Finance for Sustainable Development Program Concept note

The Stockholm Environment Institute's (SEI) Finance for Sustainable Development (FSD) Program, established in 2022, focuses on bridging the gap between micro-level business viability and macro-level climate and development finance policies. The program specifically targets low- and lower-middle-income countries (LLMICs) to identify how sustainable projects can generate private economic value and attract private-sector investment through research, advisory services, and training.

• The FSD Program employs a two-pronged approach to increase sustainable finance in low- and lower-middle-income countries (LLMICs). It generates micro-level insights into the characteristics that make sustainable projects viable on the ground and uses these to inform macro-level policies on climate and development finance.
• Current research and discussions on climate finance have predominantly focused on the supply side (availability and accessibility of capital), while the FSD Program emphasizes the demand side—the sustainable economic activities seeking to access and use that finance.
• Blended-finance instruments, such as guarantees, insurance, and currency risk instruments, are analyzed by the program for their ability to realign risk and reward parameters to make sustainable development projects more attractive to private investors.
• Progress in leveraging private profit-seeking finance for sustainable activities has been limited; in 2021, private finance mobilized through blended finance was USD 40 billion, which represents approximately 1% of the required amount.
• The program's theory of change posits that underinvestment in socially desirable sustainable activities, such as clean energy and sustainable transport, is a market failure that can be corrected through practical interventions like concessional lending, carbon pricing, and fiscal policy.
• The FSD Program maintains a diverse project portfolio, including ongoing research on risk-mitigation for utility-scale renewable energy in sub-Saharan Africa (2022–2025) and the financial modeling of an archetypal green steel project in a developing country (2023–2024).

APA

Duma, D. (2024). Finance for Sustainable Development Program Concept note. Stockholm Environment Institute. https://www.sei.org/wp-content/uploads/2023/05/finance-for-sustainable-development-program.pdf

Chicago

Duma, Daniel. Finance for Sustainable Development Program Concept note. Stockholm Environment Institute, 2024. https://www.sei.org/wp-content/uploads/2023/05/finance-for-sustainable-development-program.pdf.

Wikipedia

{{cite report |last1=Duma |first1=Daniel |title=Finance for Sustainable Development Program Concept note |publisher=Stockholm Environment Institute |date=June 2024 |url=https://www.sei.org/wp-content/uploads/2023/05/finance-for-sustainable-development-program.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{duma2024finance, author = {Duma, Daniel}, title = {{Finance for Sustainable Development Program Concept note}}, institution = {Stockholm Environment Institute}, year = {2024}, month = jun, url = {https://www.sei.org/wp-content/uploads/2023/05/finance-for-sustainable-development-program.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }