Mobilising Investment for Energy Transition in Emerging and Developing Economies

Sovereign wealth funds have been investing in climate solutions for several years, playing a crucial role in supporting governments, especially in developing economies, with long-term capital. These funds, along with strategic investment funds, are essential for reducing risks to international investors and attracting inward investment flows.

Despite their efforts, the required climate transition finance to meet the 1.5-degree goals is estimated at $6.5 trillion per year by 2030, which exceeds the capacity of any single financial entity. Institutional segmentation further complicates capital mobilization by preventing integrated capital structures from effectively allocating risks.

Nevertheless, sovereign wealth funds are increasingly investing in clean energy infrastructure in developing countries. Their commitment has been demonstrated through research and engagement in the UNFCCC Conference of the Parties process, including COP29, where they pledged to scale up climate finance investments, decarbonize portfolios, strengthen partnerships, and create innovative financial instruments leading up to COP30 in Belém, Brazil.

To take the first step in helping catalyse capital into sustainable infrastructure in emerging and developing economies, on 19 and 20 June, ahead of London Climate Action Week, IFSWF is convening in partnership with NinetyOne, a private, invitation-only gathering of key institutions, including sovereign wealth funds, development finance institutions, private-sector investors, commercial lenders, and concessional funders. This event aims to explore collaborative pathways to channel capital into climate infrastructure solutions in developing markets in Africa, South-East Asia, and Latin America.

The goal is to help these institutions understand their roles and contributions to climate finance in developing economies, fostering strong partnerships and platforms to scale risk capital for a just transition to a low-carbon future. By focusing on multiple regions, the event seeks to promote innovation, share knowledge, and expand capital flow globally to support climate transition solutions.