Public Privatequity Partnerships

This brief expalins about accelerating the growth of climate related private equity investment and Mitigating climate change requires vast investment. The World Bank estimates the volume of financing needed to meet the additional costs by the international community for climate change-related development. However, this sum represents only the additional or incremental costs: it would need to leverage nearly 20 times that amount—or up to as much as $4.6 trillion—from underlying investment finance from other public or private sources. These investment needs are diverse, and catalyzing the necessary finance to address the challenge of climate change will require interventions across all asset classes. Among the various types ofcapital, Private Equity/Venture Capital (PE/VC) is uniquely suited to financing climate friendly investments that are risky, innovative,and relatively small. As a result, less than 2 percent of PE/VC fund activities spread across all the emerging markets outside of India and China, despite these countries making up 20 percent of the world’s economy. Further, most investment in emerging markets has been made by international firms investing from overseas. There is still a very limited numberof locally developed climate friendly private equity funds in Emerging Markets.