Climate change is one of the most critical challenges facing humanity, with far reaching consequences that threaten the well-being of people and the planet. The global reach of climate change affects also those countries that have contributed the least to it. EMDEs, in particular, are most vulnerable at the time of an unfolding polycrisis.
Investors’ appetite for investments in EMDEs has fluctuated over the last two decades. Country-specific risk is seen as a primary driver of such investment flows, accounting for between 60 to 90 percent of investors’ risk considerations in these countries.
While blended finance is not a definitive answer to closing the climate financing gap, it has an important role in demonstrating investability of EMDEs, contributing to aligning financial and sustainability objectives of various stakeholders across the blended finance ecosystem as emissions’ reduction in EMDEs will contribute to curbing the majority of future emissions – a contribution to a global public good.
