2025 Policy Bulletin: Climate Finance for Development

The 2025 Policy Bulletin: Climate Finance for Development, published by the Climate Policy Initiative and partners, provides actionable recommendations for Public Development Banks (PDBs) to accelerate low-emissions and climate-resilient development. It focuses on operationalizing Paris alignment, enhancing public-public collaborations, mobilizing private finance, and supporting just energy transitions in emerging markets and developing economies (EMDEs).

• The adoption of Paris alignment commitments among Public Development Banks (PDBs) has slowed since 2022, and only a minority of these institutions have explicitly committed to such alignment.
• Paris alignment methodologies vary significantly across PDBs due to a lack of global criteria, which has resulted in financing gaps for just transitions and adaptation. Multilateral Development Banks (MDBs) often focus more on 'do no harm' than on proactive transformation, and some fail to consistently publish Paris alignment assessments for sovereign projects.
• Collaborations between Multilateral Development Banks (MDBs) and National Development Banks (NDBs) exist but are limited by political economy, governance, and capacity issues. Between 2015 and 2022, MDBs provided approximately USD 7 billion in loans, grants, and technical assistance to NDBs for climate projects in emerging markets and developing economies (EMDEs).
• Guarantees are an underutilized tool for mobilizing private capital in EMDEs due to structural barriers including high costs, complex application processes, and misaligned timelines.
• Country platforms (CPs) offer a mechanism for delivering climate-positive growth if they are context-specific. For example, South Africa's Presidential Climate Commission used a collaborative process to create a Just Transition Framework to mobilize finance for a national-scale transition.
• PDBs face financial and social challenges in retiring fossil fuels in resource-strapped nations, particularly where young coal fleets risk becoming 'stranded assets'. In South and Southeast Asia, clean energy investment is hindered by inadequate grid infrastructure and unpredictable policy environments.
• PDBs can support the development of domestic carbon markets and debt-for-climate swaps in EMDEs, though implementation is currently limited by a lack of national capacity and PDB resources.

APA

Climate Policy Initiative (2025). 2025 Policy Bulletin: Climate Finance for Development. https://www.climatepolicyinitiative.org/wp-content/uploads/2025/02/2025-Policy-Bulletin-Climate-Finance-for-Development.pdf

Chicago

Climate Policy Initiative. 2025 Policy Bulletin: Climate Finance for Development. 2025. https://www.climatepolicyinitiative.org/wp-content/uploads/2025/02/2025-Policy-Bulletin-Climate-Finance-for-Development.pdf.

Wikipedia

{{cite report |author=Climate Policy Initiative |title=2025 Policy Bulletin: Climate Finance for Development |date=February 2025 |url=https://www.climatepolicyinitiative.org/wp-content/uploads/2025/02/2025-Policy-Bulletin-Climate-Finance-for-Development.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{climatepolicyinitiative20252025, author = {{Climate Policy Initiative}}, title = {{2025 Policy Bulletin: Climate Finance for Development}}, institution = {Climate Policy Initiative}, year = {2025}, month = feb, url = {https://www.climatepolicyinitiative.org/wp-content/uploads/2025/02/2025-Policy-Bulletin-Climate-Finance-for-Development.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }