The sources of private financing comprise the greatest capital pool that can be leveraged for action against climate change. However, the ecosystem of private stakeholders is very complex; a web of innumerable actors each with unique risk tolerances and particular returns expectations. Financial intermediaries add another layer of complexity, introducing new instruments and capital flows to the equation.

This report acts as a guide for development and policy practitioners looking to better navigate the broad private investment ecosystem for climate-aligned investing. The role of blended finance to mobilize private capital for climate solutions is examined in detail, including trends in the variable roles different investors classes assume in the structuring approach. The report also takes a macro-level look at private sector activity in climate finance, with a special focus on market facilitators who play an important role in determining who and what ultimately gets financed.    

The Ecosystem of Private Investment in Climate Action

UNDP