Financial mechanism is one of the key interventions of the projects of the Mitigation Action Facility and a crucial part of their financial cooperation (FC) components. Financial mechanisms aim to address and overcome financial barriers that hinder investments in carbon-neutral technologies and/or practices. The following instruments employed through financial mechanisms can be highlighted: – Risk mitigation instruments that address high (perceived) risk (e.g. guarantees); – Financing & refinancing instruments that supply additional long-term capital (e.g. loans); – Grant instruments that address gaps in the financial viability.
