Public Financing Instruments to Leverage Private Capital for Climate-Relevant Investment

The paper analyzes the use of public financing instruments by the World Bank Group, GEF, and CTF to identify ways to increase private sector investment in climate projects in developing countries. It recommends expanding the use of equity and guarantees, targeting grants to poorer countries and new technologies, and addressing institutional barriers such as streamlined fee structures and improved internal coordination.

• Public actors and international mechanisms should diversify and tailor their financing instruments beyond loans to include equity and guarantees to mitigate private sector risks across different geographies.
• Grant support should be strategically targeted toward markets with the most challenging access to finance, specifically poorer countries with weak financial markets and new technologies that lack immediate commercial returns.
• The Green Climate Fund requires flexible capitalization from developed governments, including a reasonable amount of grant funding for its Private Sector Facility, to enable a diverse suite of instruments like loans, equity, and de-risking tools to mobilize private capital.
• Institutional barriers to private investment should be addressed by improving internal coordination, creating employee incentives for private sector participation, streamlining transaction processing and fee structures, and enhancing data transparency.

APA

World Resources Institute (n.d.). Public Financing Instruments to Leverage Private Capital for Climate-Relevant Investment. https://www.wri.org/research/public-financing-instruments-leverage-private-capital-climate-relevant-investment

Chicago

World Resources Institute. Public Financing Instruments to Leverage Private Capital for Climate-Relevant Investment. n.d. https://www.wri.org/research/public-financing-instruments-leverage-private-capital-climate-relevant-investment.

Wikipedia

{{cite report |author=World Resources Institute |title=Public Financing Instruments to Leverage Private Capital for Climate-Relevant Investment |url=https://www.wri.org/research/public-financing-instruments-leverage-private-capital-climate-relevant-investment |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{worldresourcesinstitutendpublic, author = {{World Resources Institute}}, title = {{Public Financing Instruments to Leverage Private Capital for Climate-Relevant Investment}}, institution = {World Resources Institute}, url = {https://www.wri.org/research/public-financing-instruments-leverage-private-capital-climate-relevant-investment}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }