Capital Mobilization Roadmap

The Capital Mobilization Roadmap is a discussion draft by the Climate Policy Initiative (CPI) that outlines pathways to mobilize private capital for climate and development priorities. It focuses on four high-impact areas: reducing credit risk through purposeful guarantees, mitigating currency risk via market creation and local currency lending, scaling project development models to reduce development risk, and reforming Multilateral Development Bank (MDB) incentives to prioritize private sector mobilization over institutional volumes.

• To address credit risk, the report proposes a short-term reform to create a credit guarantee facility with standardized contracts and agreed criteria. This facility, potentially jointly capitalized by MDBs, would only require the estimated default rate to be used as seed capital. The potential for mobilization is estimated at least 6x lending, with some estimates suggesting 25x or more; for example, a USD 10 bn facility could mobilize between USD 25 bn and USD 100 bn.
• Long-term credit risk reform requires changing capital allocation rules to incentivize guarantees. This includes updating MDB internal risk weightings, Overseas Development Assistance (ODA) accounting rules, and clarifying bank regulatory regimes. Current rules often require capital to be set aside at rates higher than expected defaults, making guarantees indistinguishable from loans of the same value.
• To mitigate currency risk, the roadmap suggests scaling the market creation capacity of TCX through additional capital and expanded blending programs. An investment of $5 billion would enable TCX to reach $60 billion in hedging capacity by 2025. Additionally, the report mentions the Just Environment Transition - Foreign exchange Investment Trust (JET-FIT) as a way to use SDR-backed guarantees to lower hedging costs in JETP countries.
• Addressing development risk involves scaling existing project development models and platforms to increase the volume of bankable projects in emerging markets and developing economies (EMDEs). Because project development typically costs 2-5% of total project costs, early-stage investments can achieve leverage of 20-50x.
• The report identifies a misalignment in MDB incentives, noting that in 2021, climate finance mobilization for low- and middle-income countries (LMICs) was only $13 billion compared to $51 billion of total climate finance. It proposes aligning staff performance and institutional targets to prioritize total investment volumes and private sector mobilization rather than institutional volumes.
• A proposed long-term reform for MDBs is the implementation of "originate-to-distribute" models. This would involve standardizing underwriting criteria and asset classes to allow MDBs to source and de-risk transactions, then bundle diversified projects into portfolios for securitization to attract more 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} }