Despite growing recognition that climate is a systemic financial risk, finance for mitigation and adaptation still falls far short of needs, especially in emerging markets and developing economies (EMDEs) – often most vulnerable to climate shocks and least equipped to respond. With public finance constrained, the private sector is key to closing the gap. To achieve climate targets, EMDEs must mobilize $2.4 trillion/year by 2030 – including $1 trillion from private sources. International private climate finance to EMDEs doubled in two years to $36 billion in 2023, but it must grow 28-fold to meet the scale and urgency of the challenge.

The barriers are well known: insufficient investable projects, inadequate matchmaking between project supply and investor demand, limited financial market development, heightened political and forex risks, and high cost of capital.

This paper presents practical, targeted solutions that draw on insights from policy-makers, multilateral development banks, development finance institutions and climate finance experts. Crucially, the paper reflects input from diverse private investors with varying investment strategies, risk appetites and business goals. Based on these findings, the paper identifies six priority areas and 16 stakeholder-specific actions to unlock the next wave of private climate finance in EMDEs at scale.