Risk to Reward 2025

Regional distribution of private climate finance in EMDEs, by investment sector (2023) FIGURE 8 Central Asia & Eastern EuropeEast Asia & PacificLatin America & CaribbeanMiddle East & North AfricaSouth Asia Sub-Saharan AfricaTransregional70%17%13% 61%13%24% 62%25%13% 66%17%16% 10%12%10%6%9%47%6% Regions Energy Buildings and infrastructure TransportValue Percentage $140 bn 75% $21.4 bn 11% $15.7 bn 8%Regions Agriculture, forestry, fishing Industry Cross sectoral and othersValue Percentage $1.3 bn 1% $1.3 bn 1% $0.6 bn <1% Water and wastewater $5.8 bn 3% Waste $0.5 bn <1%1.0% 1.9% 89%1.4%1.5% 2.7%3.7% 96%2.7% Source: Climate Policy Initiative (CPI), 2025.31 In 2023, private climate finance in EMDEs remained heavily concentrated on mitigation, which absorbed 96% of total flows, while adaptation accounted for just 1%.However, there is also a data gap in adaptation finance given the limited reporting of adaptation investments by corporates that are already mainstreaming resilience in their own operations. Regionally across most EMDEs, mitigation dominates climate finance. However, some regions are beginning to show early signs of diversification. MENA recorded a higher-than-average share of adaptation finance at 4%, with mitigation making up 87% of flows. This relatively stronger adaptation focus is likely driven by the region’s acute exposure to climate risks such as extreme heat and chronic water scarcity.29 For example, Morocco has prioritized investments in drought-resilient agriculture and desalination infrastructure, while Egypt has advanced climate-resilient urban planning in coastal zones vulnerable to sea-level rise. These efforts are further supported by emerging regulatory frameworks, such as national adaptation plans and green building codes that promote climate-resilient infrastructure.In Latin America & Caribbean, although 95% of flows remain mitigation-focused, there is a notable rise in dual-benefit finance. This is particularly evident in Brazil and Colombia, where private capital is increasingly directed towards sustainable land-use and climate-smart agriculture, blending mitigation with adaptation.30 In contrast, Central Asia & Eastern Europe and Sub-Saharan Africa remain almost entirely mitigation-focused, reflecting limited adaptation project pipelines and low investor appetite in sectors such as water, agriculture and urban resilience. Energy attracts the highest volumes of private capital, with regional nuances Examining the sectoral distribution of investments provides additional insight into what kinds of mitigation opportunities are attracting private investors and how these preferences vary across regions. From Risk to Reward: Unlocking Private Capital for Climate and Growth 14