Effective Green Financing: What have we learned so far?

The report analyzes how public resources and well-articulated policies can mitigate risks and costs to attract private capital for green investments. Using case studies from Tunisia, the UK, and Morocco, it demonstrates that targeted public interventions—such as credit guarantees, feed-in tariffs, and concessional lending—can overcome market inertia and perceived risks. It highlights the importance of emerging economies, particularly the role of National Development Banks in China and Brazil, and suggests innovative risk mitigation tools like policy risk insurance and first-loss protection to address gaps in the current financial landscape.

• Well-designed public policies are essential to make green investments viable by overcoming real and perceived risks, allowing public interventions to improve project economics enough to attract private investment at scales that impact emissions.
• Public policies can deliver finance either indirectly, by altering cost-return balances through instruments like Feed-in Tariffs and carbon taxes, or directly, through equity investments, concessional loans, and guarantees that assume significant financial risks.
• The Prosol program in Tunisia demonstrated that renewable energy policies can offset the economic loss of fossil fuel subsidies; the program's shift away from liquefied petroleum gas (LPG) systems saved the Tunisian government USD 15.2 million between 2005 and 2010, with projected total savings of USD 101 million over the lifespan of the solar water heaters.
• The Walney Offshore Windfarms project in the UK utilized a policy framework including Renewable Obligation Certificates, which provided over 60% of projected future revenues over 20 years, enabling the project to attract GBP 1.3 billion in private investment.
• The Ouarzazate I CSP plant in Morocco illustrates the necessity of public resources to cover early development and operation costs for immature technologies; international concessional funding reduced levelized costs by 25-30%.
• Emerging economies are critical for green investment growth, with National Financing Institutions (NFIs) and National Development Banks (NDBs) playing a dominant role; in 2011, NFIs spent approximately USD 42.7 billion, with the Brazilian National Development Bank (BNDES) and the Chinese Development Bank (CDB) contributing over 80% of that total.
• In 2011, China, Brazil, and India were the primary recipients of global mitigation-directed climate finance, receiving USD 121 billion, which represented nearly 33% of the total flows.

APA

Buchner, B. K., Heller, T. C., & Wilkinson, J. (2012). Effective Green Financing: What have we learned so far? Climate Policy Initiative. https://www.climatepolicyinitiative.org/wp-content/uploads/2012/12/Effective-Green-Financing-What-have-we-learned-so-far.pdf

Chicago

Buchner, Barbara K., Thomas C. Heller, and Jane Wilkinson. Effective Green Financing: What have we learned so far? Climate Policy Initiative, 2012. https://www.climatepolicyinitiative.org/wp-content/uploads/2012/12/Effective-Green-Financing-What-have-we-learned-so-far.pdf.

Wikipedia

{{cite report |last1=Buchner |first1=Barbara K. |last2=Heller |first2=Thomas C. |last3=Wilkinson |first3=Jane |title=Effective Green Financing: What have we learned so far? |publisher=Climate Policy Initiative |date=December 2012 |url=https://www.climatepolicyinitiative.org/wp-content/uploads/2012/12/Effective-Green-Financing-What-have-we-learned-so-far.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{buchner2012effective, author = {Buchner, Barbara K. and Heller, Thomas C. and Wilkinson, Jane}, title = {{Effective Green Financing: What have we learned so far?}}, institution = {Climate Policy Initiative}, year = {2012}, month = dec, url = {https://www.climatepolicyinitiative.org/wp-content/uploads/2012/12/Effective-Green-Financing-What-have-we-learned-so-far.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }