Climate finance remains one of the most critical levers for turning Nationally Determined Contributions (NDCs) into measurable decarbonisation outcomes. In its latest report From grants to guarantees: how the Mitigation Action Facility’s financial mechanisms transform NDC ambition into climate action, the Mitigation Action Facility showcases how tailored financial instruments – from catalytic grants to risk-reducing guarantees – are mobilising private capital and accelerating climate action across key economic sectors.
The report analyses 43 projects supported by the Mitigation Action Facility, with a total commitment of EUR 682 million and an average leverage ratio of 8.3x on completed initiatives, demonstrating strong private sector mobilisation. Through blended finance approaches that pair Technical Cooperation (TC) with Financial Cooperation (FC), the Mitigation Action Facility is supporting countries implement NDC targets in the priority sectors of energy, industry, and transport – which together account for the lion’s share of global greenhouse gas emissions.
In the following, we highlight three illustrative case studies from the report, showcasing how tailored financial mechanisms translate climate ambition into concrete action across these sectors.
Energy: Cooling down emissions, heating up investment – How concessional loans drove Thailand’s green Refrigeration and Air-Conditioning transformation
The challenge: Thailand’s RAC sector, one of the world’s largest, was a major contributor to fast-rising F-gas emissions, with emissions increasing by 137% annually between 2001 and 2004. Clean alternatives using natural refrigerants were virtually absent due to regulatory and safety concerns, lack of awareness, and neither demand nor supply of green cooling products.
The response: To address these barriers, the Thai Refrigerator and Air Conditioning (Thai RAC) project adopted a multi-instrument approach:
- TA to reform safety regulations and raise awareness
- Targeted grants for R&D, testing infrastructure, and training centres
- Concessional loans to de-risk early investment in production and market roll-out
The strategy: During the design stage, the project engaged closely with manufacturers, government agencies, and the Electricity Generating Authority of Thailand (EGAT) to align interests and ensure broad ownership. This close coordination was complemented by wide outreach and targeted market stimulation, with EGAT launching transparent open calls to select project recipients. Clear loan conditionality ensured that financial benefits were passed on to end consumers, for example through discounted payment terms or credit card financing. Tailored support measures, including Covid-19 resilience loans, helped firms enter the market and remain operational during periods of economic shock. In parallel, grant financing strengthened training and testing infrastructure, contributing to long-term capacity development and the mainstreaming of green cooling solutions.
The results: Within five years, concessional financing enabled a systemic shift:
- EUR 143 million in total private investment mobilised
- Green cooling market emerged in a previously stagnant sector
- Eight manufacturers (market share over 20 %) received production support
- New market channels enabled through partnerships between EGAT, manufacturers, and commercial banks
- Thailand positioned itself as a global leader in climate-friendly cooling technologies
Industry: Scaling industrial transformation – Brazil’s public leadership
Brazil’s approach to promoting industrial energy efficiency (EE) demonstrates how strong government leadership can translate pilot success into systemic change. The PotencializEE project, with EUR 17 million Mitigation Action Facility funding, illustrates how targeted public investment, combined with national policy alignment and institutional coordination, can unlock large-scale private investment and mainstream EE in industrial development.
“The government is a key facilitator in tackling climate change. Brazil has ambitious commitments under the Paris Agreement and is taking effective and efficient measures to boost its climate ambition. The PotencializEE programme is an example and a call to action for other countries to support us. Industrial decarbonisation requires different ministries in developing key interconnected and feasible policies.”
– Gustavo Fontenele, General-Coordinator of the Department of Decarbonisation and Green Finance of Ministry for Development, Industry, Commerce and Services, Government of Brazil
In total, the project mobilised more than EUR 51.9 million in public co-financing – from national, state, and international sources – to support audits, credit lines, and de-risking instruments, which are expected to unlock at least EUR 90 million of private investment in EE measures. The success of the pilot also informed the Ministry of Mines and Energy’s (MME) decision to initiate a regulatory impact assessment (RIA) for a national policy on thermal energy efficiency. PotencializEE continues to provide technical input to this process, ensuring that future regulation is grounded in tested, real-world approaches.
Transport: Enabling green mobility in Cabo Verde – How smart incentives and public-private partnerships accelerate EV adoption beyond the project’s lifetime
The challenge: Cabo Verde’s ambition to reach carbon neutrality by 2050 requires transforming its transport sector, which remains heavily dependent on fossil fuels. Despite high renewable energy potential, the uptake of electric vehicles (EVs) was limited due to high upfront costs, inadequate infrastructure, and limited market confidence. A systemic shift required enabling conditions, strategic incentives, and strong partnerships.
The response: The ProMEC project set the foundation for Cabo Verde’s electric mobility transition by tackling policy, market, and capacity barriers simultaneously. It introduced a transparent EV rebate programme for private consumers, companies, and public institutions, partnered with a private operator to roll out public charging infrastructure across all inhabited islands, and built up local technical expertise. The rebate scheme reduced upfront costs for vehicles and private chargers, while requiring local procurement – strengthening confidence in domestic car dealerships and improving service availability. A concession agreement with TECV, a private subsidiary of renewable energy provider Águas Ponta Preta, enabled the deployment and independent expansion of more than 50 public charging stations, beyond the project’s original scope. Municipalities like Santa Cruz and São Miguel adopted EVs in public ƽeets, and training centres like CERMI and CEFPV upskilled local workers for EV maintenance and charging infrastructure deployment. A national communication campaign reinforced consumer trust and public buy-in.
The results: Price subsidies and TA, including infrastructure grants:
- Mobilised strong private sector participation, with approx. 48% of rebate requests coming from private actors (as of July 2025)
- Facilitated independent expansion of public charging stations (now more than 50) by a private concessionaire
- Triggered new EV market offerings, with dealerships importing a wider range of EVs in response to demand
- Created a skilled local workforce through training programmes
- Strengthened trust and demand through coordinated communication and transparency
Driving systemic change across sectors
Across all priority sectors, the Mitigation Action Facility’s blended finance model helps unlock larger investment pools by addressing financial and regulatory barriers that have historically slowed private sector engagement. By pairing grants, concessional loans, and guarantees with hands-on technical support, Mitigation Action Facility projects are not just funding isolated interventions — they’re building scalable financial mechanisms that catalyse sector-wide decarbonisation.
As global climate ambition rises with updated NDCs and long-term strategies, innovative climate finance solutions like those pioneered by the Mitigation Action Facility are proving essential for turning pledges into projects, and projects into measurable climate impact.
For the full set of case studies and additional project examples, access the complete report here.
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