The Clean Energy Equity Investment Gap

This report by the Climate Policy Initiative and the Glasgow Financial Alliance for Net Zero examines the critical role of equity and catalytic equity in closing the clean energy investment gap in emerging markets and developing economies (EMDEs) to reach net zero goals by 2035.

• There is a significant projected gap in annual equity investment for emerging markets and developing economies (EMDEs) between 2025 and 2035. In a Base Case scenario, equity investment is expected to grow by 5.4% annually to reach USD 160 billion per year. However, to align with a net zero pathway, investment must grow at a rate of 13.1% annually to reach USD 375 billion per year, resulting in an annual equity gap of USD 215 billion.
• Catalytic equity, defined as equity invested on sub-market terms to mobilize additional capital, is identified as a highly efficient tool for 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 a relatively small amount of catalytic equity—between USD 12 billion and USD 25 billion annually by 2035—could help bridge the USD 215 billion equity gap in EMDEs, provided it is well-targeted and supported by institutional and policy action.
• The authors recommend that the climate and development finance community shift focus from historical debt financing toward mobilizing more equity, significantly increasing the volume of catalytic equity, and strengthening the knowledge base to ensure targeting is effective.

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} }