The LIFE Regulation for 2014 - 2020 allows for the first time the use of financial instruments. Three options for a financial instrument part funded via the LIFE Climate Action sub-programme are discussed in the project. An in-depth assessment of the options is required. As options financing instruments for mitigation and climate adaptation are covered, including a flexible loans and guarantee facility for energy efficiency and a technical assistance facility.

The LIFE programme 2014-2020 is divided into two sub-programmes, one focused on environmental policy and the second exclusively dedicated to developing innovative ways to respond to climate change across Europe supporting a shift towards a resource-efficient, low-carbon and climate resilient economy. The Climate Action sub-programme provides amongst others the possibility to experiment and test new approaches, e.g. the use of innovative financial instruments.

As such the objectives of this study are to: Discuss possible options for financial instruments within the LIFE Climate sub-programme with different stakeholders such as European Investment Bank (EIB), DG CLIMA, etc.; Conduct ex-ante evaluations of three identified options; and Support DG CLIMA in preparing the implementing act needed to set up the financial instrument. Following options are considered:

1. a flexible loans and guarantee facility for energy efficiency (testing the DEEP Green initiative);
2. a new climate window under proposed EU financial in-struments in Horizon 2020 (debt and equity facilities) with the aim to target low carbon innova-tive SMEs;
3. a technical assistance facility to support the development and implementation of investment projects and other actions that make European cities more climate change resilient (including vulnerability assessment to hazards that include urban floods, regional droughts, increasing storm intensity, sea-level rise, landslides).

The work was led by ICF International. Ecologic Institute's work focused on the climate adaptation related options.