In an era of shrinking development aid budgets and escalating climate risks, scaling private investment for climate action in emerging markets and developing economies (EMDEs) is both an economic and political imperative. Guarantees—financial instruments that transfer specific risks from investors to a guarantor—are among the most powerful levers to achieve this. They unlock private capital, reduce costs for borrowers, and build local financial capacity over time.

However, guarantees remain underutilized and fragmented, mobilizing just a small share of the USD 2.4 trillion needed annually for climate finance in EMDEs, as well as the USD 1.3 trillion in annual climate finance for developing countries committed at COP29. Regulatory barriers, high transaction costs, data gaps, and institutional fragmentation all limit their effectiveness.

The Green Guarantee Group (GGG) brings together governments, multilateral development banks (MDBs), the private sector, civil society, and a Wise Persons Group to chart a path toward greater uptake of guarantees.

This report distills 4 targeted recommendations and 11 key actions to unlock the full potential of green guarantees:

Together, these recommendations offer a pragmatic and politically relevant roadmap for the target of mobilizing the USD 1.3 trillion a year by 2035 for EMDEs, in line with the Baku to Belém Roadmap and the COP30 Circle of Finance Ministers. They position guarantees as an investment tool rather than aid, aligning with the political momentum to leverage scarce public funds to catalyze larger flows of private capital toward climate projects. These recommendations offer a pathway to strengthening the enabling environment for guarantees and accelerating the mobilization of private capital for climate action.

The recommendations are informed by technical expert discussions over the past year, bilateral consultations, and input from the GGG-convened “Wise Persons Group” (Annex 4) Experts were consulted in their individual capacities and generously contributed their time, experience, and insights throughout the drafting and review process. Their feedback was instrumental in making the recommendations relevant, technically sound, and actionable across various institutional and market contexts. The GGG extends its sincere appreciation for their engagement and looks forward to continued collaboration.

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