Risk to Reward 2025

Conclusion: From ambition to execution Now is the time to translate national climate commitments into investable plans, provide risk-sharing platforms for capital to flow, and align public, private and philanthropic actors behind shared goals. Urgency demands action Climate impacts will not wait and neither can the global community. Achieving net-zero goals in EMDEs requires swift action across the six priority areas identified in Chapter 2 to unlock capital and catalyse bankable projects now, not years from now. Mobilizing private climate finance at scale in EMDEs requires a holistic, systemic approach across the solutions proposed. Building investor confidence hinges on a multi-stakeholder approach rooted in aligned incentives, trusted data, enabling policies and patient capital. Everyone has a role to play This means moving from pledges to transactions, from frameworks to deal flows. Scaling-up efficient public-private risk-sharing mechanisms is essential to unlock capital at scale. The following actors each have a critical role to play in deploying the solutions outlined in Chapter 2: Institutional investors –Commit a portion of long-term portfolios to blended climate finance vehicles in EMDEs. –Partner with DFIs and MDBs on syndicated loans and co-investment platforms to gain stable, risk-adjusted returns and early visibility into investable projects/companies, while meeting ESG and fiduciary obligations. Commercial banks and local financial institutions –Challenge the traditional banking model and mindset to better connect climate risks with climate opportunities. –Join syndicated climate loans with global or local co-financiers to enter new markets and grow a climate-conscious customer base. –De-risk green lending portfolios through partnerships with MDBs (e.g. EBRD’s GEFF programme). Corporate investors –Invest in enabling infrastructure and supply chains for climate-aligned growth. –Form buyers’ clubs and aggregate demand to support early-stage start-ups and MSMEs, reduce scope 3 emissions and increase supply chain resilience. Asset managers and impact investors –Explore public-private equity structures to fund undercapitalized segments, such as climate tech in EMDEs, including patient capital fund structures (e.g. permanent capital vehicles). –Partner with DFIs and MDBs deploying catalytic capital to scale up high-risk but high-potential ventures. Policy-makers in EMDEs –Build investable pipelines and remove unnecessary barriers to private capital. –Operationalize country platforms to align national development plans with climate finance goals. –Offer predictable policy environments, engaging private investors earlier in the project development cycle.The more innovative financing tools you put out there, the longer investors wait to scale up – because they will wait for the next innovation. Kavita Sinha, Director, Department of Private Sector Facility, Green Climate Fund From Risk to Reward: Unlocking Private Capital for Climate and Growth 44