The State of Green Banks 2025

The report examines the role of green banks in bridging the USD 7.4 trillion annual climate funding gap. It identifies four main structures: standalone de novo banks, enhanced public development banks (PDBs), green facilities within PDBs, and country platforms. While standalone banks are more common in advanced economies, EMDEs frequently utilize green facilities as transitional mechanisms. The report emphasizes that success depends on financial, environmental, and political sustainability, and proposes three international support options: a new design initiative, expanding the FiCS Innovation Lab, or forming a coalition of existing initiatives.

• Green banks are categorized into four primary models based on a country's fiscal and institutional capacity: standalone de novo banks, enhancing existing public development banks (PDBs), creating green facilities within PDBs, and establishing green country platforms.
• There is a distinct geographic divide in the adoption of green bank models; standalone institutions are more prevalent in developed countries, whereas EMDEs more commonly adopt green finance facilities within existing PDBs.
• The sustainability and success of green banks rely on three pillars: financial sustainability (leveraging public funds to catalyze private finance), environmental sustainability (adhering to climate taxonomies and ESG/MRV standards), and political sustainability (alignment with national climate strategies and robust governance).
• While debt remains the primary financial instrument used by green banks, there is an increasing trend toward diversifying into credit enhancements, guarantees, and technical assistance to better leverage private capital.
• Investment patterns show a continued focus on commercial and residential solar and energy efficiency, but there is growing interest in low-emission transport, while sectors like sustainable agriculture and forestry remain underinvested.
• The US Greenhouse Gas Reduction Fund (GGRF), a USD 27 billion program, demonstrates a model for capitalizing green banks by providing grants to national, state, and local entities and community lenders to mobilize private capital.
• International support for green bank development in EMDEs could be implemented through three options: a new green bank accelerator, expanding the FiCS Innovation Lab, or forming a coalition of existing initiatives like the Green Bank Network.

APA

Tandon, G., Mitra, D., Khanna, N., First, J., Buchner, B., Sims, D., Elizondo, I., & Granoff, I. (2025). The State of Green Banks 2025. Climate Policy Initiative. https://www.climatepolicyinitiative.org/wp-content/uploads/2025/04/The-State-of-Green-Banks-2025.pdf

Chicago

Tandon, Gauri, Debal Mitra, Neha Khanna, Jonathan First, Barbara Buchner, Douglass Sims, Isabelle Elizondo, and Ilmi Granoff. The State of Green Banks 2025. Climate Policy Initiative, 2025. https://www.climatepolicyinitiative.org/wp-content/uploads/2025/04/The-State-of-Green-Banks-2025.pdf.

Wikipedia

{{cite report |last1=Tandon |first1=Gauri |last2=Mitra |first2=Debal |last3=Khanna |first3=Neha |last4=First |first4=Jonathan |last5=Buchner |first5=Barbara |last6=Sims |first6=Douglass |last7=Elizondo |first7=Isabelle |last8=Granoff |first8=Ilmi |title=The State of Green Banks 2025 |publisher=Climate Policy Initiative |date=April 2025 |url=https://www.climatepolicyinitiative.org/wp-content/uploads/2025/04/The-State-of-Green-Banks-2025.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{tandon2025state, author = {Tandon, Gauri and Mitra, Debal and Khanna, Neha and First, Jonathan and Buchner, Barbara and Sims, Douglass and Elizondo, Isabelle and Granoff, Ilmi}, title = {{The State of Green Banks 2025}}, institution = {Climate Policy Initiative}, year = {2025}, month = apr, url = {https://www.climatepolicyinitiative.org/wp-content/uploads/2025/04/The-State-of-Green-Banks-2025.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }