Headlining the climate finance discussions next week at COP26 may be the shortfall in advanced economies’ $100 billion annual pledge to help low- and middle-income countries adapt and further mitigate climate change.
Solar and other renewables are enabling distributed, low-cost cold storage, irrigation, and processing capabilities that could be transformative for rural communities in Africa and South Asia.
The value of carbon markets hit nearly $280 billion last year, but almost none of the SMEs sending diesel generators to the scrap heap are doing it with the help of carbon financing.
Innovative funds and outcome-oriented financing facilities are emerging that build credible metrics to verify adaptation impacts and blend public, philanthropic, and private capital to align risk.
Billions of dollars for adaptation flow to LMICs through the Green Climate Fund, Global Environment Facility, and other UNFCCC financing entities based on adaptation plans that countries are required to develop.
Rather than financing projects directly, public funders must pivot hard to delivering financial products that de-risk private investment—be it through blending, credit enhancement, currency coverage, demonstrating unproven models, or other measures.
To fully leverage the potential of agtech, some investors are moving to non-asset-based lending and other forms of security like future cash flows, purchase order contracts, or accounts receivables.
Demand-side subsidies or results-based financing—essentially paying an operator for a specific outcome—can be instrumental in bringing scale to a sector and incentivizing expansion into new markets.
Of SMEs interviewed, nearly 60 percent either became consumer finance organizations directly or invested in third-party relationships to solve for a lack of consumer credit access.
The task before climate investors is to identify these transformative models, demonstrate their benefits and de-risk them, and bring along the private sector to deliver scale.
This blog was first launched in September 2013 by the World Bank and the Brookings Institution in an effort to hold governments more accountable to poor people and offer solutions to the most prominent development challenges.