

Climate Finance Provided and Mobilised by Developed Countries in 2013–2024: Key trends

2024 total, public component, and instrument shares; loans and grants are distinct from the private-finance mobilisation component.
[3]

OECD · 21 May 2026 · Accessed 2026-09-23

Climate Finance Provided and Mobilised by Developed Countries in 2013–2024: Data and methods

Defines attribution, exclusions, reporting lags, and measurement of mobilised private finance. Companion chapter to the same report, not independent corroboration.
[4]

UNFCCC · Adopted 24 November 2024; published 27 March 2025 · Accessed 2026-09-23

Decision 1/CMA.6: New collective quantified goal on climate finance

Paragraphs 7–8, page 3, state the 2035 goals and developed-country leadership. Adopted goals are not disbursement evidence.
[5]

UNFCCC · Q4 2025 reporting period; accessed 23 September 2026 · Accessed 2026-09-23

UN Climate Change Quarterly Update: Q4 2025

Adaptation section records the COP30 call to triple adaptation finance by 2035; no delivered funding amount is inferred.
[6]

World Bank International Development Association · Last updated 23 September 2024; accessed 23 September 2026 · Accessed 2026-09-23

Debt Sustainability & Grants

Shows debt-risk-based differentiation and eligibility limits. Current country terms must be verified; no grant entitlement is asserted.
[7]

International Monetary Fund and World Bank · 5 August 2024 · Accessed 2026-09-23

Debt for Development Swaps: An Approach Framework

Full policy paper inspected, especially debt sustainability, net financial gains, transaction costs, and opportunity costs.
[8]

Global Sovereign Debt Roundtable · 23 April 2025 · Accessed 2026-09-23

Compendium of GSDR Common Understanding on Technical Issues

Page 5 distinguishes swaps from needed restructuring and discusses clear triggers for climate-resilient debt clauses.
[9]

World Bank Group · Undated institutional brief; accessed 23 September 2026 · Accessed 2026-09-23

Transforming Finance to Meet Today’s Development Needs

Describes payment deferral under climate-resilient debt clauses for eligible small-state borrowers; not debt cancellation.
[10]

World Bank Group · Undated programme overview; accessed 23 September 2026 · Accessed 2026-09-23

Disaster Risk Finance and Insurance

Risk-layering rationale for combining financial instruments; insurance cannot cover every disaster loss.
[11]

International Monetary Fund and World Bank · Undated technical overview; accessed 23 September 2026 · Accessed 2026-09-23

Public–Private Partnerships and the PPP Fiscal Risk Assessment Model

Structured assessment of fiscal costs, government support, risk allocation, cash flows, and sensitivity analysis.
[12]

International Monetary Fund · 22 December 2021 · Accessed 2026-09-23

Strengthening Infrastructure Governance for Climate-Responsive Public Investment

Introduces Climate-PIMA as an institutional assessment of climate-responsive public investment planning, allocation, and implementation.

Suggested citation: True Tomorrow Foundation (2026). Financing a Resilient Future. Working Paper. Reviewed September 23, 2026.

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