HORIZON-MISS-2026-01-CLIMA-07

Despite the urgent need for climate adaptation investment, local adaptation actions remain chronically underfunded. Unlike mitigation projects (solar farms, EV infrastructure), adaptation measures — flood defences, urban cooling, nature-based solutions — rarely generate direct revenues, making them unattractive to private lenders on their own terms. Add to this the typically small scale of local projects, which drives up transaction costs and undermines bankability, and the result is a significant financing gap. Annual EU adaptation costs are estimated anywhere between €15 billion and €500 billion through 2030, yet private finance has barely entered the picture.

What This Call Is Trying to Do

This Coordination and Support Action, with a budget of €20 million, aims to break that deadlock by demonstrating in real-life conditions that blended finance — combining public grants with private bank loans — can work for local adaptation. Rather than simply theorising about the model, the selected consortium will actually deploy subgrants to local project promoters, who must already hold a conditional loan offer from a National Promotional Bank (NPB) or other bank under an EIB intermediated lending facility. This sequencing is deliberate: it forces early engagement with the banking sector and ensures every supported project has already passed a creditworthiness and eligibility assessment before public grant money is committed.

The Role of the EIB

The European Investment Bank sits at the heart of this design. As the EU's climate bank, it will make intermediated lending available to NPBs and other banks specifically for local adaptation actions, channelled through its Climate Action and Environmental Sustainability window. Beyond lending, the EIB will provide technical assistance to banks and project promoters through existing advisory programmes (the InvestEU Advisory Hub's Green Gateway and the ADAPT platform), and will share knowledge and guidance directly with the funded consortium. This is not a passive institutional endorsement — the EIB is a structural partner in the architecture of the action.

What Consortia Must Do

Proposals must address two interconnected workstreams. The first and larger one — absorbing at least 70% of the EU contribution — is the deployment of financial support to third parties (FSTP) via cascade calls. Local adaptation projects must fall within the €500,000 to €10 million range, with the grant covering no more than 70% of total project costs (the remainder coming from the bank loan). The first cascade call must be launched within ten months of project start, and consortia are expected to actively pursue geographic balance across EU member states.

The second workstream is analytical and disseminatory: capturing barriers encountered during implementation, reviewing how the EU Taxonomy is being applied in practice, drawing lessons from comparable blended finance instruments (LIFE integrated projects, national capital finance facilities), and producing actionable recommendations on the right mix of grants and loans to attract private capital for adaptation at local scale. These findings must be disseminated through targeted channels, with regional and local authorities as the primary audience.

Nature-Based Solutions and Mission Links

In line with the EU Mission on Adaptation to Climate Change, nature-based solutions should be actively explored as the preferred option for local actions wherever feasible. Funded projects are expected to connect with the Mission Implementation Platform, participate in the Mission Community of Practice, and build on work already carried out by the Climate City Capital Hub. Synergies with projects funded under related Horizon calls (MISS-2024 and MISS-2025) are strongly encouraged.

The Bigger Picture

Ultimately, this call is about proving a model. If blended finance can be shown to work — with the right sequencing, the right institutional partnerships, and the right balance of grant and loan — the intention is that NPBs and other banks will scale it up independently, dramatically expanding the pool of fundable local adaptation actions well beyond what public grants alone could ever support.

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