Insurance is often brought in too late in project development; early engagement enables more effective risk assessments and mitigation. Public-private partnerships play an essential role in this process by facilitating early collaboration between governments, insurers, investors, and development finance providers to help build critical infrastructure that is resilience for the future. Linda Freiner, Group Chief Sustainability Officer, Zurich Insurance Group Early involvement of insurers in the project lifecycle is critical. By identifying, pricing and managing risks upfront, insurers can transform uncertainty into resilience, making projects more bankable and attractive to investors. Therefore, climate finance strategies must embed insurability as a fundamental component. Early risk assessment and resilience planning can de-risk investments, optimize capital structures, and enable the development of more resilient, climate-aligned projects. Simplified, standardized and facility-based models can also make insurance more catalytic. For example, under the World Bank’s new guarantee platform, Deutsche Bank provided a €507.5 million loan to Benin backed by a first-loss guarantee from the International Development Association (IDA) and a second- loss guarantee from African Trade & Investment Development Insurance (ATIDI). This demonstrates how layered insurance can mobilize private capital in frontier markets when structured efficiently.71 In this way, insurance becomes a key gatekeeper to capital, unlocking greater private finance flows to the regions and sectors that need it most. For example, the Africa Energy Guarantee Facility demonstrates how strategic insurance partnerships can unlock private investment by addressing key risks that typically deter climate finance in challenging markets (see Box 13). Africa Energy Guarantee Facility (AEGF) BOX 13 The Africa Energy Guarantee Facility (AEGF) was established to boost private investment in sustainable energy projects across Sub-Saharan Africa by offering insurance and reinsurance solutions to address the key risks that deter private investors. Through a partnership between primary insurers such as the African Trade Insurance Agency, global reinsurer Munich Re and development banks such as the European Investment Bank and KfW (Germany’s state- owned development bank), AEGF provides insurance against risks such as non-payment, expropriation and civil unrest. These guarantees allow primary insurers to expand their coverage capacity, making it feasible for private lenders and investors to finance energy access, efficiency and renewable energy projects in environments that would otherwise be considered too risky. By leveraging these insurance structures, AEGF has facilitated around $1.4 billion in private investment, exemplifying how strategic insurance solutions can unlock climate finance in challenging markets.72Insurance must be embedded as the “third leg” of climate finance – alongside lending and investment – to crowd-in private capital, expand fiscal space in developing economies and accelerate transition spending. Deploying existing insurance tools more strategically could boost Paris-aligned investment flows by up to 40%, making insurance a cornerstone of climate finance rather than an afterthought. 53Scale up climate insurance and guarantee solutions Insurance Institutional investors Donor governments MDBs and DFIs BanksSOLUTIONS: LONG-TERM 35 From Risk to Reward: Unlocking Private Capital for Climate and Growth

Risk to Reward 2025