This sentiment was backed by survey results conducted for this report (see Figure 10), where 44% of respondents identified access to a pipeline of bankable projects as the most critical data needed to support climate investment decisions. The responses were largely in line with the overall survey respondent split, highlighting a consensus on the importance of this requirement. This issue reflects a broader project preparation gap, where promising initiatives fail to reach commercial viability due to underdeveloped feasibility studies, unclear risk allocation and ongoing regulatory uncertainty. Integrating climate adaptation into infrastructure investments One underutilized opportunity lies in integrating climate adaptation measures into existing public infrastructure investments. These “add-on” components – such as climate risk assessments or resilience upgrades – can be layered onto already bankable projects, enhancing their durability and attracting climate-first investors. This approach is particularly relevant in EMDEs, where adaptation finance remains limited and standalone projects often lack commercial viability. One way to expand and diversify the pool of bankable opportunities is by strengthening the early-stage end of the pipeline, where climate- focused start-ups and micro, small and medium- sized enterprises (MSMEs) operate. MSMEs are critical to EMDE economies, contributing up to 40% of GDP and 70% of formal jobs.38 Yet the MSME finance gap stood at $5.7 trillion in 2019, up from $4.4 trillion in 2015, reflecting persistent underinvestment.39 Without targeted support, many climate MSMEs fail to scale up, limiting their visibility and excluding them from larger investment pipelines. Public-private MSME and venture platforms can address this by combining concessional capital with technical support, helping firms reach bankability. Examples include the Equator Fund’s $55 million for African climate-tech start-ups and the Catalyst Fund’s incubation support, which improved firm survival rates (see Box 2). Importantly, linking these platforms to national project databases and NDC-aligned country platforms would integrate smaller ventures into broader pipelines visible to institutional investors. Flexible structures such as HoldCos40 or tiered share models (e.g. Africa Climate Ventures) also help align long-term climate business growth with investor needs. Together, these mechanisms create more visible, credible pipelines, broadening the spectrum of investable climate projects in EMDEs. Closed-ended funds which force investors to exit are difficult in Africa where private capital markets can be less liquid; permanent capital vehicles afford investors the patience to harvest holdings both when they are ripe and when the right buyer can be identified. CJ Fonzi, Co-Founder and Chief Operating Officer, Africa Climate Ventures Catalyst Fund BOX 2 The Catalyst Fund is a pre-seed venture capital (VC) fund dedicated to driving climate adaptation and resilience innovations across Africa. It offers a practical example of building a portfolio of investable climate companies from the earliest stages. Structured as a $40 million vehicle pairing concessional and commercial capital (including $8.6 million from FSD Africa Investments, Cisco Foundation, USAID Prosper Africa and Andrew Bredenkamp) with hands-on venture support, it provides each pre-seed start-up with up to $200,000 in capital (split between $100k equity and $100k of hands-on venture-building support) and offers follow-on financing up to Series A. By aggregating investments and offering follow-on funding, the fund helps overcome size barriers for institutional investors, making small climate companies more attractive and investable.41Strengthen early-stage pipelines through public-private partnerships Asset managers Project developers Corporates MDBs and DFIs EMDE governments Donor governmentsSOLUTIONS: SHORT-TERM From Risk to Reward: Unlocking Private Capital for Climate and Growth 21

Risk to Reward 2025