Better Guarantees, Better Finance: Mobilising Capital for climate through fit-for-purpose guarantees

This paper advocates for a massive increase in the use of catalytic credit, risk or currency guarantees to mobilise private capital for climate. It proposes three recommendations to achieve this goal: 1) including a climate mobilization mandate for public capital, 2) scaling and accelerating access to guarantees at current facilities such as MIGA or GuarantCo and 3) developing a new global green guarantees platform. It also lays out recommendations for project developers to tackle barriers to access catalytic guarantees, explores the benefits of different guarantee structures, and offers a set of design principles for better climate finance instruments that can help. Finally, It includes a worked example, demonstrating what a fit-for-purpose green guarantee facility could look like and how it could mobilise at least $30B of private capital for climate with $1B grant funding.