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Adaptation Investment Cycle

Background


Europe has a large adaptation finance gap. Subnational governments in Europe invested €8.3bn of adaptation in 2022, but annual adaptation needs to 2030 are estimated at between €16bn – 36bn, suggesting a gap of €8-28bn a year[1]. As such, the Adaptation Mission recognizes finance and resources as a Key Enabling Condition and seeks to use Mission funding to lever in greater public and private investment[2].

[1] Paul Watkiss Associates internal calculation. [2] European Commission (2021) Adaptation Mission Implementation Plan.



The Adaptation Investment Cycle


To help mobilise finance, and ensure that the Regional Resilience Journey leads to bankable projects (i.e. those that meet the conditions required by the financier to finance a project), the consortium has developed the Adaptation Investment Cycle – an iterative, 6 step process to develop Adaptation Investment Plans, designed to be completed as part of the Regional Resilience Journey. The Cycle develops the financial aspects of a Climate Resilience Strategy from the identification of adaptation needs and barriers to finance all the way to the implementation and monitoring of efficient adaptation project.

graph AIC

The process helps regions to identify the financing and investment needs for regional adaptation, and develop Investment strategies, Investment plans and a pipeline of bankable Investments to mobilise greater public, private and voluntary sector investment towards achieving their Climate Resilience Strategy, in a just and equitable way.

Further Information


In March 2025, Pathways2Resilience published the report "Developing Regional Climate Resilience Investment Plans and Project Pipelines. Implementation guidance to support regions through Adaptation Investment Cycle" . In addition to that, the project has developed detailed resources and templates to support the successful regions to apply it.

In the context of Pathways2Resilience’s work on regional adaptation finance, a Practitioner Finance Expert Working Group was assembled, acting as a liaison between regions and the broader financial assistance of Pathways2Resilience partners.



Licensing agreement


Developed by Paul Watkiss Associates and Athens University of Economics and Business, with contributions from Climate KIC, Global Infrastructure Basel, ICLEI Europe, IIASA, IIED Europe, LGI Sustainable Innovation and Regions4 under the Pathways2Resilience Horizon Europe project funded by the European Commission.

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If you reference this resource, please cite as: Paul Watkiss Associates & Athens University of Economics and Business (2026). Adaptation Investment Cycle (AIC). Pathways2Resilience. CC BY-NC-ND 4.0.