if you do not want to drill into the cinder block wall you could make a frame studded wall against it and attach it to the cinder block securely and then attach your shiplap. the frame would not have to be as thick as a normal 2x4 studded wall unless you are planning to add a lot of weight to the wall.
cover interior concrete block walls with a layer of surface-bonding cement to remove the look of unfinished blocks. a layer of surface-bonding cement also creates a clean surface that's easily decorated further. in addition to creating a smooth surface, spreading the cement onto the block walls adds an insulation layer and increases waterproofing.
calculate the necessary cinder block by square feet. the typical cinder block is 8 by 16 inches meaning that a cinder block covers an area of 1.125 square feet. the total cinder blocks needed will be 1.125 times the area of the wall but be sure to subtract the openings such as windows, doors or any other architectural feature.
step 2. install vertical furring strips every 16 inches on the cinder blocks, using concrete screws to hold them in place. leave a 1-inch gap between the bottom of the vertical furring strips and the base furring strip. this gap is for installing electrical wires and cables for television or internet.
the stuff between the concrete/cinder blocks you spread the parget out over the block wall evenly using a trowel. it can be a bit tricky covering the joints because you want an even coat of parget but where the joints are it will take a little bit more as opposed to the blocks.
tape areas you do not want painted. apply a coat of primer to your walls, which will help the paint adhere to the walls correctly. you can apply with a roller or brush or spray it on. one gallon of primer should be enough to cover 200 square feet of wall space. allow the primer to dry thoroughly.
paint the cinder block wall with a thick coat of masonry waterproofing paint, pushing paint into cracks and crevices of block. add finish coats. cover the wall with a second thick coat and, if needed, a third coat. for the wall to be waterproof, the paint needs to thoroughly cover the cinderblock with none of the block showing through.