Climate-related project pipelines in EMDEs exceed current levels of equity investment, resulting in a significant financing gap. Platform-based investments made by DFIs are emerging as a model to attract more equity into climate infrastructure in EMDEs, which has traditionally been dominated by debt. Box 16 illustrates how platform-based DFI equity vehicles can shift the financing mix in EMDEs from debt-heavy structures to scalable equity deployment that attracts institutional investors and delivers tangible climate infrastructure outcomes. To bridge the equity gap in EMDEs’ climate investments, YieldCos82 offer a promising solution. Originally developed in mature markets, YieldCos pool small-scale renewable assets to achieve scale and efficiency. They are gaining traction among climate investors, including DFIs, due to their lower risk profile and consistent dividend growth – ideal for risk-averse institutional investors with large minimum ticket sizes. Aggregating assets, such as off-grid solar receivables or mini-grid portfolios, can meet these thresholds. Effective structuring requires quality assets with adequate sponsorship and dependable long-term revenues. YieldCos also offer liquidity through public listing and portfolio diversification across geographies and technologies. Around 14% of surveyed investors cited lack of exit options as a key barrier; YieldCos can mitigate this. Platform-based equity vehicles BOX 16 British International Investment (BII) launched GridWorks in 2019, a company that builds and invests in electricity transmission and distribution across Sub-Saharan Africa.80 By taking on development risk that private investors typically avoid – such as regulatory uncertainty, political exposure and long lead times – GridWorks creates bankable projects that can later be financed or acquired by commercial investors. In 2021, Gridworks partnered with New GX Capital to co-invest $40 million in Sustainable Power Solutions (SPS), a commercial solar provider operating across Sub-Saharan Africa. The deal led to successful local private capital mobilization, through the absorption of early-stage development risk by GridWorks and the focus of New GX Capital on operational growth. Similarly, as a co-founder and equity partner in the Ayana Renewable Power platform in India, BII invested alongside NIIF (an alternative asset manager backed by the Indian government) and private sponsors into a scalable renewables portfolio with 4.1 GW capacity. This subsequently attracted a $2.3 billion acquisition by ONGC NTPC Green (a 50:50 joint venture between India’s Oil and Natural Gas Corporation, ONGC, and its renewable energy arm, NTPC Green Energy Limited) and others, demonstrating how platform equity investments can rapidly unlock private capital, create exit opportunities and expand infrastructure at scale.81 Clean energy developers in Africa have more pipeline than they are able to finance with the equity that they have on their balance sheet. Martin Nagell, Director, Responsible Investing, MubadalaUse DFI platform-based investments in sustainable infrastructure to attract more equity Aggregate small and fragmented projects into investable portfolios Asset managers Project developers Institutional investors MDBs and DFIs Asset managers Project developers Corporates MDBs and DFIs Institutional investors BanksSOLUTIONS: MEDIUM-TERM SOLUTIONS: LONG-TERM From Risk to Reward: Unlocking Private Capital for Climate and Growth 41

Risk to Reward 2025