A Systems Approach to Accelerating Climate Finance: Needs and Actor Analysis

The research identifies a sustainable infrastructure investment gap of USD 18-36 trillion in developing countries, with critical needs in power generation, transport, and water. It analyzes the roles of various public finance actors—including bilateral aid agencies, multilateral development banks (MDBs), and national development banks (NDBs)—highlighting a systemic mismatch where the largest mitigation potentials in upper-middle-income countries lack access to concessional finance. The paper argues for a shift from project-specific finance to financial system development and the scaling of blended finance and risk-mitigation instruments to crowd in private capital.

• The sustainable infrastructure investment gap across developing countries is estimated at USD 33 trillion until 2030, with the vast majority (USD 27 trillion) allocated to upper middle-income countries.
• Integrating climate resilience, adaptation, and mitigation costs results in an investment gap of USD 18-36 trillion, with the most significant needs in the water and sanitation, transportation, and power generation sectors.
• Analysis of 132 climate finance submissions reveals that 69% of proposed solutions utilize a fund concept, specifically blended structured finance vehicles, to address barriers.
• There is a significant gap in concessional finance access; of 21 emerging market countries with a USD 23 trillion climate investment opportunity, only 5 have access to the World Bank's International Development Association (IDA) concessional finance.
• Public climate finance flows are heavily skewed toward mitigation (71%), with renewable energy (37%) and transport (17%) as the primary sectors of focus.
• Bilateral aid agencies are characterized by a high risk appetite due to their grant-based funding, making them essential for first-of-their-kind initiatives and technical assistance in the poorest countries.
• Multilateral Development Banks (MDBs) have set ambitious targets to increase climate finance by 2020, such as the Asian Development Bank's goal to double its annual climate finance to USD 6 billion.
• National Development Banks (NDBs) provide the largest climate financing flows due to their domestic infrastructure mandates, but they often suffer from inadequate access to low-cost capital and risk mitigation tools.
• A systemic tension exists where grant and concessional funding is targeted toward the poorest countries, which often have lower climate change mitigation potential compared to larger emitters.
• The paper recommends that international public actors shift their focus from individual project finance toward the development of 'green' domestic financial systems in developing countries.

APA

Oliver, P., Tonkonogy, B., Wang, D., & Wang, X. (2018). A Systems Approach to Accelerating Climate Finance: Needs and Actor Analysis. Climate Policy Initiative. https://www.climatepolicyinitiative.org/wp-content/uploads/2018/03/Systems_Approach_to_Climate_Finance-Needs_Actors.pdf

Chicago

Oliver, Padraig, Bella Tonkonogy, David Wang, and Xueying Wang. A Systems Approach to Accelerating Climate Finance: Needs and Actor Analysis. Climate Policy Initiative, 2018. https://www.climatepolicyinitiative.org/wp-content/uploads/2018/03/Systems_Approach_to_Climate_Finance-Needs_Actors.pdf.

Wikipedia

{{cite report |last1=Oliver |first1=Padraig |last2=Tonkonogy |first2=Bella |last3=Wang |first3=David |last4=Wang |first4=Xueying |title=A Systems Approach to Accelerating Climate Finance: Needs and Actor Analysis |publisher=Climate Policy Initiative |date=March 2018 |url=https://www.climatepolicyinitiative.org/wp-content/uploads/2018/03/Systems_Approach_to_Climate_Finance-Needs_Actors.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{oliver2018systems, author = {Oliver, Padraig and Tonkonogy, Bella and Wang, David and Wang, Xueying}, title = {{A Systems Approach to Accelerating Climate Finance: Needs and Actor Analysis}}, institution = {Climate Policy Initiative}, year = {2018}, month = mar, url = {https://www.climatepolicyinitiative.org/wp-content/uploads/2018/03/Systems_Approach_to_Climate_Finance-Needs_Actors.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }