The problem
Most countries have climate and biodiversity targets. Far fewer have a financing strategy that says, instrument by instrument, where the money will come from. Without one, a Nationally Determined Contribution is a statement of intent that the budget cannot deliver. Sri Lanka's National Climate Finance Strategy for 2025 to 2030, approved by Cabinet in September 2025, and Uzbekistan's Biodiversity Finance Plan, prepared under the UNDP BIOFIN methodology, are two recent attempts to close that gap, and read together they show what a credible national strategy actually contains.
Who this is for
This is written for finance and environment ministries building a climate or biodiversity finance strategy, and for the DFIs and technical partners supporting them. It assumes familiarity with public financial management, sovereign issuance and blended finance.
Why this matters now
The starting positions are stark. In Sri Lanka, the Agriculture and Agrarian Insurance Board's crop insurance covers just 4.23% of total cultivated area, leaving the sector that employs a quarter of the workforce almost entirely exposed. In Uzbekistan, environmental spending was 1.21% of the state budget in 2022 and direct biodiversity spending only 0.33%, while harmful subsidies run at roughly ten times public nature-positive flows. A strategy is what turns those baselines into a sequenced plan, and both governments are moving now because the alternative, target without financing, is no longer credible to their own treasuries or to external funders.
Only 4.23% of Sri Lanka's cultivated area is covered by crop insurance, the kind of protection gap a national climate finance strategy exists to close. Source: National Climate Finance Strategy of Sri Lanka (2025).
The building blocks: one ladder, two entry points
Despite different mandates, the two strategies climb the same ladder of instruments. It begins with institutional plumbing: a taxonomy to classify eligible spending, and budget tagging to see what is already being spent. Sri Lanka is introducing Climate Budget Tagging alongside a Climate Public Expenditure and Institutional Review; Uzbekistan is integrating Biodiversity Budget Tagging into its existing green budget framework. From there both move to public-private instruments, green, blue and sustainability bonds, green loans and PPPs; then to risk transfer through insurance; then to blended finance that draws private capital in beneath concessional layers; and finally to ecosystem pricing, carbon and biodiversity credits, payments for ecosystem services and conservation-linked revenue. Sri Lanka's strategy sets out twelve financial solutions across this ladder, from disaster-risk insurance and ESG debt swaps to a green revolving fund. Uzbekistan organises eleven solutions around a central Blended Finance Facility, seeded at USD 60 million with layered tranches, alongside biodiversity offsets, subsidy repurposing and even conservation licence plates worth around USD 1.2 million a year.
What separates the two
The difference is instructive. Sri Lanka is a middle-income economy scaling climate finance across the three Paris pillars after a fiscal crisis, so its strategy leans on risk transfer, ODA optimisation and capital-market instruments to compensate for constrained public money. Uzbekistan is building biodiversity finance from a lower institutional base, so its plan leads with a single de-risking hub, the Blended Finance Facility, and with subsidy reform, because redirecting the harmful subsidies that outweigh nature spending tenfold is the largest available source of finance before any new instrument is issued. The Uzbekistan plan models mobilisation potential of up to USD 3.6 billion by 2034 against a near-term financing gap of USD 60 million, a reminder that the strategy's value is the pathway, not the opening number.
Risks, limitations and what a robust strategy requires
- Institutional readiness precedes instruments. Fragmented or outdated legal frameworks, as in Uzbekistan, and thin technical capacity, as in Sri Lanka's index-insurance design, will stall even well-chosen instruments if not addressed first.
- Subsidy reform is finance. Where harmful subsidies dwarf nature or climate spending, redirecting them is a larger and cheaper source than any new issuance, and omitting it understates what a strategy can mobilise.
- Headline gap figures are provisional. Sri Lanka's needs await its expenditure review; Uzbekistan's USD 60 million gap will rise sharply if large programmes are folded in. Both strategies are living documents, and treating an early number as fixed misleads planning.
- Market access cannot be assumed. Constrained access to international capital markets and low domestic insurance uptake mean concessional finance and guarantees remain load-bearing, not transitional.
Conclusion
For a ministry drafting its own strategy, Sri Lanka and Uzbekistan point to the same sequence: build the taxonomy and budget tagging first, quantify the gap honestly as a living figure, redirect harmful subsidies before issuing anything new, and only then layer on bonds, insurance and blended finance matched to the country's fiscal position. The instruments are largely shared; what distinguishes a strategy that mobilises capital from a document that lists ambitions is the order in which they are built.