Mobilizing Private Investment in Climate Solutions: De-risking Strategies of Multilateral Development Banks

This research paper by the World Resources Institute examines how Multilateral Development Banks (MDBs) can utilize de-risking mechanisms to mobilize private capital for low-carbon and climate-resilient development in developing countries. It analyzes the barriers to scaling these instruments and proposes strategies to enhance MDBs' roles as 'mobilizers' to close the climate investment gap.

• Multilateral Development Banks (MDBs) can mobilize private capital by reducing, transferring, or mitigating investment risks in developing countries, which helps close the climate investment gap and build trust between financiers and borrowers. De-risking occurs at two primary levels: the portfolio level, where risk is transferred to private investors, and the project level, where risk is shared with private investors through tools that manage regulatory and political risks.
• A significant barrier to scaling de-risking initiatives is the lack of data accessibility and transparency. While data on credit history and default probabilities in emerging markets exist, they are only available to a small number of MDBs and development finance institutions (DFIs), causing bottlenecks and delays in project design.
• The paper proposes four specific strategies for MDBs and financiers to scale de-risking operations: expanding financial innovation and learning with stakeholders (including developing country governments and DFIs), treating de-risking as a tool for entire sector transformation rather than single assets, fostering integrated institutional collaboration across MDB units, and increasing granular access to credit and default probability data.
• MDBs provide 'additionality'—specific financial and nonfinancial inputs not available from other sources—which is critical because, without MDB involvement, certain climate investments would not occur.

APA

World Resources Institute (n.d.). Mobilizing Private Investment in Climate Solutions: De-risking Strategies of Multilateral Development Banks. https://www.wri.org/research/mobilizing-private-investment-climate-solutions-mdbs

Chicago

World Resources Institute. Mobilizing Private Investment in Climate Solutions: De-risking Strategies of Multilateral Development Banks. n.d. https://www.wri.org/research/mobilizing-private-investment-climate-solutions-mdbs.

Wikipedia

{{cite report |author=World Resources Institute |title=Mobilizing Private Investment in Climate Solutions: De-risking Strategies of Multilateral Development Banks |url=https://www.wri.org/research/mobilizing-private-investment-climate-solutions-mdbs |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{worldresourcesinstitutendmobilizing, author = {{World Resources Institute}}, title = {{Mobilizing Private Investment in Climate Solutions: De-risking Strategies of Multilateral Development Banks}}, institution = {World Resources Institute}, url = {https://www.wri.org/research/mobilizing-private-investment-climate-solutions-mdbs}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }