Risk to Reward 2025

I prefer using the term ‘risk sharing’ because ‘de-risking’ implies that the private sector expects major risks to be fully absorbed by someone else. In contrast, risk sharing emphasizes a collaborative approach where risks are shared alongside the private sector, which is essential. Prasad Ananthakrishnan, Advisor Climate Finance, Monetary and Capital Markets Department, International Monetary Fund Climate Syndication Platform BOX 5 The Climate Syndication Platform (CSP), announced at COP28 by the European Bank for Reconstruction and Development (EBRD) and Germany’s Federal Ministry for Economic Affairs and Climate Action (BMWK), is designed to mobilize up to €225 million in private climate finance over eight years for mitigation and adaptation projects in EMDEs in, for example, Eastern Europe, Central Asia, Türkiye and North Africa.While it has not yet been implemented, CSP aims for a 7.5x leverage ratio by using the German government’s funds as a first-loss tranche, which enhances creditworthiness and provides institutional investors with pro rata first-loss risk coverage. Supported further by EBRD capital and German funding for technical assistance, CSP serves as an innovative mobilization model that shares risk, encourages participation in markets that would otherwise struggle to attract private capital and supports project origination and development.43,44 From Risk to Reward: Unlocking Private Capital for Climate and Growth 24