How to Reach $300 Billion — and the Full $1.3 Trillion — Under the New Climate Finance Goal margaret.overh… Thu, 02/20/2025 - 13:31

Nations set a new climate finance goal last year, committing to deliver at least $300 billion annually for developing countries' climate action by 2035. Developed nations agreed to take the lead in meeting this target.

The goal, known as the new collective quantified goal, or NCQG, also includes a much larger target. It calls on all actors to work toward mobilizing $1.3 trillion in international climate finance over the same timeframe; much closer to the amount developing countries truly need.

This finance, alongside their domestic finance, is essential for developing countries to adopt low-carbon technologies, protect themselves from climate threats and unleash green development. But it doesn't benefit only them: Stronger action in the developing world is needed to halt climate change and invest in sustainable growth globally. It's about building a safer and more prosperous future for everyone.

We delved into the new finance goal, including what it will take to reach the $300 billion threshold — and what moving beyond it, toward $1.3 trillion, could look like.

Is the New Climate Finance Goal Enough?

The NCQG's $300 billion target is the largest climate finance commitment countries have ever agreed to and represents an important down payment for climate action. Meeting it will be a critical milestone. But finance cannot stop there.

The High Level Expert Group on Climate Finance (IHLEG) estimates developing countries (excluding China) need to spend $2.7 trillion annually by 2030 to meet climate and nature-related goals. $1.4 trillion of this would come from domestic sources and $1.3 trillion from abroad.

$1.3 trillion is therefore a more accurate reflection of developing countries' needs by 2035, and so the more important target. But of course, it is the much larger hill to climb. Important, too, is understanding how and where funds are likely to flow.

Is $300 Billion Achievable?

In short, yes. Though current political headwinds make it more difficult, achieving the goal remains possible.

In 2022, the latest data available, developed countries delivered around $116 billion to developing countries for climate action. This exceeded the previous climate finance goal of $100 billion annually, which the NCQG replaces. We reviewed the sources of this finance, looking at how funding trends are likely to grow over the next decade, and found that $300 billion by 2035 is very much in reach.

How this money is raised, though, could have implications for the type of finance made available and who can access it most easily.

Where Would the Money Come From?

We can generally assume that similar types of finance will be counted toward the $300 billion goal as were counted toward the $100 billion goal. This would include bilateral finance (country to country), multilateral finance (such as from multilateral development banks (MDBs) and multilateral climate funds), and private finance mobilized by public funds. Under the NCQG, there's also a possibility to count "alternative sources" of climate finance, such as international taxes or rechanneled IMF "special drawing rights" (a type of international reserve asset).

Moving beyond $300 billion, toward $1.3 trillion, will require much more private investment in climate action than we've seen to date in addition to increases from the sources above.

Public multilateral finance is the biggest source

Public multilateral finance involves public funds going from one country to another through a multilateral entity, like a development bank. This category represents the highest share of international climate finance so far — $51 billion of the $116 billion delivered in 2022 — and will likely continue to do so.

Multilateral development banks

MDBs like the World Bank provide a significant portion of international climate finance, and there are many ideas on the table for how to further supercharge their efforts.

At COP29, MDBs committed to providing $120 billion in climate finance to low- and middle-income countries by 2030; roughly double what they provided in 2022. Part of this growth is likely intended to come from an increase in the percentage of their funding going to climate action. And part will come from continued growth in total MDB finance, largely as a result of reforms to free up capital.

Additional growth is possible — especially if countries pay in more capital, increasing the base amount against which MDBs can lend. While such increases may be unlikely today with current political dynamics, they could feasibly happen before 2035. The IHLEG estimates that $60 billion in capital increases over a ten-year period could bring MDB climate and nature-related finance up to around $240 billion per year. This figure refers to growth across the entire MDB system, encompassing a range of banks and funds with varied shareholder structures.

Some of the increase in MDB climate finance will also come from a change in the way their contributions are counted. Under the $100 billion goal, only 70% of MDB's total climate finance was included in the tally. This is because not all countries channeling climate finance through MDBs were considered contributors to the goal. But any country can voluntarily contribute to the $300 billion — meaning potentially all climate finance flowing from MDBs to low- and middle-income countries could be counted.

If MDBs meet their 2030 target of $120 billion, this would comprise 40% of the $300 billion goal. This is around the same percentage the MDBs provided toward the $100 billion goal in 2022 (41%). If they could reach $240 billion, per the IHLEG's estimate, this would cover 80%.

People navigate heavily flooded streets in Sylhet, Bangladesh in June 2024. International climate finance helps countries build resilience to and cope with the aftermath of worsening disasters. Photo by H M Shahidul Islam/iStock

Private finance mobilized by MDBs

MDBs also announced that they would leverage $65 billion in private finance for climate action in developing countries by 2030, up from around $15 billion in 2022. There are a variety of ways they can do this, such as offering guarantees or insurance on climate projects to lower risks and attract private investors.

The $65 billion assumes that MDBs can leverage 54 cents in private finance for every $1 they spend (a mobilization ratio of 1:0.54) and meet their $120 billion goal. For comparison, they mobilized 38 cents per dollar spent in 2023 (a 1:0.38 ratio).

If MDBs deliver $240 billion in climate finance by 2030, they could mobilize as much as $91-$130 billion annually in private funds (reflecting a 1:0.38 and 1:0.54 ratio, respectively).

Multilateral climate funds

Multilateral climate funds, such as the Green Climate Fund and Adaptation Fund, are specifically dedicated to providing climate finance in developing nations and are financed primarily through governments pledges. Historically they've made up a very small proportion of international climate finance: just $3.4 billion (3%) in 2022, down from $4.2 billion in 2021.

Despite their modest size, the climate funds are valued by many for allowing direct access to developing country institutions. They also provide a higher rate of grants and highly concessional financing (loans with more favorable terms) than other sources. Between 2016 and 2022, 54% of finance from the climate funds came in the form of grants, compared to 39% of bilateral finance and 9% for the MDBs.

At the 2024 UN climate summit (COP29), countries agreed to at least triple the amount these funds disburse by 2030. This would require wealthy countries to significantly increase their contributions. If tripled, the funds would provide around $10 billion annually by 2030, or less than 4% of the $300 billion, with additional growth possible by 2035.

Public bilateral finance has grown, but faces political headwinds

Bilateral finance involves public funds directed from one country to another. In 2022, bilateral finance accounted for $41 billion (35%) of the $116 billion provided and mobilized.

The amount of bilateral finance needed will hinge on what other sources deliver:

• If MDBs reach their stated target of $120 billion and mobilize $65 billion in private finance, and if the multilateral climate funds cover $10 billion, this leaves a gap of $105 billion for bilateral institutions to fill.
• If MDB finance instead reaches the higher estimate of $240 billion, at current private sector mobilization rates, we could exceed the $300 billion target without any bilateral funds.

Bilateral climate finance doubled between 2013 and 2022, from $22.5 billion to $41 billion. If another doubling occurs by 2035, as called for by the IHLEG, bilateral finance would reach around $80 billion. But there's no guarantee of this: With strong political headwinds against international climate and development finance in many developed nations, significant growth in bilateral finance may be challenging — though the ten-year window leaves room for political cycles to turn.

Economic growth can help increase overseas development assistance to a degree, especially in countries like Denmark, where it is tied to gross national income (GNI). If we assume increases in bilateral finances of just 2% to follow an estimated 2% annual growth in GNI, it will reach a relatively modest $53 billion by 2035. It is also possible that some developing nations will increase and voluntarily report finance as part of the efforts to reach $300 billion.

Private finance mobilized by bilateral public finance

In 2022, developed countries reported that they mobilized $9.2 billion in private finance for climate action in developing countries. With bilateral finance reaching $41 billion that year, this implies a mobilization ratio of 22 cents per dollar spent.

Unlike the MDBs, countries have not stated a new target for mobilized private finance. If we assume bilateral finance reaches $53 billion in 2035 (a 2% annual growth rate), the same rate of mobilization as in 2022 would result in $11.7 billion by 2035. If bilateral finance were to double to $80 billion by 2035, the same mobilization rate could leverage $17.6 billion in private finance.

Solar-powered chargers for electric motorbikes in Kigali, Rwanda. Climate finance supports green projects that can help developing countries improve lives and sustainably grow their economies. Photo by IMF Photo/Kim Haughton/Flickr Alternative sources can now be counted, too

In addition to multilateral and bilateral finance, the NCQG recognizes "alternative sources" — such as international taxes or solidarity levies — as a potential option for raising finance toward the $300 billion goal.

Some experts have suggested a tax on international flights, applied to airlines based on greenhouse gas emissions, or wealth taxes as ways to raise finance for climate action. These measures are attractive in part because they could introduce entirely new funding streams. The IMF estimates that a carbon tax on international transportation emissions could bring in up to $200 billion per year, which could then in theory be disbursed as international climate finance.

Another option is rechanneling the IMF's special drawing rights, which are a type of international reserve. In 2022, nations with larger economies agreed to reallocate special drawing rights to developing countries. So far, this has resulted in around $40 billion in finance being distributed through the Resilience and Sustainability Trust, which mainly helps low-income and vulnerable middle-income countries tackle climate risks. Countries have also agreed to re-channel special drawing rights through MDBs and use them as hybrid capital. Moving forward, countries could agree to reallocate additional special drawing rights and modernize the framework to allow for more regular issuances — though governments currently appear reluctant to take this step.

High integrity, well-managed carbon markets also channel funds for developing nations' climate action, in theory. But the idea of counting these investments toward the NCQG is highly controversial, since any emissions reductions are claimed by the buyer (meaning they don't count toward the developing country's own climate goals). Governments have agreed that the Adaptation Fund (one of the climate funds) will receive a 5% share of proceeds under the Paris Agreement's international carbon crediting mechanism. But it remains to be seen whether this will count toward the $300 billion goal.

How Will Finance Be Delivered?

The NCQG is not just about the amount of finance developing countries receive, but also the type.

How finance is delivered matters immensely. Many of the poorest countries are already struggling with unsustainably high debt levels and cannot afford to take on new, high-interest-rate loans, even for climate projects which can aid their growth and reduce risks. They may require a higher proportion of grants or highly concessional funding — meaning loans with, for example, low interest rates and/or longer repayment periods. (This can be useful in the context of a more systematic approach to debt restructuring and relief.) In other countries, and in sectors where an economic or financial return is expected, loans and private finance can be a more appropriate investment type.

While the NCQG noted that grant-based and highly concessional finance is particularly important "for adaptation and responding to loss and damage in developing countries," it fell short of setting concrete targets for this.

In 2022, around 39% of bilateral and 9% of multilateral climate finance came in the form of grants, which mainly went to low-income countries. Between 2016 and 2022 these countries received 64% of their climate finance in grants, compared to around 12% for middle-income countries.

Going forward, even maintaining the current percentage of climate finance that is provided as grants or highly concessional finance will require concerted effort. Much of the growth in MDB finance, for example, is likely to come from reforms and capital increases that tend to boost lending to middle-income countries, not grants to low-income countries.

Similarly, if a larger portion of the $300 billion comes from mobilized private finance — as predicted by the MDBs — this will tend to flow through private loans or equity investments, not grants or highly concessional finance.

Who Will Receive the Funds?

International climate finance is meant exclusively for developing countries, but this is a broad and diverse group of nations. Who exactly will receive finance, and how much, was not laid out in the NCQG — though the final text did recognize that small island developing states and least developed countries are particularly in need of assistance, especially for adaptation and loss and damage.

In 2022, lower-middle income countries received 46.5% of reported climate finance, upper middle-income countries received 34.5%, and low-income countries received just 11.1%. A small number of high-income countries received 3.4% of the financing, and 20.4% of the funds were not allocated by income group. (Some developing countries classified as high-income may receive investments because they are highly vulnerable to the effects of climate change, such as small island states like Antigua and Barbuda and Barbados.)

Although climate finance approximately doubled between 2016 and 2022, its distribution across these income groups has stayed relatively constant. But major shifts in funding sources could potentially upend precedent. For example, if the growth in MDB finance is largely through non-concessional loans, this will tend to favor middle income rather than low-income countries. The same is true of mobilized private finance if it ends up playing a larger role. Only 3% of mobilized private finance counted in 2022 went to low-income countries.

Ultimately, the overall percentage of finance received is less important than how favorable the rates and terms are — or the share of finance on "grant equivalent" terms (meaning the amount that would have been provided if the finance was a grant, before taxes or other charges). Middle income countries will likely continue to receive the most finance overall, given the size and relative strength of their economies and the larger ticket sizes of low carbon investments there. What is important is that the lowest income and most vulnerable countries receive a good share of the grant and highly concessional finance, especially for adaptation and loss and damage.

How Do We Move from $300 Billion to $1.3 Trillion — the Real Target?

While $300 billion should be within reach, the real challenge will be how to scale up finance "from all public and private sources to at least $1.3 trillion per year by 2035" — the truer measure of what developing countries need.

Clearly, meeting the $1.3 trillion target will be a steep climb. Funding will need to come from the same sources listed above, as well as private financial flows not mobilized by public funds. The latest IHLEG report suggests that around half of the $1.3 trillion, or $650 billion, will come from cross-border private finance and the other half from international public funds.

Raising that amount of public funding will require much more ambition from wealthy nations and significant capital increases at the MDBs. In addition, countries will likely need to forge new international actions and agreements to leverage "alternative" sources of finance like international taxes, with a significant proportion of the funds dedicated to climate action in developing nations.

Growing private finance will also be a challenging — but vital — feat. While current data on cross-border climate investment in developing countries is limited, and estimates vary, $650 billion is almost certainly a massive leap from the present. Climate Policy Initiative (CPI) estimates that private climate finance to developing nations (excluding China) reached around $15 billion in 2022. UN Trade and Development (UNCTAD) estimates that foreign private investments just in renewable energy in least-developed countries reached $16 billion that same year.

Workers from a German-Filipino solar energy company install panels at a house in Quezon City, Philippines. International climate finance is an important source of funds for renewable energy and other green projects in low- and middle-income countries. Photo by IMF Photo/Lisa Marie David/Flickr

Substantially increasing private finance for developing nations will require efforts from high-, middle-, and low-income countries alike. Governments wanting to attract private sector investment need to set ambitious targets and transition plans, enhance investment environments, and work together with the private sector to develop investment opportunities and shift risk perceptions. From the financier side, it will be important to drive forward measures such as scaling up and replicating effective risk sharing and credit enhancement mechanisms, tapping into long term institutional investment, and increasing the role of national development banks and local currency.

"Country platforms" which bring public, private, domestic and international finance together behind green transition plans and policies, can play a role in mobilizing private finance and ensuring an efficient capital stack.

How Will Progress Be Measured?

Countries have decided to adopt the enhanced transparency framework under the UN Framework Convention on Climate Change (UNFCCC) as the transparency system for the new finance goal. Through this system, countries will report on the finance they provide and receive and what it's used for. In addition, the UNFCCC's Standing Committee on Finance will prepare a "collective progress" report biennially to reflect on progress to date, drawing on a variety of sources.

But questions remain; particularly around how the $1.3 trillion target will be monitored, as it covers an array of funding sources that will not be reported through the UNFCCC system. Additional reporting and review of this — particularly in fora such as the G20, where Finance Ministers and Financial Institutions are present — will be important.

Charting a Path Forward

The NCQG represents an important — possibly transformative — step toward a safer and more sustainable future. But this hinges on how it's executed.

$300 billion is within arm's reach, as long as MDBs continue along their reform path and countries maintain contributions. The important remaining questions are how to ensure the right funds are matched to resource needs and that finance reaches those who need it most.

But where countries should truly be setting their sights is the full $1.3 trillion. This should be a guiding star as we head toward 2035, as it's not only the better measure of need, but also the true ambition the climate crisis demands.

While we have until 2035 to reach the finance targets agreed to in Baku, several international summits this year present critical opportunities to build momentum:

• At the Finance in Common Summit in February, public development banks, especially national development banks, can demonstrate how they are working as a system to mobilize more climate finance.
• In June, many leaders from governments, development finance institutions, civil society organizations and elsewhere will gather at the International Conference for Finance for Development, held once a decade. This is a prime opportunity for these players to recommit to bolstering financing for sustainable development, with a more integrated approach to development and climate action.
• At the BRICS summit this July, Brazil, China and India have an opportunity to outline how they will step into a greater leadership role on climate action, including in finance, in the global arena.
• At the 2025 UN climate summit (COP30) in November, Brazil and Azerbaijan (the 2024 and 2025 COP hosts) will present a roadmap for reaching the $1.3 trillion target. Other actors could help build confidence that this roadmap is achievable by announcing new efforts such as country platforms, finance commitments from the private sector and progress toward establishing solidarity levies.
• Leaders at the G20 summit, held immediately after COP30, could use this opportunity to lay out how to overcome economic hurdles faced by developing nations, including unsustainable debt and high costs of capital, that put the brakes on climate investments.

Leaders should seize these opportunities to chart a path forward, overcome headwinds and ultimately deliver the finance the world needs to confront the climate crisis.

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Are ‘Country Platforms’ the Key to Delivering Green Growth at Scale? wil.thomas@wri.org Wed, 02/19/2025 - 16:23

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For decades, the world has wrestled with a critical question: How do you finance climate action at scale, while also growing economies and improving people’s lives?

So far, the world has focused on raising the money needed to support developing countries that are the fastest growing and most impacted by climate change. We saw some limited progress on this last year at the UN climate summit in Azerbaijan. Wealthy nations agreed to lead the way in providing $300 billion in climate finance annually by 2035, while all nations committed to work towards mobilizing $1.3 trillion annually from all financing sources. Achieving the higher target will be exceedingly difficult, especially in light of the recent stop to U.S. international funding and weakening European support, but it is necessary and possible.

But in addition to just raising the capital, the world needs to significantly improve the way it delivers finance for green growth. This is fundamental to both making every precious dollar count and ensuring countries have the resources and political space to achieve results people can see and feel.

A tool called “Country Platforms” is emerging as a promising solution — but it will only work if we learn from lessons of the past and invest well in country capacity.

What Are 'Country Platforms' and Why Do We Need Them?

The current international climate finance system is siloed, inefficient and fragmented.

Money comes from many different sources, including governments, multilateral development banks (MDBs) and almost 100 climate funds — all with different, often uncoordinated requirements. Mitigation finance, which needs to be mobilized at scale where emissions reductions are cheapest, remains largely small-scale and piecemeal, attracting insufficient private investment. Countries and communities have to demonstrate that climate resilience measures are separate to development, even when the most cost-effective solutions deliver both.

This has led to growing financing gaps, overstretched public institutions, frustrated populations and ever-more fraying trust. Reform in the way climate finance is delivered is no longer a choice, but a necessity.

While all the pieces of the finance jigsaw — public and private, national and international, development and climate — need to be fitted together and sequenced with policy and institutional reform, no one international organization or group of leaders has oversight over all the parts of the puzzle. The G20 has embarked on important work to reform the multilateral development and climate finance system from the top down, but this is politically challenging and slow.

Enter “Country Climate and Development Platforms.” While there is no one definition, the term typically refers to efforts to bring together myriad sources of finance at the country level to invest in sectoral or economy-wide transformations that achieve both domestic and international goals.

We have seen several examples of “Country Climate and Development Country Platforms” (or “Country Platforms” for short) emerge in recent years. “Just Energy Transition Partnerships” have been pioneered by South Africa, Indonesia, Vietnam and Senegal. Multi-sectoral “Country Platforms” have been launched in both vulnerable countries like Bangladesh and Barbados, as well as in larger, wealthier countries like Egypt, Brazil and Colombia. 

The concept behind Country Platforms is not entirely new. In the late 1990s, development assistance was in similar disarray, a debt crisis was mounting and the world lacked a coherent set of goals. Poverty Reduction Strategy Papers (PRSPs), the Highly Indebted Poor Country (HIPC) process, the Millennium Development Goals, the Monterrey Consensus on Financing for Development, and a series of internationally agreed aid effectiveness principles in the 2000s allowed for a coordinated scale-up of development assistance and debt relief, aligned behind country-led, coherent plans, focused on achieving transformational results.

As presidents of this year’s G20 and UN climate summit (COP30), South Africa and Brazil are championing the idea of Country Platforms, with the hope that perhaps a dozen new ones will be announced this year. Many countries are considering it.  

If designed effectively, these Country Platforms could be transformational, offering the chance to secure the lofty goal of financing green growth. But this will only happen if they both learn from the past and invest in the required capacity for countries to simultaneously achieve climate and development goals.

As governments design and implement these Country Platforms, six principles will be critical:

6 Ways to Make Country Platforms More Effective1) Ensure country leadership.

Much has been made of the importance of platforms being “country-led.” Above all, platforms should be owned and led at the highest political level. Domestic support, transparency and accountability for policy and institutional reforms; appropriateness in scope and nature for the country context; and international finance aligning with domestic priorities also matter.

High level political leadership at the country level proved essential during both earlier “development platforms” and more recent Country Climate and Development Platforms, both for setting a bold vision and building broad support across the government, economy and society. While imbalances of commitment and power led some development platforms to be more of a coordination mechanism for donor priorities, countries such as Mozambique and Rwanda’s strong vision and commitment from the top ensured donor support was fully aligned to long-term national plans, contributing to rapid gains in human development. Kenya showed the importance of domestic support and accountability for policy reforms, even if regional and external pressure helped to reinforce it.

While many Country Climate and Development Platforms have also benefitted from strong country leadership, the JETP model might have needed more adaptation for different country contexts, for instance Indonesia’s comparatively younger coal plants. In South Africa, competing priorities between domestic stakeholders and international donors created uncertainty, with donors often providing whatever finance they had, rather than flexing their instruments to fit the need.  

Future efforts around Country Platforms should lean in to enable the highest level of political leadership, reinforcing domestic support, transparency and accountability. There should be flexibility in their content and form, reflecting country contexts and needs, whilst ensuing finance is well-aligned.

2) Integrate climate with growth and development.

The latest G20 expert group report argued that for climate transitions to succeed, they need to be based on a longer-term vision that reconciles countries’ growth, development, jobs and climate objectives. It calls for a whole-of-economy transformation by putting climate (and nature) at the heart of a country’s medium-term macro-economic and sectoral modelling, planning and financing.

Unless countries make tough choices about the direction of their economy overall, well-meaning efforts to transform, for example, the energy sector, could be undermined by contradictory incentives from the country’s tax, subsidy, trade or industrial policies.

PRSPs sought to mainstream poverty alleviation into broad-based growth, institutionalizing this goal through macro-economic reforms, medium-term budgets and nested sector strategies. Examples from South Africa’s JETP to Egypt’s “Nexus of Water, Food and Energy” show how Country Platforms allow countries to pull climate out of its environment ministry silo and develop sectoral and cross-sectoral transformation plans.

However, many Country Climate and Development Platforms have suffered from the lack of an overall green macro-economic framework — or even a comprehensive sectoral plan. For example, a separate Department Mineral Resources and Energy electricity plan drove inconsistencies in electricity policy and therefore price signals, when compared to South Africa’s JETP,. Indonesia’s JETP left out off-grid industrial power plants. Brazil and Colombia have more comprehensive, integrated approaches to green economic transformation, but their projects listed for international finance on their Country Platform are not included in their countries’ core budgets.

Country Platforms should be clear from the outset whether they aim to support broad or narrow goals. Where they have narrow goals, countries and their international partners should be aware of some of the risks to systematic transformation. It possible, they should seek to build towards a broader shift over time.

3) Put people at the heart of the process.

Successful large-scale economic transformations need to mobilize the capacities of diverse parts of society and put people at the center of processes and outcomes.

Governments can set direction and policy incentives. The private sector provides dynamism and creativity. The academic community provides insights. Civil society can mobilize the grassroots and, along with parliaments, hold governments to account. Decision-making processes ideally need to include all these players, particularly those who stand to lose from a transition, to secure a sustainable political settlement. Meanwhile, those most vulnerable to negative impacts need transition support, such as workforce retraining, social support and economic diversification.

PRSP processes that involved broad-based participation sparked a more open and sustainable policy-making process, especially at the sectoral level. South Africa’s JETP embedded the concept of a “just transition,” consulting across government and with labor unions and civil society.

However, the level of inclusion in PRSP processes tended to reflect how open that government already was to consultation. Efforts at inclusive processes have been mixed in JETPs, with Indonesia yet to institutionalise consultations with fossil fuel workers. Even in South Africa, where the JETP funded measures to mitigate the social impacts on coal-dependent workers and communities, the low level of grants (4%) in the initial finance package and closing of the Komati coal plant before financial assistance was available meant that local communities did not feel the transition was just. They ultimately called for the coal-fired power station re-open.

Countries developing platforms can share insights about how to put the full range of actors at the heart of the transition process. Approaches, limitations and risks will vary, in line with the political economy of each country. Sufficient support should explicitly be provided to allow for timely consultation and transition activities. 

4) Mobilize the right type of finance, at the appropriate scale.

Successful Country Platforms need to allow different types of finance — public, private, domestic and international — to be far more coordinated and coherent. Public finance should be as catalytic as possible.

This increases efficiency, leverage and scale. Aligning diverse financing sources behind investments allows each type of finance to be matched to its use and risk appetite, working efficiently and transparently as part of a well-governed system.

PRSP-era platforms coordinated multi-donor, programmatic finance behind government plans, blending IMF support and MDB loans with bilateral grants and debt relief through “multi-donor groups” and “sector-wide approaches.” JETPs have blended grants, concessional loans, patient capital and de-risking and credit enhancing instruments like guarantees, racking up commitment at scale: $12.9 billion in South Africa, with the intent to leverage $98 billion in total (the bulk of it from the private sector); $20 billion in Indonesia (half of it coming from the private sector); $15 billion in Vietnam; and nearly $3 billion in Senegal.

Source: “Resource Mobilization Plan: Implementing Vietnam’s Just Energy Transition Partnership (JETP)”, December 2023

However, as of early 2025, approved JETP investments stood at only $1.3 billion in South Africa and $1 billion in Indonesia, while in Vietnam and Senegal investments are still under development. More work is needed to unlock private finance at scale. As more Country Platforms are developed in low-income countries and small island states, countries will need to balance private finance with affordable, long-term public finance — including budgetary finance such as the IMF’s Resilience Accessibility Facility — and more systematic approaches to debt sustainability, restructuring and relief.

To make effective use of resources, Country Platforms should be accompanied by a framework that allocates scarce concessional finance in line with both climate and development impacts. Adaptation and development finance should be treated as mutually reinforcing, even indistinguishable. Lowest-cost finance should be focused on the poorest and most vulnerable countries, and least commercial investments. Mitigation finance should be focused on lowest-cost emissions reductions, using the least concessional finance necessary to achieve the investment and outcome required. These investments should be complemented by public funding for technical assistance, transitional subsidies and social protection.

Work on Country Platforms should connect with efforts to increase the mobilization of private finance and develop resource allocation frameworks which focus on results. Support from countries like China and the Gulf should be incorporated.

5) Set strong foundational policies, institutions and pipelines.

To be successful, Country Platforms need enabling policies, institutions and pipelines.

Without these, investment cannot flow at scale. For example, renewable investments need prior reforms to market access and energy subsidy and price regimes, in addition to upgraded grids. Public and private actors need to work together to develop a pipeline of investment projects with sufficient information and financial structuring to allow private investors to assess the projects’ feasibility, risks and potential return.

JETPs have galvanized this effort. Vietnam’s Resource Mobilization Plan and Indonesia’s Comprehensive Investment and Policy Plan spelled out their intended policy actions and investment priorities for achieving net-zero emissions. In Indonesia, the Energy Transition Mechanism has PT Sarana Multi Infrastruktur (PT SMI)  working with partners to jointly develop blended finance initiatives. Bangladesh’s Climate and Development Platform focuses on supporting the development of project pipelines that can also attract private funds.

However, sequencing and partnership matter. The announcement of Indonesia’s JETP before the necessary enabling policies and pipeline were in place has been seen as one of the main factors delaying finance and reducing trust. Where investors have not been brought into the process early enough, policies and regulation have often proven insufficient and pipelines unbankable.

Countries and their partners should give careful consideration to sequencing and build feedback loops between governments and investors to keep improving these enablers. Specialized public-private project development facilities can play an important role. 

6) Focus on delivery and minimize transaction costs

Country Platforms are meant to simplify things by having a single, coordinated approach to financing. They should allow financiers to come in quickly to support ambitious governments at scale, helping them move through the sometimes challenging waters of early transformation and deliver results for people.

This has proven easier to say than do. PRSP and HIPC processes risked overloading low-capacity governments. It took some years to harmonize and simplify aid processes, and even then, this was not entirely successful.  JETPs have been critiqued for their complexity and lack of alignment among and within donors, recipients, MDBs and private investors. Investor institutions, including MDBs and bilateral institutions, have at times struggled to modify their individual approval and contracting processes to reduce administrative burdens.

Financial institutions and governments should identify ways to reduce duplicative administrative burdens and speed up financial flows. Ideas include using joint project preparation facilities, pooled funding arrangements, and harmonizing or agreeing to use each other’s due diligence, project approval and reporting processes. Partners need to decide when they want to back a government showing serious commitment — and back them rapidly at scale.

A Case for Agreed Principles and a Joined-Up Capacity-Building Offer

Country Platforms have the potential to apply well-established principles from development effectiveness, updated to take account of lessons learned and the added complexity of meeting both climate and development goals. Mutual accountability around such principles — with more predictable roles, responsibilities and sequencing — could help make them a reality. 

However, capacity-building will be key. This is needed to develop the relatively young practice of green growth transitions. And it is essential for resolving the tension between mobilizing finance rapidly while ensuring the building blocks of an enabling vision, policies, institutions, pipeline and political support are in place. The time has come for partners to make a clear offer of long-term technical assistance, capacity-building and peer learning for governments, as well as for the wider ecosystem of think tanks, universities and civil society.

Finally, lessons from the past show that the political economy of Country Platforms matters. Successfully delivering a transformation as significant as shifting onto a green growth pathway takes skill both from the political leaders in the country and those helping power the transformation with investment. Understanding and patiently navigating the political (and geopolitical) dynamics, rather than treating Country Platforms as a technocratic exercise, will be essential to their success.

By establishing clear principles for success — backed by a comprehensive capacity-building offer and a keen awareness of the political economy — Climate and Development Country Platforms could become a key tool for resolving the critical question of how to implement green growth at scale.

Finance Type Technical Perspective Exclude From Blog Feed? 0 Authors Melanie Robinson Crispian Olver

In Sub-Saharan Africa, Nature-Based Solutions Take Root margaret.overh… Wed, 02/19/2025 - 06:00

For the 21 million residents of Lagos, Nigeria, climate change is not a distant concept — it is a current reality. Over the past decade, the city has experienced devastating floods, exacerbated by the loss of over half of its wetlands that previously captured and slowed floodwaters. By 2050, the risk of climate-induced flooding could be twice as high as it is today, affecting an estimated 40 million people.

Communities in the Horn of Africa face their own threats — not from flooding but from a lack of water. The region is experiencing its longest drought on record. Millions of people are facing hunger as a result, many of whom are now displaced as climate refugees.

These scenarios are becoming more common across sub-Saharan Africa. The region is disproportionately impacted by climate change, despite contributing the least to global greenhouse gas emissions causing the crisis.

Yet at the same time, communities are increasingly adopting a powerful tool to build resilience to climate threats: nature-based solutions.

Nature-Based Solutions Gain Prominence in Sub-Saharan Africa

According to a new report from WRI and the World Bank, developed in collaboration with the African Development Bank, projects rooted in nature-based solutions are gaining momentum in sub-Saharan Africa. Between 2012 and 2023, the region saw nearly 300 new nature-based resilience projects that collectively secured over $21 billion in funding. And between 2012 and 2021, the number of new projects steadily grew by an average of 15% per year.

While the name may sound technical, nature-based solutions refer to a well-known and intuitive set of approaches that aim to protect, manage and restore natural systems — such as forests or wetlands — to benefit people, nature and the climate simultaneously.

These natural systems can build resilience against hazards like flooding, heat or drought. Critically, they often also produce additional benefits for communities — such as creating jobs, boosting farm yields, increasing incomes, protecting biodiversity and more. For example, planting trees on hillsides can stabilize soils, reduce erosion and enhance water quality for downstream communities by controlling sediment and filtering pollutants, helping to protect crop yields and safeguard rural livelihoods.

Nature-based solutions can also be integrated with traditional built infrastructure, such as roads or dams, to enhance resilience and cost-effectiveness. Using mangroves alongside sea walls to improve coastal protection is one example of this hybrid approach, sometimes referred to as "green-gray infrastructure."

Nature-Based Projects Are Diverse

In Tanzania, the Msimbazi Basin Development Project showcases how impactful large-scale green-gray infrastructure projects can be for local residents.

Dar es Salaam, the largest city in East Africa and home to over 5 million people, faces severe flooding every year, threatening lives and the local economy. In 2024, a two-day flood killed at least 155 people. It destroyed low-lying neighborhoods along the rivers that lead into the Indian Ocean. And it disrupted work, school and other activities for hundreds of thousands across the city.

The $260 million Msimbazi Basin initiative, funded by the World Bank and other multilateral donors, aims to protect Dar es Salaam from such extreme flooding in the future by combining river restoration, wetland rehabilitation and engineered solutions, such as dams. It exemplifies the "green-gray" approach that integrates natural systems — such as wetlands that absorb excess water and improve water quality — with traditional engineered infrastructure — such as terracing and drainage channels — to enhance urban resilience.

Such large-scale projects are emerging across sub-Saharan Africa. Of the 297 projects we analyzed, over 75% were large-scale initiatives that secured between $1 million and $500 million in funding. 

However, nature-based solutions can have a significant impact regardless of project size. Indeed, relatively small-scale, locally led projects that secured between $50,000 and $1 million in funding account for the remaining 25% of projects observed in the report.

Coastal communities in Kwale County, Kenya, for example, are taking a grassroots approach to restoring the area's coastlines and developing sustainable livelihoods through mangrove forest restoration and seaweed farming. In response to worsening climate impacts — including rising sea levels, storm surges and declining fish stocks — four community groups have replanted and managed more than 243,000 mangrove seedlings over 17 hectares of coastal land. This restoration effort aims to enhance biodiversity and protect against coastal erosion. As they have restored the mangroves, the communities have also established 91 seaweed farms to help provide an economic buffer against declining fish stocks and climate-induced shocks.

Community members plant mangroves in Gazi Bay, Kenya, an initiative similar to restoration efforts in greater Kwale County. Mangroves can enhance biodiversity and protect against coastal erosion. Photo by Rob Barnes/GRID-Arendal

This wide range of project sizes and types highlights the fact that there's no single solution to climate resilience: Diverse approaches will be needed to effectively address climate challenges across sub-Saharan Africa. It also shows that a variety of actors, from grassroots leaders to infrastructure developers, can successfully lead nature-based solutions.

Collaboration Is Central to Nature-Based Initiatives

Sudan faces many climate challenges, including desertification, erratic rainfall and land degradation. As a key agricultural producer for Africa and the Middle East, these impacts have been particularly devastating and could have ramifications far beyond its borders.

To address these climate challenges, a collaborative initiative between local communities, government agencies and international donors is working to identify vulnerabilities and develop adaptation strategies tailored to Sudan's White Nile region. These include efforts such as forest and wetland restoration, improved land management and community-led conservation. Sudan's national government serves as the project lead, while the Global Environment Facility provided key funding. Communities helped develop strategies to ensure they were tailored to local needs. National and state officials then helped incorporate these strategies into policies, plans and budgets to ensure broader alignment.

Coordinated efforts like these are key to succesfully designing and implementing nature-based solutions — and ensuring they make a lasting impact.

Across sub-Saharan Africa, national governments play an important role in anchoring collaborations that support nature-based projects, leading 61% of the initiatives identified. They also back nature-based solutions financially: Funding for over 80% of projects came from a combination of national governments, multilateral development banks and multilateral donors or funds.

Before and after photographs along a 3-kilometer (1.8-mile) stretch of road in Makueni Country, Kenya. The Drain to Gain project diverted water from a frequently flooded road to nearby crops, a collaboration between the Makueni County government and social enterprise MetaMeta. Photo by MetaMeta Nature-Based Solutions Do More Than Enhance Climate Resilience

The coastal city of Beira, Mozambique, sits at the mouth of a major river system and is particularly vulnerable to climate-driven flooding. At the same time, its half-million residents struggle with high levels of poverty and unemployment. The Cities and Climate Change Project (3CP), launched in 2012, was designed to address the core challenge of flooding. But it also sought to maximize other benefits, such as improving public health and job creation. This large-scale urban flood resilience initiative integrated wetland restoration with engineered drainage systems along Beira's Chiveve River, enhancing biodiversity, improving erosion control and providing a 17-hectare multi-use urban green park for residents.

Today, the completed project helps protect over 50,000 people from recurrent flooding. At the same time, it has created over 1,200 jobs, increased economic stability for local businesses, and supported community health by making green space more accessible and improving air quality.

Mangroves along the Chiveve River in Beira, Mozambique, play a vital role in providing urban flood protection. Photo by World Bank

These multifaceted benefits show how nature-based solutions can serve as a holistic approach to urban development and climate adaptation. In fact, 83% of nature-based interventions we identified were designed to deliver multiple climate resilience goals, including improved water quality, increased water quantity, flood mitigation, erosion and landslide mitigation, fire risk mitigation and urban heat reduction. But beyond climate resilience, they also aimed to drive economic benefits; more than 50% of projects in the region are expected to create jobs and improve livelihoods through greater economic opportunities. In addition, projects often strove to address biodiversity conservation and improve health and food security.

Nature-Based Projects Can Also Support Equity

Climate challenges do not exist in a vacuum; their impacts are often felt most acutely by those who are vulnerable or marginalized in a society. For example, devastating floods last year in Nairobi, Kenya, affected poor urban communities living in informal settlements the most, amplifying existing inequalities. And droughts often result in disproportionately higher burdens on, and risks to, women who are responsible for securing water and food. In South Africa, government agencies issue permits and licenses to access or use water from certain sources. Women hold only 10.5% of these licenses, resulting in unequal access to water resources based on gender disparities.

The city of Johannesburg is using gender-responsive nature-based solutions to both address the city's water insecurity and to advance equity. One ongoing project, part of the SUNCASA initiative, ensures participation from women and other marginalized groups in project planning, preparation, long-term management and local decision-making. It supports the development of women-led tree nurseries, the saplings from which will help revitalize the upper Jukskei River catchment. In addition to creating new jobs for women and youths, the initiative could benefit over a million people through improved water security, decreased flood risk and better urban heat management.

Johannesburg is not alone in the shift toward equitable nature-based solutions. References to gender equity were frequent among the nearly 300 nature-based projects we evaluated, and they become more common over time: 68% of projects implemented between 2012 and 2021 referenced gender equity in project design documents, while 98% of those implemented between 2022 and 2023 did the same.

This upward trend highlights a growing recognition that inclusivity is critical to climate resilience efforts. However, further research is needed to evaluate how deeply these commitments are embedded in project design, implementation and outcomes, with the goal of ensuring that gender considerations translate into meaningful, on-the-ground impact.

Cities Are an Emerging Priority for Nature-Based Solutions

Like many places across sub-Saharan Africa, the city of Brazzaville, Republic of Congo, faces increasing climate risks like flooding and extreme weather. In response, the city is formally incorporating nature-based solutions into its urban planning and climate resilience strategy. Specifically, Brazzaville is expanding its 2023 Urban Forest Strategy to not only enhance urban greening, but also to deliver targeted interventions like strengthening flood protections in high-risk areas. Its approach prioritizes planning that is community-led and responsive to gender equality and social inclusion; planting guidelines that safeguard ecosystem integrity; and financial commitments that are robust and long-lasting. This comprehensive approach creates a model for other cities looking to integrate nature-based solutions into their climate resilience strategies.

Historically, developers have sited most nature-based solutions projects in rural areas. But urban projects like Brazzaville's have gained traction in recent years. In 2023, they accounted for nearly half of the World Bank and African Development Bank's climate resilience investment projects utilizing nature-based solutions, up from just 16% between 2012 and 2021. This shift is critical as urban areas increasingly face threats such as extreme heat, flooding and green space loss, all of which are exacerbated by rapid, unplanned development.

The Green-Gray Infrastructure (GGI) Accelerator, led by WRI Africa, is building on this momentum by providing technical assistance in areas like policy support, cost-benefit analysis, and improvements to monitoring and evaluation. The GGI Accelerator is working with an initial cohort of 11 cities (including Brazzaville) across seven countries to help increase the use of nature-based solutions and green-gray infrastructure in city plans, budgets and infrastructure projects. Ultimately, this could not only improve cities' climate resilience but also reduce biodiversity loss and generate jobs.

The Work ContinuesGrowing Resilience: Unlocking the Potential of Nature-Based Solutions for Climate Resilience in Sub-Saharan Africa

To learn more, see the new report.

Download

As these leaders show, nature-based solutions offer major potential to bring climate resilience and other benefits to sub-Saharan Africa. But scaling them to meet the region's urgent climate adaptation needs remains challenging, particularly in cities. Policies still favor traditional gray infrastructure over nature-based solutions or green-gray approaches. In addition, current approaches that funders and financiers use to evaluate economic benefits often fail to account for the types of benefits nature-based solutions may provide.

To unlock the full potential of nature-based solutions, key stakeholders — including national and local governments, multilateral development banks and local communities — must continue to collaborate to expand diverse funding mechanisms, further integrate gender and social equity considerations, and enhance monitoring and evaluation to assess long-term impact.

With concerted efforts, cities and national governments across Africa can grow nature's power to build a resilient, sustainable future, reducing climate risks while fostering economic growth and social well-being.

JLP_ SUNCASA Previews-01.jpg Forests Africa nature-based solutions Climate Resilience adaptation Cities Type Finding Exclude From Blog Feed? 0 Projects

• Cities4Forests
• Scaling Urban Nature-based Solutions for Climate Adaptation in Sub-Saharan Africa (SUNCASA)
• Nature-based Solutions for Adaptation

Authors Lizzie Marsters Natasha Collins Hellen Njoki Wanjohi-Opil James Anderson