The purpose of the Report is to study the role and impact of financial instruments on climate change mitigation and adaptation processes.The report has been produced as part of the UNDP-EU "EU4Climate" regional programme․ One of the components of the programme is the promotion of reorientation of economic activity towards a low-carbon development pathway. A principal challenge for the financial sector will therefore be to shift existing investment flows from traditional carbon-intensive sectors towards the low-carbon economy.