Better Guarantees, Better Finance: Mobilising Capital for climate through fit-for-purpose guarantees

Year Published

2023

Contributing Organizations

Blended Finance Taskforce (BFT)

Systemiq

Type of Resource

Research/Insights Report

Languages

English

Relevant Topics

Core Topic

Project Finance

Topic 2

Guarantees

Target Audience

Banks

MDBs/DFIs

Asset Owners

Project Developers

Asset Managers

Relevant Geography

Global

Resource Description

This resource explores how guarantees can unlock private capital for climate action in emerging markets and developing economies (EMDEs), assessing barriers, current gaps, and reforms needed to scale their use.

Why This Matters

Guarantees are underused. Scaling them can unlock trillions in private climate finance for EMDEs, reduce risk perceptions, and accelerate investment in low-carbon growth.

Key Insights

EMDEs need ~$24 trillion annually by 2030, but less than 20% is currently flowing
MDBs mobilize only $030 of private finance per $1 of public climate finance; guarantees can mobilize 5x more but represent only 4% of MDB commitments
Recommends three actions: add climate mandates to public capital, expand guarantees at existing institutions, and create new global green guarantee facilities linked to project pipelines
A worked example shows $1 billion of grant funding for a global guarantee facility could mobilize $30 billion of private climate finance

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