Washington, D.C., November 3, 2025 — Today, Convergence, the global network for blended finance, launches the State of Climate Blended Finance 2025.
The report finds that despite declining from a record high in 2023, the climate blended finance market remained steady in 2024, with the second-highest total in aggregate financing in the past decade, representing $15.5 billion mobilized across 84 deals.
There was a significant growth in private investor appetite in 2024. Institutional investors committed $1.6 billion into climate blended finance in 2024, a massive surge from just $2 million in 2022, while commercial banks contributed $2.4 billion. Local private actors, domiciled in emerging markets, are also playing a growing role in climate blended finance. The share of overall investments from local private actors rose from 17% in 2019-2021 to 29% in 2022-2024. Since 2022, private investors have committed $14.6 billion to climate blended finance transactions, representing 31% of total commitments over the past three years. This makes them the second largest source of capital to climate blended finance, however, these volumes are infinitesimal by private sector standards.
“Despite remaining steady, the market falls far short of the climate financing needs of developing countries, with only incremental growth where exponential growth is needed,” says Andrew Apampa, CFA, Associate Director of Market Insights. “The collision of diminishing foreign aid and the scale of climate financing required, make climate blended finance more critical than ever.”
Mitigation has dominated climate blended finance, accounting for 56% of deals and 64% of total flows from 2019 to 2024. Between 2023 and 2024 there was a sharp increase in private capital flows to mitigation, nearly doubling from $2.1 billion to $4.1 billion. Blended finance for adaptation still makes up the smallest share of the market, accounting for 19% of transactions and 13% of flows between 2019 and 2024. However, adaptation blended finance flows surpassed $2 billion in both 2023 and 2024, increasing from $2.1 billion to $2.4 billion, signaling stronger momentum.
Climate investments are increasingly concentrated in lower middle-income countries, while the share of financing in least developed countries (LDCs) has dropped. Climate blended finance activity in LDCs fell from 23% in 2023 to 5% in 2024, deals in lower-middle-income countries rose to 73% in 2024, from 62% in 2023. This movement to lower-middle income countries is reflected in the regions showing the most growth in blended finance in 2024: East Asia and the Pacific as well as Europe and Central Asia saw transactions increase by 77% ($1.3 billion to $5 billion) and 100% ($2.6 billion to $6.4 billion) from 2023 to 2024, respectively.
Financing to Ukraine makes up a significant portion of flows going into Europe and Central Asia, with nine deals totaling $1.4 billion, and placing Ukraine as the country with the second highest climate blended finance activity in 2024. Most of these deals were arrangements between the European Bank for Reconstruction and Development and Ukrainian banks in an effort to sustain critical infrastructure and essential services as the war persists. This positions blended finance both as a form of crisis financing, as well as a tool to effect operational and environmental sustainability for real economy companies.
“This current report looks at data from 2024 and does not yet reflect the full effects of the decline in official development assistance that we’ve seen in the last year or so,” says Joan Larrea, CEO at Convergence. “We can expect more big waves of change to come and we are going to need to be more efficient and ambitious with how concessional money is applied within blended finance transactions. This report captures some of the groundwork being laid for the next decade of blended finance. Whether the changes ahead produce more urgency around scale and speed-to-market or whether the field weakens under strain will depend on how well we apply the lessons we’ve learned from the last decade.”
Finally, this year’s report assesses the state of climate blended finance in light of the Fourth International Conference on Financing for Development held in Seville earlier this year, and sets out the key challenges and opportunities facing the market in the years ahead.
Analysis in the report draws from Convergence Market Data, the largest and most detailed database of historical blended finance transactions, currently comprising 1,478 blended finance transactions with a total investment of $260 billion.
Read the State of Climate Blended Finance 2025 here.
About Convergence
Convergence is the global network for blended finance. Convergence’s Blended Finance Accelerator supports blended finance practitioners with design grants, acceleration support, and market intelligence to scope, structure, and launch new blended finance solutions that unlock commercial investment to accelerate sustainable development in emerging markets.
On top of market acceleration, through its Blended Finance Accelerator, Convergence generates blended finance data, intelligence, and deal flow to increase private sector investment in developing countries. Convergence’s global membership includes over 160 public, private, and philanthropic investors as well as sponsors of transactions and funds.
Media Contact
Sijia Yi
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Convergence
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