From a financial perspective NAMAs are not very different from any other development project or policy. Even though there are not many tailor-made financing mechanisms specifically for NAMAs, a number of sources are available for financing a NAMA. These depend on locally identified needs (e.g. capacity building, technological and financial support) as well as the availability of domestic sources. A NAMA financial proposal therefore consists usually of a combination of different funding sources and financing instruments.
A set of activities can comprise policies and measures to create an enabling environment and the policy framework with incentives to support private investment flows, the setting up of regulation and effective institutions, the establishment of open and accessible information systems, as well as the development of actual business models to overcome certain barriers and promote low-carbon technologies. Thus, a NAMA brings together financing, technology cooperation, and capacity building. Nevertheless, these activities imply different cost structures and revenue streams.
In order to understand the financial part of a NAMA, the NAMA should be broken down into individual activities and costs and revenues should be associated with each activity, thereby quantifying the financial needs.
To get a clearer picture the NAMA should be assessed with regards to its financial viability (from a micro-economic perspective) and to its socio-economic appropriateness from a societal perspective.
Thereafter the financial flows and different players need to be clarified.
Parts of most transport NAMAs will likely be financed by domestic resources, other parts might be eligible for external funding. In any case it is important to get the views of financing experts right at the beginning of the NAMA process and to get continuous inputs during its development and implementation.
Currently, the financing section of the Handbook “Navigating Transport NAMAs” is being revised.
Climate Finance Process:
In addition to that, the TRANSfer Team intends to advance the discussion around climate finance in the context of sustainable transport with background studies and by facilitating an expert group on transport policy, transport financing and climate financing. The objective of this stream of activities in the TRANSfer project is to contribute to ensuring that climate finance is used for sustainable transport in an effective way to realize the large GHG emission reduction potential in the sector. The fundamental question is how to shift investment from conventional, unsustainable transport toward low-carbon, sustainable mobility.