Search Climate Insights Directory

This report analyzes the role of risk mitigation and transfer instruments in utility-scale renewable energy investments across East Africa, utilizing six case studies from Burundi, Djibouti, Uganda, and Kenya to identify how these tools facilitate the transition from project development to financial close.

This report by the Green Guarantee Group (GGG) provides a roadmap to scale the use of green guarantees to mobilize private capital for climate action in emerging markets and developing economies (EMDEs). It identifies systemic barriers—including regulatory constraints under the Basel Framework, currency risks, and data gaps—and proposes four primary recommendations to optimize guarantees as a catalytic investment tool to help meet global climate finance targets.

This policy brief by the Climate Policy Initiative (CPI) examines the role of green guarantees in mobilizing private capital for the climate transition in emerging markets and developing economies (EMDEs). It identifies key structural barriers—including complexity, lack of technical assistance, high costs, and time horizon misalignments—and presents case studies of innovative solutions from organizations such as the World Bank Group, Green Guarantee Company, TCX, GuarantCo, and a partnership between Sida and IFU.

This report, prepared for the G20 Sustainable Finance Working Group, analyzes 12 case studies of blended finance instruments designed to overcome barriers to investment in Nature-based Solutions (NbS). It explores how a combination of concessional capital, technical assistance, and risk-mitigation tools like guarantees can mobilize private investment across sectors including restoration, conservation, bioeconomy, agroforestry, and ocean/water management.

The Climate Policy Initiative (CPI) conducted a scoping analysis of cross-border guarantee instruments to understand their role in mobilizing private climate finance for emerging markets and developing economies (EMDEs). The study identified 52 instruments from 34 entities, finding that while guarantees are powerful tools for leveraging finance, the current landscape is fragmented, predominantly focused on debt and commercial risks, and lacks a strong emphasis on climate-exclusive mandates.

This report by the Climate Policy Initiative (CPI) maps the landscape of cross-border guarantees used to mobilize private capital for climate finance in emerging markets and developing economies (EMDEs). Through a scoping analysis of 52 guarantee instruments from 34 entities, the report identifies a fragmented landscape dominated by debt-focused, climate-agnostic products that primarily cover commercial risks. It highlights significant gaps in coverage for low-income countries, equity investments, and political and currency risks, while providing recommendations for future research to scale these tools to meet the estimated USD 2.4 trillion annual need for green transitions in EMDEs.

This research paper proposes a Global Credit Guarantee Facility (GCGF) to reduce the high cost of capital for renewable energy projects in developing economies, outlining three funding scenarios and their potential impact on risk premia and credit ratings.

The Capital Mobilization Roadmap is a discussion draft by the Climate Policy Initiative (CPI) that outlines pathways to mobilize private capital for climate and development priorities. It focuses on four high-impact areas: reducing credit risk through purposeful guarantees, mitigating currency risk via market creation and local currency lending, scaling project development models to reduce development risk, and reforming Multilateral Development Bank (MDB) incentives to prioritize private sector mobilization over institutional volumes.

This research paper by the Climate Policy Initiative (CPI) examines the disparity between solar energy potential and installed capacity in developing economies, attributing the gap to high costs of capital driven by sovereign and off-taker risks. The authors propose the establishment of a Global Credit Guarantee Facility (GCGF) to de-risk cross-border financing and lower risk premiums for renewable energy projects in Emerging Market & Development Economy (EMDE) countries.

This report examines the use of risk mitigation and transfer (RMT) instruments to enable utility-scale renewable energy investments in the Southern Africa Development Community (SADC). Through case studies in Malawi, Mozambique, Namibia, and Zambia, the authors analyze how financial instruments from development finance institutions (DFIs) help projects reach financial close by addressing offtaker, political, and currency risks. While RMTs have successfully protected existing projects during recent economic shocks, the report finds they are currently insufficient to enable new projects in countries facing severe debt distress, such as Zambia.

This research paper examines the role of the Swedish finance sector in sustainability transitions, concluding that the sector is unlikely to lead the transition without significant government intervention to mitigate risk.

This case study describes a USD 2.25 million credit guarantee scheme (CGS) established by the Common Fund for Commodities (CFC) and the Rabobank Foundation to increase commercial loan access for smallholder coffee farmers and cooperatives in Ethiopia.

This policy brief by the South African Institute of International Affairs examines the role of green financing and blended finance in scaling renewable energy across Africa, using Kenya as a primary case study to illustrate how public and private capital can be combined to meet rising energy demands and climate commitments.

This policy brief assesses the Africa Energy Guarantee Facility (AEGF), a risk mitigation instrument launched by the European Investment Bank to attract private investment into Africa's sustainable energy sector. While the AEGF aims to unlock $1.4 billion in clean energy investment by providing insurance against political and sovereign risks, the document argues that its success depends on African policymakers creating enabling regulatory frameworks and reducing the high transaction costs and risks that currently deter private investors.

This research paper examines the role of innovative risk finance, specifically insurance, in overcoming barriers to geothermal power development in Kenya and Ethiopia. It details a project by Parhelion, funded by the Climate and Development Knowledge Network (CDKN), which provided technical training to local stakeholders to increase the use of risk mitigation instruments and leverage private sector capital.

The Energy Efficiency Enabling Initiative is a proposed private equity fund designed to mobilize private investment in energy efficiency, particularly in emerging economies, by using donor-backed concessional equity and risk mitigation instruments to address the current funding gap.

This report by the Climate Policy Initiative (CPI) analyzes the role of public finance in accelerating geothermal energy deployment in developing countries. Based on case studies from Turkey, Kenya, and Indonesia, the report demonstrates that public risk-mitigation measures can reduce the levelized cost of electricity (LCOE) and allow governments to achieve electricity generation goals while spending only 15-35% of the resources required for sole public ownership.

This case study examines the financial structure of the 250MW Bujagali Hydropower Project in Uganda to analyze how risk mitigation instruments from public financial institutions, specifically the World Bank Group, can mobilize private capital for low-carbon infrastructure in high-risk environments.

This case study examines the Sarulla Geothermal Power Plant (GPP) in Indonesia, highlighting how public risk mitigation tools, including guarantees and feed-in tariffs, enabled significant private sector investment in a project designed to be the world's largest single contract geothermal plant with a 330MW capacity by 2018.

This case study examines the Olkaria III geothermal power plant in Kenya, the first privately funded and developed geothermal project in Africa. It analyzes how a combination of public sector risk mitigation, phased development, and international development finance enabled a private developer, Ormat Technologies, to successfully deploy a 110 MW binary plant. The document highlights the role of the Kenyan government in reducing exploration and credit risks to attract private capital and provides lessons for scaling geothermal energy in East Africa.