The Clean Energy Equity Investment Gap

The report identifies a significant gap in equity investment for clean energy in emerging markets and developing economies (EMDEs), noting that current growth rates are insufficient for net zero goals. It proposes the use of catalytic equity—invested on sub-market terms—as a high-leverage tool to reduce risk and attract commercial investment, estimating that relatively small annual amounts of catalytic equity could help bridge a USD 215 billion annual gap.

• Equity investment in emerging markets and developing economies (EMDEs) is projected to grow at 5.4% annually between 2025 and 2035 in a Base Case scenario, reaching approximately USD 160 billion per year. To align with a net zero pathway, this growth rate must increase to 13.1% annually to reach USD 375 billion per year, resulting in an annual equity gap of USD 215 billion.
• Catalytic equity, which is invested on sub-market terms to mobilize additional capital, can significantly increase total project investment by reducing risk and enhancing returns. Evidence indicates that one dollar of catalytic equity can unlock USD 4 in intermediated equity, USD 9 at the project level, and up to USD 30 in total project capital expenditure (CapEx).
• The report estimates that an annual investment of USD 12–25 billion in catalytic equity by 2035 could help address the USD 215 billion equity gap in EMDEs, provided it is well-targeted and supported by institutional and policy actions.

APA

Climate Policy Initiative (2025). The Clean Energy Equity Investment Gap. https://www.climatepolicyinitiative.org/publication/the-clean-energy-equity-investment-gap/

Chicago

Climate Policy Initiative. The Clean Energy Equity Investment Gap. 2025. https://www.climatepolicyinitiative.org/publication/the-clean-energy-equity-investment-gap/.

Wikipedia

{{cite report |author=Climate Policy Initiative |title=The Clean Energy Equity Investment Gap |date=14 November 2025 |url=https://www.climatepolicyinitiative.org/publication/the-clean-energy-equity-investment-gap/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{climatepolicyinitiative2025clean, author = {{Climate Policy Initiative}}, title = {{The Clean Energy Equity Investment Gap}}, institution = {Climate Policy Initiative}, year = {2025}, month = nov, url = {https://www.climatepolicyinitiative.org/publication/the-clean-energy-equity-investment-gap/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }