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The Uganda Development Bank (UDB) has developed a Currency Risk-Sharing Facility (CRSF) to mitigate the foreign exchange (FX) risks associated with borrowing in hard currencies (USD/EUR) and lending in Ugandan shillings (UGX) for climate projects. The CRSF employs a layered risk-sharing approach, combining a partial hedge (e.g., currency swaps) with a tail-risk FX guarantee to protect against severe UGX depreciation beyond a dynamic threshold. Financial modeling indicates that the CRSF offers a more affordable and stable funding cost (average 9.82%) compared to full hedging (10.96%) or unhedged exposure (average 8.39% but highly volatile). The instrument is designed to be replicable for other public development banks in emerging markets and developing economies facing similar currency mismatches.

The report introduces the FX Hedging Facility, a customizable currency hedging product designed to mobilize foreign investment for renewable energy in India. By splitting currency risk into a user-absorbed range (0-4.5% annual depreciation) and a donor-subsidized tail risk range (4.5% to P99.7), the facility aims to reduce hedging costs by approximately 30% compared to commercial cross-currency swaps. The instrument eliminates counterparty credit and liquidity risk premiums through upfront donor payments and offers an upside benefit if currency depreciation is lower than expected. Analysis suggests a leverage factor of approximately 9, with a greater than 50% probability that the donor subsidy will be fully recovered.

The BDMG Regenerative Agriculture Fund is a blended finance instrument designed to overcome barriers to the adoption of regenerative agriculture (RA) in Minas Gerais, Brazil. It employs a tri-partite structure consisting of a credit guarantee fund to reduce collateral requirements, a technical assistance fund to bridge knowledge gaps, and a production support fund to buffer temporary income losses during the transition. The instrument specifically targets coffee, cattle, soybean, and corn producers, with a gender-equity focus providing higher guarantee coverage for women. The fund is currently moving from a design phase, supported by the FiCS Innovation Lab and Climate Policy Initiative, into a pilot implementation phase targeting an annual credit portfolio of BRL 10 million.

The Green Affordable Housing Finance instrument, piloted by Reall, aims to create a self-sustaining housing finance ecosystem for climate-smart affordable homes. It employs a dual-facility approach: an Enabling Environment Facility (EEF) providing technical assistance and construction finance to developers and lenders, and a Guarantee Facility to de-risk construction and mortgage loans. The instrument targets populations with low and informal incomes and requires all supported homes to meet industry standard green certification. During its five-year pilot in Kenya, the Guarantee Facility is expected to mobilize USD 37 million in lending, with a long-term scale-up goal of supporting over USD 400 million in local private loans over 15 years.

The Global Renewable Independent Power Supplier (Grips) is a proposed renewable energy service company designed to replace carbon-intensive diesel generators for industrial anchor clients in remote areas of developing countries. By utilizing an all-equity financing model and a diversified portfolio of hybrid energy plants, Grips aims to attract private-sector investment and offer shorter-term power purchase agreements (PPAs) that align with industrial planning horizons. The instrument targets a global off-grid diesel market estimated at 29 GW and seeks an initial USD 5 million for corporate governance and pilot project identification, with further requirements of USD 20-60 million for the first pilot location. Successful implementation is projected to avoid up to 2.5 million tonnes of CO2 per year through 2030.