Can Special Purpose Vehicles plug the Sovereignty Gap in Climate Finance for Post-conflict Regions?

This article examines how the state-centric characteristic of international climate finance creates access barriers for non-sovereign territories, such as the Kurdistan Region of Iraq and Northern Syria. Although these entities are not formally excluded from all climate funds, they are presented in the paper having regard to their limited international status, inconsistent governance arrangements, and strained relations with internationally recognised central authorities, a fact which significantly restricts direct and predictable access to adaptation and mitigation finance. The article finds that this institutional deficit also weakens the conditions necessary for stable green investment. Drawing on selected doctrines regarding effective control, functional international capacity, and investment structuring, the paper develops the concept of a limited functional legal personality for non-sovereign actors in the field of climate finance. On this basis, it analyses whether specially designed investment vehicles, including special purpose vehicles, would contribute to channelling green foreign direct investment, to the development of small-scale projects, and to mitigating some of the legal and political risks associated with contested governance. The conclusion that follows is that a carefully delimited functionalist approach would complement, without replacing, the state-based structure of the Paris regime, while also contributing to the strengthening of climate resilience and investment viability in territories characterised by political complexity.