Strengthening climate finance policy and institutional capacity across six Asia-Pacific countries

• Mar 27, 2026
• 2 min

Bangladesh, Bhutan, Cambodia, Fiji, Lao PDR, and Nepal face high climate vulnerability due to their reliance on climate-sensitive livelihoods and exposure to extreme weather risks. Despite the availability of global and national frameworks, such as the National Adaptation Plans (NAPs), implementation remains fragmented in these geographies. Policy ecosystems are often weak. Institutional capacity to design and implement inclusive climate finance is limited, and financial systems struggle to translate climate priorities into viable investment pipelines. As a result, adaptation finance flows remain insufficient and misaligned with local needs.

The Inclusive Climate Finance for Vulnerable Communities in the Asia-Pacific (ICCAP) initiative brought together the Stockholm Environment Institute (SEI), the Asia-Pacific Rural and Agricultural Credit Association (APRACA), and Appui au Développement Autonome (ADA) as a multi-country and multi-package program to address these gaps. It sought to catalyze more than EUR 250 million in public and private finance. The project worked to strengthen the pipeline from policy to capital to last-mile delivery, so that funds reach vulnerable communities. The Asia-Pacific Rural and Agricultural Credit Association (APRACA) engaged MSC as an international consultant to provide technical leadership on the policy and institutional backbone of the initiative.

Since 2025, MSC has been supporting national consultants under the ICCAP initiative on policy and regulatory diagnostics, stakeholder engagement, and knowledge synthesis through a four-phase approach:

1. Diagnostics and mapping: Review of policy and regulatory frameworks, identification of gaps, and stakeholder mapping;
2. Benchmarking and design: Synthesis of global best practices and development of country-specific policy recommendations and action plans;
3. Engagement and cocreation: Ongoing policy dialogue, validation of findings, and co-development of solutions with stakeholders;
4. Capacity building and scale: Strengthening of institutional capacity through training, regional exchange, and support for policy adoption and implementation.

Through this approach, MSC supports countries to move from fragmented policy environments toward more coherent, evidence-based, and implementation-ready climate finance systems that can better channel resources to vulnerable communities.

The Asia-Pacific Rural and Agricultural Credit Association (APRACA) and the International Climate Initiative (IKI) commissioned this project.