Clouds on the Horizon: Mobilizing Private Capital for Sustainable Development in a Changing Political and Policy Environment

Mobilizing private capital for climate and development goals in emerging and developing economies is increasingly urgent amid rising global debt, shifting geopolitics, and limited fiscal space. This paper outlines key enablers to scale private investment, including enhanced creditor-debtor dialogue, stronger project pipelines, improved transparency, and targeted industrial policies. It highlights the need to reform regulatory frameworks, expand concessional blended finance and risk-sharing tools, and better leverage MDB/DFI platforms. Finally, it calls for strategic experimentation—including through voluntary carbon markets—to unlock new, non-debt-generating capital and support a sustainable, equitable, and growth-oriented global net-zero transition.