During 2022 we faced multiple old and new crises that have negative impacts for the global climate and development goals. These interlinked crises have increased uncertainty and multiplied the already massive challenges that exist in climate change, poverty reduction and the global economy.

Some positive developments came, however, with an increased focus on adaptation in the context of COP27. The year ended with the UN’s landmark biodiversity agreement which will put 30% of the planet and 30% of degraded ecosystems under protection by the end of the current decade. This agreement also included proposals for increasing biodiversity finance, something which NDF follows closely.

These challenges, and the urgency to tackle them, make NDF more well-placed than ever to build a better future.

Climate finance has reached record high levels but is still falling short of needs. The availability of financing – especially concessional financing – is scarce, and particularly the adaptation finance gap widens every year. More volume in adaptation finance is needed, and it has to be targeted predictably, patiently and flexibly to those needing it most – particularly lower income countries and especially the Small Island Developing States, and through structures that can multiply its impact.

To reach positive development results and impact, we need to continue to improve the quality of project designs and adapt monitoring and evaluation systems, to better know what works, what does not work and why. This will enable us to address the root causes and build our work on quality data and evidence for targeted climate action. Effective monitoring, evaluation and learning is also a critical agenda for NDF.

The public sector currently faces big financing needs to address some of the most critical and costly impacts of climate change. It has for a long time been unrealistic to assume that the public sector could absorb the financing needs related to climate and development. Catalytic blended finance models are important for attracting private sector and institutional investors. While such models have been developed and presented as promising solutions, the processes require further development, facilitation and support from financiers like NDF.

The results for this report have been collected by applying our Results Management Framework (RMF). In this report we detail our contribution to building resilient, sustainable and equitable societies in the least developed countries and countries in fragile situations.

Challenges remain and now is a critical time to bring all stakeholders to the table. NDF is well-equipped with a focused mandate and offering to meet the greater resources that the climate and development agenda needs urgently to cope with the mounting challenges.

I would like to sincerely thank our partners, Board of Directors and the dedicated NDF staff for making this happen. Together we have positively contributed to the lives of the most vulnerable people around the world. This gives reason for optimism, which we can now show in concrete results.