Results-based Financing

This report explores the application and potential of results-based financing (RBF) as an innovative financial mechanism. It highlights how RBF can align incentives, transfer risk, and incorporate verification to accelerate private sector funding for climate objectives. The paper discusses various RBF structures, from linking payments to simple outputs like trees planted to more complex outcomes such as forest restoration, and considers its economic rationale, advantages, and limitations in driving sustainable development and climate action.