Project-Based Guarantees in Climate Finance: Enhancing Effectiveness and Scale

This paper presents a structured framework for assessing and enhancing the effectiveness and scalability of project-based guarantees in climate finance. It systematically examines how guarantees mitigate risk and mobilize private investment, identifying the conditions under which they outperform alternative tools such as concessional loans and subsidies. The analysis also provides practical policy guidance, supporting more efficient allocation of public resources toward instruments best suited to attract significant private sector participation.