The disappointing lack of breakthrough capital commitments from the international finance community at COP29 signaled the extent of work that lies ahead. Given the magnitude of finance needed and the limits on public finance in emerging and developing economies, or EMDEs, mobilizing private capital is urgent in accelerating the response to the climate emergency. More intentional collaboration between funders and project developers is key to advancing progress on the energy transition and climate-resilient infrastructure.
The United Nations’ independent high-level expert group on climate finance notes that EMDEs excluding China require approximately $2.4 trillion per year by 2030. The total annual climate finance flows in these markets in 2022 were far below what’s needed, at around 17%.
It's well known that currency volatility and the historical performance of emerging markets have led to a critical confidence deficit that still limits the flow of funding to vital sectors, including water, roads, and other utilities. But unhelpful narratives continue to perpetuate misleading perceptions of risk, whether that is insufficient political will or a view that most EMDE infrastructure projects fail at the feasibility and business plan stage.