From Risk to Reward: Unlocking Private Capital for Climate and Growth

The report argues that EMDEs require $2.4 trillion annually by 2030 to meet climate targets, but current flows are severely inadequate. It identifies a critical gap in adaptation finance and a reliance on debt over equity. To unlock private capital, the authors propose improving project bankability, increasing data transparency, mobilizing local capital, streamlining risk-sharing, enhancing policy certainty, and scaling equity structures.

• Emerging markets and developing economies (EMDEs) face a massive climate finance gap, requiring $2.4 trillion per year by 2030, with $1 trillion needed from external sources, primarily private finance.
• Private climate finance is heavily skewed toward mitigation, which received 96% of total flows in 2023, while adaptation accounted for only 1%. This is driven by the predictable cashflows of clean energy and transport compared to the non-monetizable outcomes of adaptation projects.
• Investment is geographically concentrated, with Latin America & Caribbean, Central Asia & Eastern Europe, and South Asia receiving the majority of private climate finance, leaving Sub-Saharan Africa and East Asia (excluding China) critically underfunded.
• Domestic private finance is the primary driver of climate investment in EMDEs, accounting for 81% of all private climate finance in 2023, though local capital markets remain shallow.
• Institutional investors are significantly underrepresented in EMDE climate finance (1% of 2023 flows) because projects are often too small or fragmented to meet their minimum ticket size requirements, typically $20-50 million.
• Data gaps and a lack of bankable project pipelines are the top barriers for investors; 44% of surveyed investors identified access to bankable pipelines as the most critical data need.
• The report proposes six priority areas to unlock capital: improving access to bankable pipelines, increasing data transparency, mobilizing local capital, streamlining risk-sharing mechanisms, improving policy/regulatory certainty, and scaling equity investment structures.
• There is a critical need to shift from debt-heavy financing to equity; in 2023, total climate finance in EMDEs was 65% debt and 30% equity, with a lack of 'patient capital' and clear exit options hindering equity flows.
• Article 6 of the Paris Agreement is identified as a transformative tool to channel cost-effective capital into EMDEs through international carbon markets, provided that high-integrity standards and national frameworks are established.

APA

World Economic Forum (2025). From Risk to Reward: Unlocking Private Capital for Climate and Growth. https://reports.weforum.org/docs/WEF_Risk_to_Reward_2025.pdf

Chicago

World Economic Forum. From Risk to Reward: Unlocking Private Capital for Climate and Growth. 2025. https://reports.weforum.org/docs/WEF_Risk_to_Reward_2025.pdf.

Wikipedia

{{cite report |author=World Economic Forum |title=From Risk to Reward: Unlocking Private Capital for Climate and Growth |date=November 2025 |url=https://reports.weforum.org/docs/WEF_Risk_to_Reward_2025.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{worldeconomicforum2025from, author = {{World Economic Forum}}, title = {{From Risk to Reward: Unlocking Private Capital for Climate and Growth}}, institution = {World Economic Forum}, year = {2025}, month = nov, url = {https://reports.weforum.org/docs/WEF_Risk_to_Reward_2025.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }