Leveraging private sector finance for climate compatible development

This working paper by Charlotte Ellis and Kamleshan Pillay discusses the necessity of private sector finance to meet global climate goals, outlining key lessons from the Climate and Development Knowledge Network (CDKN) on creating enabling environments for such investment.

• The Paris Agreement establishes a climate finance target of US$100 billion annually by 2020, to be mobilised by developed countries and channelled via the Green Climate Fund. However, the International Energy Agency estimates that limiting temperature increases to 2°C requires cumulative investments of US$53 trillion by 2035, with annual low-carbon infrastructure investment needs ranging from US$780 billion to US$2.3 trillion between 2020 and 2035, a scale that public sector balance sheets cannot cover alone.
• CDKN identifies several strategic lessons for facilitating private sector investment in climate action, including the need for country-based and context-specific approaches, the use of public policy to influence perceptions of climate finance, and the importance of involving private actors during the design phase. Additionally, the paper suggests using pilot projects to prove business cases, employing risk-sharing measures like guarantees and insurance, utilizing innovative financial instruments, and leveraging existing financial institutions and micro, small and medium-sized enterprises (MSMEs).

APA

Ellis, C., & Pillay, K. (2017). Leveraging private sector finance for climate compatible development. Climate and Development Knowledge Network. https://cdkn.org/resource/working-paper-leveraging-private-sector-finance-forclimate-compatible-development

Chicago

Ellis, Charlotte, and Kamleshan Pillay. Leveraging private sector finance for climate compatible development. Climate and Development Knowledge Network, 2017. https://cdkn.org/resource/working-paper-leveraging-private-sector-finance-forclimate-compatible-development.

Wikipedia

{{cite report |last1=Ellis |first1=Charlotte |last2=Pillay |first2=Kamleshan |title=Leveraging private sector finance for climate compatible development |publisher=Climate and Development Knowledge Network |date=9 October 2017 |url=https://cdkn.org/resource/working-paper-leveraging-private-sector-finance-forclimate-compatible-development |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{ellis2017leveraging, author = {Ellis, Charlotte and Pillay, Kamleshan}, title = {{Leveraging private sector finance for climate compatible development}}, institution = {Climate and Development Knowledge Network}, year = {2017}, month = oct, url = {https://cdkn.org/resource/working-paper-leveraging-private-sector-finance-forclimate-compatible-development}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }