This report highlights equity as a vital but often overlooked driver of capital formation. By investing early and absorbing risk, equity anchors transactions, enables leverage, and helps build a pipeline of bankable projects. It argues that catalytic equity, deployed on sub-market terms to mobilize additional capital, could be a highly effective tool, estimating that $12-25 billion annually by 2035 could help close the equity gap if well targeted and supported by strong policies and institutions.

As aid declines and public finance faces tighter constraints, the report recommends scaling equity deployment, significantly increasing catalytic equity, and strengthening the evidence base to target it effectively—helping DFIs and philanthropies unlock much larger volumes of private climate and development finance.

The Clean Energy Equity Investment Gap

Climate Policy Initiative (CPI) & Glasgow Financial Alliance for Net Zero (GFANZ)