Almost all of the investment packages identified in the agriculture and water sectors show high net economic benefits. Their economic internal rates of return (Eirr) exceed both the thresholds of national public investment management systems and the 9% required by ADB. In Cambodia and Nepal, the seven agricultural packages analyzed exceed 10%, in some cases by a wide margin. In Armenia and Indonesia, the plans focused on a few packages, and more detailed cost-benefit analyses provided specific economic and financial rates of return. In Yerevan, the results were used to complete the government’s public investment appraisal template.

However, the financial internal rates of return (Firr) of many packages are significantly lower than their economic returns. According to the study, this is because national adaptation plans favor public-sector priorities, with a large share of interventions supported by public resources. Opportunities for private investors depend on the sector, and the most immediate ones are in agricultural value chains where businesses are already active (Armenia, Cambodia, Indonesia and Nepal). Climate services for farmers, agricultural research and public-private partnerships in the water sector are instead longer-term prospects, conditional on regulatory reforms. Governments, the report notes, have recognized the need to create incentives, close information gaps, launch reforms and use blended finance instruments such as guarantees and concessional credits. In Cambodia, a gap also emerged between government priorities, focused on rice and fish, and investor interest in climate-resilient commercial crops.

One clear lesson is that no single source or instrument of adaptation finance is sufficient on its own. The packages combine institutional, infrastructure and technology interventions and must cover both capital investment and recurrent expenditure. This calls for loans accompanied by technical assistance and policy-based lending.

The plans also differ in scope and funding needs, as they are shaped around their target areas:

• Bhutan: eleven packages for the water sector, from watershed management to hydropower and flood risk, for about $850 million (around €760 million) over 15-20 years.

• Armenia: seven packages along the horticulture value chain, for $150-190 million (€134-170 million) by 2050.

• Cambodia: seven packages for agriculture in the country’s northwest, for $500 million (around €447 million).

• Nepal: seven packages for Madhesh Province, for $360-700 million (€322-625 million) over five years.

• Mongolia: 250 climate-smart water ponds by 2030, for $56.15 million (around €50.2 million).

• Indonesia: from $544.4 million to $2.18 billion (€486 million to €1.95 billion) to extend interest subsidies under the Green KUR concessional credit scheme to 4.75 million hectares of irrigated rice fields.

Climate diagnostics are a useful tool for filling gaps in existing plans. In Bhutan, flood risks from glacial melt were integrated; in Cambodia, heat risks to agricultural labor productivity emerged; in Mongolia, simulations of water volumes at three pilot sites led to a checklist for siting and designing ponds.

At the time the study was written, governments in the countries concerned had approved the plans or were in the process of doing so. The process has already begun to generate initial funding, such as new adaptation grants in Cambodia through the Asian Development Fund, and some packages have entered ADB project pipelines.

The report starts from a wide resource gap. According to the UNEP estimates cited, adaptation in developing countries will require between $310 billion and $365 billion a year by 2035 (around €277-326 billion, in 2023 prices). In 2023, tracked adaptation finance stood at just $65 billion (around €58 billion). Less than 17% of the roughly $95 billion (around €85 billion) allocated between 2017 and 2021 reached the local level. As of February 2025, only 9 of the 59 national adaptation plans (NAPs) submitted to the Unfccc referred to climate-resilient fiscal planning. Another 37 included cost estimates, but none quantified the benefits.

The program is based on a five-step framework co-designed by ADB with the participating countries. It starts with alignment with national development plans and budget systems. This is followed by a strategic climate diagnostic based on simplified indicators rather than complex modeling. Individual actions are then grouped into packages ranked by urgency, and the costs, benefits and economic and financial returns of each are assessed. The final step is matchmaking with financing sources and instruments, guided by a decision tree adapted from a World Bank tool. Each country chose a manageable unit, such as a sector, a theme or a region, and revised the packages several times.

The report was produced with the International Institute for Sustainable Development (Iisd) and the International Centre for Integrated Mountain Development (Icimod). It is based on case studies, country reports and dialogues conducted between 2022 and 2025. The program is being extended to Bangladesh, India, Laos, Palau, the Philippines, Sri Lanka and Timor-Leste.