UNIDO Climate Adaptation and Industrial Resilience Forum 2026

Yes, now it's on. Good morning, everyone. Welcome back. Just a very quick short announcement. We'll be starting about 15 minutes late today as we still have some colleagues getting through security, so please bear with us as we start at 9:30 sharp. Thank you.

Thank you.

Hello again. Good morning. Good morning.

Good morning.

Can I please call everyone to attention? If you could please wrap up your discussions and have a seat as we're getting ready to get started. All right. I see that we're all ready. So welcome back, everyone. Great to see some familiar faces. Some of you who've been with us already since yesterday. Also some new faces. So for the new faces, welcome to Vienna. Welcome to the UNIDO Climate Adaptation and Industrial Resilience Forum 2026, the inaugural forum marking the 60th anniversary of UNIDO. So yesterday, I think we managed to break the ice a little. So I hope today we're a bit more comfortable, a bit more settled in. We had super rich, insightful discussions, technical discussions around the policies, the strategies, and the communities that are needed to make climate adaptation and resilience a reality for all. So today we're getting our hands a little dirty. So hopefully we can take the discussions from yesterday and put them to work today. So you can expect a few breakout sessions. So during your registration, I believe that you have all chosen the breakout sessions of your choice. But of course, you are not married to these choices. You are still free to choose other breakout sessions if you like. And this will be after the coffee break. So for the, for the new delegates joining us today, happy to introduce myself. I'm Hilda Leswani, your MC for today, founder and CEO of WE Bloom, a Swiss association that works with industry, policy, and media. And it is my absolute pleasure to be joining UNIDO today to bring some of these discussions to life. So, without further ado, happy to welcome to the stage our first speaker who's going to open up the day for us, Ms. Fatou Haidara, DDG and Managing Director, Directorate of Global Partnerships and External Relations at UNIDO. Please join me in giving her a round of applause.

Thank you. Good morning and welcome again. I'm very pleased to see you all in this room, and indeed I share what was, what was just said. Yesterday's discussions were very fruitful and something came out clearly. This is that climate change is no longer a distant environmental concern. It's a defining economic and industrial reality. Indeed, yesterday across regions, sectors, It was emphasized how climate impacts are reshaping production systems, supply chains, infrastructure, and livelihoods. We also heard a strong message: adaptation can no longer be treated as a series of isolated responses to risk. It must become an integral part of development and industrial policies. At UNIDO, we share all of these perspectives. Our climate strategy is a testament of this collective recognition. We see climate action also as a catalyst to strengthen industrial systems, making them more resilient, more sustainable and more competitive. This is particularly important for countries most exposed to climate impacts. We all know that least developed countries and small island development states are facing acute structural vulnerabilities and that middle-income countries are navigating complex transitions, balancing industrial growth with rising climate risks and evolving investment realities. We at UNIDO are working to ensure that adaptation is a force that strengthens development and industrialization. Through our strong partnership with the GEF, GCF, and AF, we are supporting countries to translate climate priorities into concrete action. However, as we heard yesterday also, the challenge is not only technical. It is systemic. This is precisely what today's discussions are about. So, ladies and gentlemen, the focus of the day is how adaptation can support deeper transformation. This requires thinking how industrial systems evolve, how resilience is reflected in value chains and productive systems and how policy and investment decisions respond to climate realities. Actually, our program follows a simple logic: from priorities to pathways to programs to partnerships. In simple terms, the question before us today is how we make adaptation transformative, how we ensure it shapes industrial development, strengthen competitiveness, and create new opportunities for people and economies. This is also a question of responsibility. Ladies and gentlemen, this forum is taking us to a common goal: clearer pathways, stronger partnerships to help countries move from fragmented adaptation efforts toward resilient, sustainable, and competitive industrial development. This is why we are all here today. And I thank you for your engagement and commitment.

Thank you so much for those words, Ms. Haidara. So how do we make adaptation transformative? That is the question of the day. Thank you for posing it. And I love this word transformative because it calls us to be ambitious and bold. And go beyond business as usual, as Ambassador Barboza very aptly also asked us to do yesterday. I hope you all keep that with you and keep that in mind as you go forward today. I have been told to make a very brief announcement before we move on to the next session. On the 7th floor, there is an exhibition, Locally Led Adaptation, in Action, which is near the coffee area on 7th floor— on the 7th floor. So please, if you have time during the coffee break, which will be at 10, or during the lunch break, go up to the 7th floor and check it out. I've been told that it's really, really insightful, and you can see directly who are those brave communities that are leading climate adaptation on the ground. Right, moving swiftly ahead onto our first session of the day. We are going to start off with understanding adaptation priorities and needs. So this discussion is super, super important to really lay down the ground of an informed discussion later on within your pathways. So can I please call to the stage moderator, Ms. Alaa Metellitza, Senior Advisor, Office of the Managing Director, Directorate of Technical Cooperation and Sustainable Industrial Development, UNIDO. And the speakers, Mr. Barboza, Special Envoy and Ambassador-at-Large, Ms. Donna Lagdameo, Manager, Vulnerable Subdivision Adaptation Division for the UNFCCC Secretariat, And last but not least, Mr. German Velásquez, who will be joining us online, Senior Technical Advisor on Climate Finance to the United Nations. Please join me in giving them a round of applause.

Thank you.

How do I do? Very good morning, ladies and gentlemen, colleagues, friends, and welcome to this morning dialogue. I'm super excited to have an outstanding panel here with me. Please welcome together with me Ambassador Barbosa, who was recently selected as the chair of this developed countries group in the UNFCCC process. I miss Donna Lagmadeo, who is leading the vulnerability subdivision in the UNFCCC Secretariat, where I also used to work for a very long time, and Jerry Velásquez, who used to work as a director of the mitigation adaptation division in the Green Climate Fund and currently is providing cutting-edge advice to GCF, multilateral development banks, governments, and other stakeholders. I'm sure our discussions with this outstanding panel would be really, really interesting. Today, we are celebrating the major achievements which happened for the last 3 years, from COP28 to COP30, in the adaptation discussions at UNFCCC. We witnessed the adoption of United Arab Emirates' Global Resilience Framework. We witnessed the personalization of the Global Goal on Adaptation, which is enshrined in Article 7 of the Paris Agreement. We now even have a set of indicators which would help us measure adaptation action for the first time, and of course, increased commitments on adaptation finance. Is really achievements which we can all be proud of. And among discussions in negotiating groups, a very new term emerged: transformational adaptation, in addition to traditional incremental adaptation. This term is not fully defined yet in the process, and this is where we can all contribute. At UNIDO, we talk a lot about industry transformation But are we ready for transformational adaptation? Do we understand what it is? Are we brave enough to take an action which is transformative? Today, during Pathway discussions, starting this morning and later in the afternoon, we can all contribute to defining this concept and to putting it into operation. To put you in a mood for generating crazy ideas, to having your light bulb moments and to bringing the transformation adaptation and other types of adaptation forward in industrial processes and value chains. I will put a number of thought-provoking questions, maybe some provocative questions, and the very first question goes to the audience. So please raise your hand if your country, your organization, or your enterprise already adopted an adaptation measure which could be considered transformational, not just incremental small step. Please, frontrunners, raise your hands.

Okay.

How many do we see? One hand.

From Lesotho.

From Lesotho. This is fantastic. UNIDO will approach you after this forum to get your guidance of what transformative measures we can replicate and do in other countries. Thank you very much. We will contact you. This is really a signal. this transformational adaptation is still a buzzword and not a reality, because only Lesotho is a frontrunner who leads the way, and others still will need to follow. So now I will proceed with questions to our panel also. Donna, when we talk about— look at Third round of nationally determined contributions, when we look at the new national adaptation plans submitted to the NFCCC, are we really seeing countries reimagining their manufacturing, reinventing their supply chains to ensure that industries would be not only carbon neutral but also climate resilient? Do we see this actually happening, or we still see very small incremental steps such as backup generators or elevated facilities or maybe better drainage systems. What can we do to ensure that this new adaptation architecture actually catalyzes transformative action and makes our industries look about transformational adaptation and put it into action? Thank you.

Thank you so much. And again, good morning to everyone. And Nice to be back this morning. I like your question, your starting question. Are we brave enough, ladies and gentlemen? It's a question for everyone. I think this is also a good starting point in thinking about how brave are we in really realizing the essence of transformation. On your question, if we are seeing climate-proofing or really transformation in the current NDCs and NAPs, I think one of the things we're really seeing is that a lot of the approaches are similar. A lot of our approaches are the usual. And you will feel that I'm not going to answer directly if they are transformational or just climate-proofing, because I'm part of the Secretariat and I cannot do value judgments. But based on our observations, We are seeing the same approaches over and over again. If the impact of these are really transformative in the lives of communities and peoples is something that we will see during the next global stocktake that will happen in two years' time. However, if we really want to be transformational, I have some ideas for the group to consider. We need to really. Use the architecture and the policies developed at the international and the global level and ask a different question and how we can do things differently. For example, our opening speaker mentioned about collective recognition. This essence of collectivism, if applied in the in the industry sector can actually give us a different kind of way of working, seeing things as an ecosystem and not as isolated and standalone living systems. If we take this worldview from— we actually gathered this from Indigenous peoples and local communities— we will be able to redesign the ecosystem of industries. And that's one step to transformation, to really change the approach from relationality to— from extractive thinking is another way to transform. What am I trying to say? If we learned from Indigenous peoples and local communities, for example, look at their values. They don't see nature as a resource, but they are part of nature. If we view this kind of system and really adopt a different mindset, that's transformation. That's a different way of thinking and different approaches. If industrial zones aligned with watershed management are aligned with watershed management and not be built against them, that is transformation. That is a different concrete approach. Another is short-termism versus long-termism. So if we view transformation as something that will affect 7 generations, and this comes again from indigenous value of the 7th generation principle, that is transformation. We will be able to look at the industry and the approaches differently. This was mentioned several times yesterday, co-creation, co-development. And co-governed. This is critical, ladies and gentlemen. Transformation needs different thinking on who we work with and how we work with them. Right now, local communities, Indigenous peoples, local stakeholders are seen as stakeholders, not as knowledge holders. So we feel that they are not part of the landscape. If we bring them in and we actually co-design with them, and they will help us rethink of what is an acceptable risk. They will be able to help us adapt approaches that have proven successful for generations. This, my friends, are our transformational approaches. Last but not least, a transformational approach for me and from the many case stories that we are gathering in the Secretariat on tangible and empirical data is this forward-thinking narrative. We adapt today for risks in the future. That forward-thinking, I think one speaker yesterday talked about foresight. Foresight approaches are not yet a normal way of working. But these are ways that we can actually apply to move from just ticking the box of climate-proofing to really having a different change of approach and will probably lead us to something that is more sustainable and more long-term. Thank you.

Thank you, Donna, in particular about reminding us that the transformational adaptation is a new paradigm shift. starts with transformation, change of our mindset. This is the key starting point. The LDCs Group was instrumental in making sure that this major adaptation breakthrough took place over the last 3 years. LDCs Group, together with EOSIS, made sure that adaptation is not lost initiating process, but has equal footing now with mitigation. But now the issue is what this new adaptation frameworks, new adaptation decisions actually mean for LDCs. We know that transformation already happening in industries, in manufacturing in LDCs. It's forced by changing climate, by extreme weather events. Informal manufacturers, entrepreneurs, small enterprises already adapting and reinventing survival strategies which we don't even see in national adaptation plans. So can you tell us what actually needs to be done to ensure that all these adaptation frameworks do not impose new requirements, new burden on LDCs, but help LDCs transform their industries, transform their societies, communities, On a path which would truly lead to resilience in your vulnerable countries?

Thank you very much, madam. I think this is a very challenging question for me, but anyway, this is also engaging all participants to provide your input as well. LDC point of view, I think adaptation, it's already taking place, with or without legal framework. For the government, of course, they are very much dealing with planning processes. From UNFCCC processes, top-down, framework, it's given by decisions of Conference of Parties through National Adaptation Plans. Additionally, as LDCs, we have a National Adaptation Program of Actions, NAPAs, and then we have NDCs, National Communications. We capture, we capture all related issues to adaptation. But then small enterprises, small-scale and medium-scale industries, it's almost not possible for capturing their adaptation measures that they are taking now, and their actions is faster than The planning processes, right? As you all remember, the NAPs were decided at COP16 in Mexico back to 2010, and then there are 44 LDCs, least developed countries, assisted by Least Developed Countries Expert Group. I was the chair before I, I come to take this position of LDC chair. We provided technical assistance to all those countries to speed up the process of formulation and implementation of the NAPs. But up to date, how many of them they submitted? That's 22 out of 44 LDC countries who have been submitting their respective NAPs. So it's very slowed-down process.

Why?

One, we are depending on outsider financial support because at the same decision, multilateral development banks, multilateral financial entities, institutions including GFD, adaptation fund, are requested to provide financial support. So that's engagement, but that's also Some sort of bringing something that is slowing down the process, but then the industrial, let's say entities, small enterprises, medium enterprises, because of their economic interests, I think they've done their great job. They've tried their best to adapt to the impact of climate change because climate change impacts happening now. Not for tomorrow. So in terms of defending economic interests, some enterprises from our side, they've already adapted without the top-down structural mandates given to them to adapt. But then how could we address this? We need to have bottom-up approach as well, where we can also consider the existing adaptation measures acted by small-sized enterprises, industries, and combined with top-down adaptation planning processes. And of course, From small-sized enterprises, they also need to provide financial support for themselves. That's quick reaction towards the impact that they are facing, rather than waiting until financial support will be given by multilateral financial entities like GFDCEF and so on and so forth. LDCF is there. But it's very difficult to access, colleagues, because of what? Indirect access modalities to access the fund. So that's why slowing down the process of planning at national level to incorporate all the needs of industrial entities are quite difficult. So I think the small size or medium-sized industrial enterprises, they have done their job. And then what we need to do will be combination of bottom-up and also top-down processes so that we can try our resilience building just in the middle between bottom-up and top-down. That will be good. But then, of course, for LDCs, it's very difficult because even though we have some small size and medium size industrial bodies with us, but they also have limited financial capacities to do so. So that's why slowing process towards top-down will be also taking place. That's why 44 countries, only 22 countries are submitting their NAPs. That's from my side, but thank you very much.

Thank you, Ambassador, for opening our eyes to the realities of LDCs, which we are now sitting in Vienna may not fully appreciate, but it's so important that somebody coming from this developed country, from This region, understanding needs and priorities, can tell us, you need to join others. Please stand up and help other 22 LDCs finalize their national adaptation plans and ensure that industry is also there. Thank you very much for this. Now, let us talk money, not only adaptation finance, but transformation finance. Jerry, you are still here.

Yes.

You sit on the intersection between the Green Climate Fund, multilateral development banks, government finance. You have witnessed evolution of climate finance from really first row seat, so you can give us insights into this. When we look at $1.3 trillion pathway, which has been discussed in the UNFCCC process led by presidencies. We understand that this amount cannot be covered by public finance, by official development assistance. It has to come from private sector, from insurance companies, from pension funds, from philanthropies, other sources, from multitude of various finance sources required for this pathway. But we also see that currently most of industrial adaptation projects are still financed through public finance, grant-based, and deal mostly with really small incremental actions rather than true transformational measures and actions. So there are 3 interrelated questions to you. What would it take to make private industrial capital see adaptation not as a corporate social responsibility, but their next major investment decision? How can we ensure that mobilization of private finance is additional and not replacement for public finance, which is really required for adaptation? If you can give us one concrete example of maybe a project, program, or initiative you know of private capital-driven adaptation action, if possible, transformative adaptation action.

Thank you very much. Can you hear me? Just trying to confirm you can hear me.

Very well.

Okay, thank you. I'm so happy to be in the same panel as Ambassador Ndona. So pleased to be here and good morning to everybody. I think you've asked a question that is quite complicated. There are maybe 2 interlinked issues there. One, why is adaptation really not that strong from the line of sight from our long-term strategies, the NDCs, the NAPs, to actual climate finance? Why is that? Why is there what we call a missing middle? Why is the NAP and the NDCs not converting into actual investment plans on adaptation? So this is, I think, the first question. And then on top of it, why is it that we cannot get private sector into adaptation, which is another bigger problem? But if we don't solve the first, we cannot solve the second. So I think these questions are interlinked, but maybe let's look at the context of both adaptation. Why do we have such a high ambition on adaptation, but we don't have A lot of adaptation projects in climate finance? And number 2, why is it that we cannot entice private sector in adaptation? So let's look at this aspect. Number 1, private sector. It's not that they don't want to invest in this. They're always looking for investment, but they need long-term signals. One is predictability. NDC 3 gives that signal, long-term predictability. But how about national policies? The least thing that they want is stranded assets. They invest in something that, you know, 10 years from now is completely changed. You change your policy and they have assets that are not their intention. So what they want is some sense of predictability, and public sector can provide that. That's the role of private sector— public sector. Number 2 is bankability. I've mentioned why is it that there is this missing middle from the NDC and the NAPs to actual climate finance and adaptation. Why is it? And there is a simple problem. We don't— it's so easy to make mitigation projects bankable. It's so difficult to make adaptation projects bankable. If you look, there are a lot of needs. The expression of needs is long and clear, but to structure adaptation projects into bankable and investable projects is so difficult. Look at the NDC, for example. Most countries' NDCs Health is number 5 priority. But look at climate finance. How much climate finance on health? 0.0-something percent. And on blue economy, it's very, very small. So if you look at all of the adaptation sectors, there is a problem of pipeline and bankability on adaptation. And if you talk about the private sector, if we want private sector, we need scale. How do we bring to scale adaptation projects? Most of the adaptation projects we see are very small. How do we structure them so that they are at scale, which is the problem that we face? And for that reason, you mentioned that a lot of our financing is only on grants. If we want to move to scale and we want to entice private sector, we have to also blend what you call investment finance with risk finance. And maybe that brings me to the last issue, which is adaptation. Because of the lack of bankability and clarity of that and also lack of predictability, long-term predictability, there's a lot of risk. And that's the reason private sector is kind of looking and thinking hard whether they should invest. So I think public and private, there's a role for public, and that's the reason that there's a role for private. Private does not replace, it complements. Private sector is there to make profit, which is also good. Public sector is there to make sure that the deal is not just profitable but affordable. Because if we only focus on profit, the least capable will be left behind. So that means that we have to balance also affordability and profitability so that it is inclusive. These deals are inclusive. I'll give you one example. Water. Water is one of those key adaptation issues that we struggle Even if you look anywhere, the kind of investment on water, the multilateral development banks, bilateral and so on, you cannot see at scale because it's so difficult to structure. There are so many problems, there are so many risks. However, there's an example. When I was at GCF, we structured one of the largest water projects ever, $1.3 billion. This is with South Africa, and it is, you know, faced with climate change on water, 17% deficit on water. What is the goal? Usually you supply more water. In there, what they did is they actually reduced the demand by recycling water instead of throwing water. Why don't— because wastewater you throw away. Why don't we create a new asset class, you know, something that private sector can invest in? So recycle the water, create an asset class. But there's so much risks in this. So that's the role of the public sector, make sure that the risks— and it could be on, in this case, credit-related, could be exchange rate, could be on all kinds of things. But the public sector also made sure that this deal is affordable, because what you don't want is to leave the poorest behind who cannot afford the tariffs. So this deal is actually the largest climate adaptation project on water yet. We need to make this a standard, because to reach $1.3 trillion, this approach, blended finance, needs to be scaled up. Thank you.

Thank you, Jerry. One word, bankability, was mentioned many times, and it's definitely a key when you talk about mobilizing finance from private sector. But now, question to you, Ambassador, about the brutal truth of bankability. Those most vulnerable communities and value chains will unfortunately never meet traditional bankability criteria and requirements. Maybe we should stop pretending that everything can be bankable and instead consider consider creating maybe a new grant-based transformation fund which could support transformation adaptation in industries, enterprises, value chains in least developed countries and other vulnerable countries and regions?

Thank you very much for this very, also, difficult question for me. Bankable means there should be some sort of criteria to be met. Bankable means something that is closely related to fiduciary issues, and it's common issue, and we all know that. But then the small size enterprises also small industrial size, sometimes it's very difficult for them to, you know, to fit into that criteria. So yes, we could manage that, we could design that carefully, but I could tell you that firstly, the problem is Real conventional bankability frameworks built around collateral, formal financial records— you all know about that from GFTCF— and also predictable cash flows and credit history systemically exclude small-scale processors. Informal manufacturers, like I mentioned before, and also rural enterprises, it's very difficult for them to come up with proposal, bankable proposal, they could say. It's very difficult for them. Yes, that actors are central to food system, we know about that. And the local industry and also climate resilience people, they are also providing job creation for our people. Forcing them into the traditional bankable or banking models often delays or even blocking adaptation investment. Yesterday, I said adaptation investment is quite a business approach, but since we are discussing about industry, investment will be there, but for rural communities, adaptation implementation. So it will be blocking adaptation implementation at grassroots level if we stick to the traditional bankable mechanism. Secondly, not everything should be forced into bankability itself. If we do this, and then of course it will be very difficult for the most vulnerable countries to come up with their actions. So trying to de-risk everything until it fits commercial finance logic can also distort priorities and also overlook social resilience benefits that don't generate short-term financial returns. So adaptation is almost not possible to get benefit out of this.

Approach to include them in the system so we can move together. And thirdly, parallel financing systems are quite necessary. I think that's very important, but it should be considered as complementarity issue. Yesterday I also mentioned about that. So adaptation capacity building and technology shift will be also quite critical for having a financial system that is considered as complementarity. So let's say grant-based transformation fund for the most vulnerable communities and also segments if we are seeking enterprises, and also blended financing to gradually grow in the concessional and also commercial capital if it's quite appropriately available. That will be also quite viable, we could say. And also local financial intermediaries. In Timor-Leste, let's say, we have a small— not small— microfinancing that is also helping our rural communities to access directly without any bankable proposal. And to use this fund for increasing their resilience in the area of adaptation. So that's also transformative issues. And fourthly, key principle would be fit for purpose, madam. That's the key. So fit for purpose financing is very, very key. So not all climate adaptation should generate commercial returns, Some investments are about systemic resilience and also equity, and very importantly, those require public or philanthropy capitals. Public means grant-based for LDCs, including LDC communities and also small-sized entrepreneurs from LDC. Respective countries. I think that's very key for us. A real shift isn't choosing between bankability and also grant. It is, I think, acknowledging the resilience that is also public good and also financing system that should reflect the issues that we face at grassroots level. I think that will be really, really good. So not to get benefits, but to increase our common vulnerability issues and reduce climate risk. Thank you very much.

Thank you, Ambassador. Thank you for your insight that not everything can be bankable and Transformation and systemic changes can also come through other financial instruments, through other channels, through other approaches, which we should not forget. Donna, operating entities of the NFCC financial mechanism very much prefer well-tested, replicable, proven incremental approaches, and such projects mostly get funded. However, transformation is really messy. It's unpredictable. It's uncertain. It can fail. But we still want to support it. So would it make sense for the Green Climate Fund, Adaptation Fund, others, maybe to create dedicated windows which would have appetite for risk for such transformational approaches and transformational technologies? Such projects may fail, but if they succeed, they can fundamentally change the way how we see the resilience. What do you think about such approach?

Fully supportive of that. And I think it would be— it's high time for us to fund discoveries and to test new ideas. If you want to— if we want leaps, let's finance discovery and thinking without the box. I think that that's the the, the call I would like to make, um, in, in this session. The current windows, as you said, um, favors, you know, things that have been working for the past decades. But these working approaches did not start from perfection. They were also tried and tested through time. And I think one of the things we can try in this window that allows for discovery and testing is, you know, this— let's try initiatives that bring different knowledge systems together. What am I saying? Well, let's not just anchor on one type of science. There are other types of science. You have the indigenous science. You have the traditional science, all those things. So, Bringing these different perspectives for risk assessment can be part of the discovery finance, transformational finance window, if I may just say that. Then it can also be designed to experiment. I'm really happy that Jerry is here because in my previous life, through Jerry's support and other colleagues in GCF, we actually was able to test a new idea that is helping the humanitarian sector greatly at this point. The allowing the concept of forecast-based financing, anticipatory action, that was not the way of working of humanitarian agencies 1, 2 decades ago. But because of— because there are some funding groups that actually allow us to experiment, make mistakes, tweak as we go along, and also customize based on the different needs and realities on the ground. Right now, what, 20 years later, this approach is already normal. It is already part of the daily activities that actually are saving people's lives and livelihoods. So, so this, ladies and gentlemen, is really good. Imagine a window that allows for local sharing, local knowledge sharing, and combined with strategic and high-tech approaches from industries. Imagine a window that has— that allows us to share learnings, both positive and negative, and learn from them and adapt as we go. As Jerry said, adaptation is not easy because you're really talking about on-the-ground lives and livelihoods. And it's not easy to experiment on things. But something will give. If we don't fund adaptation, either lives or livelihoods will give, or we succeed and have resilient approaches. So I think it's really high time to have this opportunity to test new ideas and really signal that we are ready and that we can move a step closer to transformative thinking, transformative approaches, and maybe transformational action along the way. Thank you.

Thank you. And maybe LDCs group can take this on board in the coming June session of subsidiary bodies, just a hint. On the same note of finance for innovation, Jerry, transformational adaptation technologies are most likely too early stage for multilateral development banks and too capital-intensive for venture capital. So apart from patent Transformation windows within the operated entities of the UNFCCC finance mechanism. Where is this funding for new transformational innovation technologies for adaptation can come within the $1.3 trillion pathway? Where should we look for them?

Thank you very much. Definitely, the money will have to come from existing sources. The question is, how do we innovate and how do we get them to invest in the areas we want? How do we get private sector? How do we invest in adaptation? When I was still in the GCF, I joined the discussions with countries when the IMF would deploy the Resilient Sustainability Facility, which is a fund, very concessional amount of money that they provide to countries when they in fact promise climate outcomes. It's one of those financing available for the IMF. So it was a roundtable of multilateral development banks. And the discussion has always been, how do we support the country, whose priority is usually adaptation? And the most surprising thing for me that I learned from those conversations is that everybody would say we need to develop the adaptation pipeline because we don't have bankable projects that are investable. This is the only thing country and country again we would discuss, and they would always say— and these are the MDBs, these are large multilateral development banks. And the question is, we don't have the flexible money to actually develop the pipeline. We don't. I think this is a fantastic opportunity for an entity like UNIDO because this is a role that UNIDO can take. You are mainly looking at innovation and you do focus on pipeline generation from all of this and also enabling that pipeline. So I think this is one. How do we develop industrial adaptation pipelines. Then the actual funds that are there can be unlocked. The second is that maybe we are focusing too much on investment capital when maybe we should be looking more at risk capital, because that's the only way we could leverage private sector. If we want private sector, it is not investment capital, it is risk capital. We have to use capital to actually remove risk. And in this context, there are 3 ways that we could look at capital. First is we could lower the cost of capital, so either directly as grants, and there's a limit of how much grants we could use, and if it's a loan, we could lower the interest rate. So that's basically lower the cost of capital, make it cheaper. The second is subordination. There's a lot of risks with capital because what you're looking at here is potential losses. So if you have finance that would take that cushion, first loss cushion, so there is a lot more confidence to actually take debt. The second is tenor. Tenor is a particularly important issue because usually there's a misalignment between the debt and your investment life of whatever you're investing in, and therefore you don't have the flexibility to pay back the debt in the way that you want. So if you could then blend these 3, Cost of capital, subordination, and tenor. And institutions like GCF provide you with that flexibility. The problem usually is that many partners do not capitalize on this. They use what they are used to, not to innovate on finance. And this is— when I was in GCF, I always tell them, why do you always give us pari passu when you could innovate on what you ask from GCF? Why not ask from GCF things that you cannot do. Don't ask what you can do, because it's very flexible. So things that you can do. UNIDO, for example, and I know UNIDO is exploring, for example, an adaptation technology fund that is incentivizing without distorting the market, you know, borrowers that actually hit their climate targets, those that pay back on time, those that produce the climate impacts, adaptation mitigation, get a discount on their payment of interest. So without distorting the initial market, you can innovate, you can use existing finance, you can leverage. So I think the point is not where are we going to get new money, how do we unlock the existing money? And we've always thought about different types of innovation, but maybe it's time we look at financial innovation.

Thank you very much, Jerry. It was really, really interesting. Discussions about money, of course, always very exciting, but this discussion, I think, was not only exciting but really fruitful, very, very enriching. I have now so many ideas in my head, and I'm already thinking, how can we implement it through the UNIDO climate change strategy? And I hope my colleagues working for climate innovation and adaptation and the relation with various financial institutions, took extensive notes and already planning how exactly we are going to work on this jointly. Yes, I see people are nodding. Later today, we will split into groups to talk about pathways, which would be about innovation once again, locally-led adaptation, and climate intelligence. However, I believe that these are not 3 separate pathways, but ingredients of the same— indispensable ingredients of the same cooking for meaningful adaptation, particularly transformative adaptation action or measure. So I want to test this hypothesis with you about interrelation between these 3 themes rather than separate pathways. I would like every panelist to give me just one concrete example, which can be a real example or your imagination, of how transformational industrial adaptation would look like if we will genuinely integrate innovation, locally led thinking, and climate intelligence from the very start of cooking this excellent dish. I will start with Donna.

I'm not yet ready, so maybe you start with Adao.

Okay.

I can start. Look, for LDCs, we need to have climate smart data. To help us to come up with bankable proposal. You know what, one of the criteria from multilateral financial entities is having climate rationale, right? Without climate rationale, they will disagree with the proposal. Because we could differentiate development issues and climate adaptation issues. So we need to put real climate change impacts and vulnerabilities issues inside the funding proposal. But then the LDCs, we have limited capacity to produce data, right? And it's very difficult to come up with a bankable proposal. That's why we get less access to financial resources available for each of LDC. It's capped under the Adaptation Fund. Per country has only allocated cap, and of course, LDCF. But then, coming back to us as LDCs, we have limited human resources to produce data, credible data, climate data, to support our proposal and also support our planning processes, because decision-making process should be based on the best available science. At the same time, we don't have that. So I think it should be linking to financial availability and how to get financial support to implement, to take actions. That's, that's critically important. So we need to have data in place. To have data, we need to have a real warning system to collect the climate data. We need to have a climate modeling and projection for our respective countries as LDCs. And also, if it's possible, we can also touch upon sectoral climate change projection, let's say for agriculture and food security, because for LDCs, agriculture and food security is very important. And then afterwards, we can easily get bilateral support, multilateral support, and also regional support as well to get the fund to take actions. So I think that's very important to have some capacity building in place for LDCs to formulate bankable proposal, to produce climate data, and also how to interpret climate data into the planning processes. And then once we receive the fund from bilateral, multilateral, and also regional cooperation, even from our own budget, how could we address something that is actionable at grassroots level? Because we are not only dealing with national issues, national action plan, on climate change adaptation. No, we need to implement real actions at grassroots level, so we need to have innovative issues in the area of technology, in the area of capacity building, but most importantly in the area of how best we could get financial support not only from public but also from philanthropies. to reflect back to the principle of climate justice that I also— I always discuss about this because of our limited capacity from LDCs. So this is from my side. And for bankable issues, everything is not always bankable. We need to have innovative— this is time for us to be flexible, to at least help the most vulnerable one. So this is from my side, but thank you very much.

Thank you. To give more time to Donna, I will invite insights from Jerry first.

So I've been talking about water, so I'm going to highlight the project on water. So we did a project in South Africa. The title of the project is— it's called Climate Change Resilience Through South Africa's Water Reuse Program. For GCF, it's called FP209. It's sent to the GCF by the Development Bank of South Africa. So it requested $235 million from the GCF. It raised $850 million from private capital, and the total project size is about $1.3 billion. So you have 3 issues there. How do you promote innovation? As I've said, there's 17% water deficit. People are rationing water, and it's getting worse. And what then do you do? The usual approach is produce more water, but there is no source of water. So what is the approach? Either you stop people from using water or you recycle. But then there is the stigma of using water and using recycled water. How do you create value from something that we usually throw away? That is innovation. So the structure to actually create that new asset class was allowed only because there was all the people and the structures to develop it, to develop the subprojects. Actually, there was some fund developed with grants to actually develop the pipeline, innovate it, create that structure to create and allow and even get the communities to accept using recycled water as water for their own use. It's actually quite complicated, but there's innovation in there, and you need resources to do that. That's number one. Number 2 is that, of course, local action. How do you ensure that this is anchored from the bottom up? Because in this case, the subprojects were created by the municipalities. They are the borrowers. In this case, it's actually embedded into their district-level adaptation plans. It's also very important because some of the districts are unable to actually pay the tariffs. So the structure needs to actually come up with a way to ensure that it's inclusive and the tariffs remain affordable. And even having structured differences in the tariffs to ensure that those that cannot afford it is actually supported. Otherwise, you will leave the people who need it the most behind. And then there's a very important aspect that is embedded into making sure it's locally led, and that is social risk. Because in these cases, there is high risk that people will actually not back this scheme, and there's rejection of the scheme. So therefore, you have probability of failure. So anchoring it from the bottom up was so important in this context, and that was allowed by the way that the whole project was allowed to be designed with the flexibility and finance through the project. Again, these are things— innovation, local action— could be led by an entity like UNIDO. Then the last thing is intelligence. Usually, in these kinds of investments, industries respond to water shortages after they happen, but this project integrates real-time monitoring and predictive schemes using technology to predict when drought will come. You can use technology, and they don't have to be high-tech, But a combination of these 3 things— innovation, locally-led action, and climate intelligence— with blended finance, I always say it can make the impossible possible.

Thank you, Jerry. And to give even more time to Donna, may I invite somebody from the audience to share their example of how innovation, locally-led adaptation, and climate data can come together in developing or designing a great adaptation action. Maybe our colleague from Lesotho wants again to lead the way. Yes, please.

I can also add. I explained about bankable proposal to get financial support, so I could also provide one example of innovation from at least my country. We, even though have limited climate data, but we developed our proposal and we got financial support from LDCF. I think it was about $7 million, and that's also addressing issues of coastal zone management. And then once project is finished, our young people came and they established their new innovation in that corridor, and then they create recreation sites there, and now they got money. So that's the value added from adaptation measures. And then based on that, we have already negotiated with our one of the partners implementing, implementing entities to develop proposals to get more based on the innovation that played by our young people. So that's also very good. And then I think this is quite a good example to have, uh, not really only innovation, but we can also get more support because of we add something that is additional to our businesses as well.

Thank you. If nobody in audience wants to share your interesting examples and keep them for pathway discussions. It's totally— ah, there is somebody who— oh, Lizotta wants— excellent, thank you very much.

Thank you so much, Ms. Moderator. I want to also to applaud your panel today and thank you so much. I just want to add on what the speaker said, that we may not be able, because of incapacity, to have the climate data that could afford us to get or develop bankable investments or interventions. But we need to work on the existing as little as ever. Like I said yesterday, you start small, you grow bigger. We have to take things to our own context and grow from there. An example that I gave yesterday, it's a living testimony that I said the project that we, we had, um, financed by adaptation, actually, as I said, I said we started— the essence of it is, um, for them to, to— we are, like I said, we are Working on the natural resource base, range management, and then I said because we are severely hit by degradation, we have lost the grasses. We are now in the third level of species, which are shrubs, and then we are working on the rangelands. To regenerate. While we do that, we don't pay, um, the communities, but communities are being helped to develop livelihoods projects. The livelihoods projects that they developed have now proliferated into auxiliary projects. Which are now being proliferated to other villages which are segments to the initial project, and the livelihoods of those people have changed. I think that is transformation on its own, but at its own level. I said at the end of the day they ended up having 500 units of layer beds from which they are already now supplying the retail with the eggs. That says the second phase, or where they are, they are able to now be supported and help to develop their own proposals. The second example would be where we have, um, herders who are looking out to— they're protecting the rangeland. We made— I said we as the ministry, we help them, we facilitate development of grazing associations because our rangelands are communal. Out of that, we were able to help them acquire a 700— in my currency, more than half a million was awarded by GIZ to the association. What is happening now is individually, they are having small projects proliferated from the association as they started with the GIS fund. But they are taking it further every day that they are scaling up what they had to change their livelihoods. That is why I was saying saying transformation, we see it, but it should not be bankable in one day, but they will grow from where they are until conglomerately they form something that we could, uh, perspectively say it is bankable. I thank you.

Thank you so very much. This is It's really inspirational to hear how action in one small place triggers such a groundswell of support for resilience. I'm almost about to cry. It's really, really inspirational. Thank you very much. Donna, the floor is yours now.

Yes, thank you so much for giving me so much time to think about an example. But I would— I think I would prefer to build on what the others have already said and highlight a few important points. What we are really hearing from colleagues, ladies and gentlemen, concrete actions. First, they are already happening in small areas. Second, the things that are working right now are also anchored on generations-old knowledge, like what Jerry was saying, this thinking of recycling water, this is not new to local communities and Indigenous peoples. This because for them, water is life. So thinking how we regenerate and apply this principle in industry is something very fantastic. And it boils down to what I'm saying earlier. If we want transformation, think about approaches differently and Let these worldviews guide you, because these have been tested and proven successful for generations. Another point I think was fantastic in the examples is this co-designing and redesigning together. We've heard about locally led adaptation yesterday, and now I actually heard an acronym, a new acronym, LLA, locally. Adaptation, but really, what does it mean? Is it just bringing them to the table and tick the box, or is it really understanding and bringing them to the table? This is inclusion. I think to revisit the concept of inclusion, to not just bring them at any point in the project cycle or in the investment cycle, but really meaningfully engaging them from start to finish, this is one of the things that highlight this. As you said, these are not separate pathways. They actually interlink. Maybe the last point I would like to highlight is that when we actually apply these things, investments can actually really be resilient because, as Jerry pointed out earlier, Private sector and industries want long-term. What is more long-term than really bringing communities together and applying business models that will not only affect and support today's generation, but also future? That is long-term. That kind of sustainability is something that will, of course, attract industries and can be led by UNIDO and our colleagues here in the room.

Thank you.

Thank you. This was very much interesting to hear, and I have a question to our MC. We, of course, can continue our very interesting dialogue for the rest of the days. There's a lot to say and discuss, but you have a program, so can you please tell me, can we still continue

Thank you for your question.

It would be great if we could wrap up, and of course the delegates can continue the discussion during the break.

That's what I thought, but wanted to check with you. So then please give a huge round of applause to our outstanding panel. And now one more event And I wish you all very interesting and productive discussions in the pathway groups, and thank you very much for your participation. Thank you very much.

It was great.

Thank you very much.

Thank you so much, speakers, for those very insightful words. Indeed, I think that discussion could have gone on much longer. And I also personally perceived some tension between one side claiming that, you know, we need more bankability, predictability in the projects, as well as a long-term horizon that can comfort the private sector, but at the same time, also an opposite force saying, actually, we should not expect all climate adaptation projects to be profitable, and this is maybe too much pressure. So this is an ongoing tension that I think also articulated yesterday, and I hope you can keep this in mind. How do we consolidate these 2 forces and reconcile them as they seem to be on opposite sides of the spectrum. With that, I hope you will enjoy the coffee break that is now ready for you all. Right after the coffee break, you will all be guided into the various pathways. The pathways will be taking place in different rooms. I don't have the names with me here. Let me quickly take a look. So within this room, the CR1 room, the pathway Climate Adaptation Innovation for a Resilient Industry will be taking place here. The Inclusive and Locally Led Adaptation will be in CR6. And the third pathway, Climate Intelligence for Industrial Resilience will be in room C0237. No need to remember all of those details. There will be UNIDO staff all around to guide you to the right place. So with that, I wish you a lot of success and fruitful discussions. Thank you.