Capital Mobilization Roadmap

The Capital Mobilization Roadmap proposes four high-impact areas for reform to accelerate private investment in emerging markets and developing economies (EMDEs). It suggests creating a standardized credit guarantee facility and reforming capital allocation rules to address credit risk. To mitigate currency risk, it recommends scaling the TCX market creation capacity and exploring SDR-backed guarantees via the JET-FIT proposal. For development risk, the roadmap advocates for increased funding for existing project preparation models and a shift toward more sustainable MDB financing for project development. Finally, it proposes aligning MDB staff KPIs with mobilization targets and implementing 'originate-to-distribute' models through standardized underwriting criteria.

• To address credit risk, the roadmap proposes a credit guarantee facility with standardized contracts that requires only the estimated default rate to be used as seed capital. Such a facility has significant mobilization potential; for example, a USD 10 billion facility could mobilize between USD 25 billion and USD 100 billion.
• Long-term credit risk reform requires changing capital allocation rules, including MDB internal risk weightings and Overseas Development Assistance (ODA) accounting rules, to allow guarantees to be based on estimated default rates rather than requiring the full guarantee amount to be held.
• To mitigate currency risk, the roadmap suggests adding capital to TCX to increase its market creation capacity, noting that an additional $5 billion investment could enable TCX to reach $60 billion in hedging capacity by 2025. It also proposes the Just Environment Transition - Foreign exchange Investment Trust (JET-FIT) to use SDR-backed guarantees to lower hedging costs in JETP countries.
• Addressing development risk involves scaling proven project development models and platforms, which can offer high leverage; early-stage investments in project development typically represent 2-5% of total project costs, potentially resulting in 20-50x leverage.
• The roadmap argues that MDB incentives are currently misaligned, noting that in 2021, climate finance mobilization for low- and middle-income countries (LMICs) was only $13 billion out of $51 billion in total climate finance. It proposes aligning staff performance and institutional KPIs to prioritize total investment volumes and private sector mobilization over institutional volumes.
• A proposed long-term reform for MDBs is the implementation of 'originate-to-distribute' models, which would use standardized underwriting criteria and asset classes to bundle diversified projects into portfolios for securitization, thereby crowding in private sector investment upstream.

APA

Pinko, N., Tonkonogy, B., Widge, V., & Buchner, B. (2023). Capital Mobilization Roadmap. Climate Policy Initiative. https://www.climatepolicyinitiative.org/wp-content/uploads/2023/06/CPI_IFI-Capital-Mobilization-Roadmap_June-2023-2.pdf

Chicago

Pinko, Nicole, Bella Tonkonogy, Vikram Widge, and Barbara Buchner. Capital Mobilization Roadmap. Climate Policy Initiative, 2023. https://www.climatepolicyinitiative.org/wp-content/uploads/2023/06/CPI_IFI-Capital-Mobilization-Roadmap_June-2023-2.pdf.

Wikipedia

{{cite report |last1=Pinko |first1=Nicole |last2=Tonkonogy |first2=Bella |last3=Widge |first3=Vikram |last4=Buchner |first4=Barbara |title=Capital Mobilization Roadmap |publisher=Climate Policy Initiative |date=6 June 2023 |url=https://www.climatepolicyinitiative.org/wp-content/uploads/2023/06/CPI_IFI-Capital-Mobilization-Roadmap_June-2023-2.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{pinko2023capital, author = {Pinko, Nicole and Tonkonogy, Bella and Widge, Vikram and Buchner, Barbara}, title = {{Capital Mobilization Roadmap}}, institution = {Climate Policy Initiative}, year = {2023}, month = jun, url = {https://www.climatepolicyinitiative.org/wp-content/uploads/2023/06/CPI_IFI-Capital-Mobilization-Roadmap_June-2023-2.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }