The OPEC Fund for International Development is urging development finance institutions to do more than provide capital, calling for stronger project preparation and risk-sharing mechanisms to make climate investments in emerging markets attractive to private investors.
The call comes as inadequate project preparation, uncertain revenue streams and investment risks continue to prevent climate projects from securing financing, widening the gap between countries’ climate commitments and actual implementation.
Speaking at the opening of the OPEC Fund’s COP31 Pavilion programme, Vice President for Strategy Musab Alomar said the institution wanted to focus on translating climate commitments into tangible economic outcomes.
“COP31 starts here: turning climate ambition into progress people can feel,” Alomar said in his opening remarks.
The session, titled “Making Climate Projects Bankable in Emerging Markets,” brought together development finance institutions and private-sector experts to examine ways of overcoming investment barriers and mobilising private capital for climate action.
Discussions centred on improving project preparation, developing commercially viable financing structures and deploying targeted risk-mitigation instruments to reduce the risks facing private investors.
Khalid Khadduri, OPEC Fund Vice President for the Private Sector, who moderated the panel, said development finance institutions had a responsibility to help create the conditions under which projects could attract commercial investment, rather than waiting until they were already financially viable.
“The role of development finance is not only to finance projects once they become bankable, but also to help create the conditions that make them bankable in the first place. And that requires more than capital. It requires credible policies, capable institutions, sound commercial structures, appropriate risk allocation and effective partnerships,” Khadduri said.
The panel included Dimitri Koufos, Associate Director and Head of Sustainable Business Infrastructure at the European Bank for Reconstruction and Development; Dr. Mischa Lentz, Head of Climate Finance at the Asian Development Bank; Ruba Amarin, Director of Energy Transition and Critical Resources at KPMG; and Simon Gupta, Board Chairman of Green Growth Fund.
Their discussions noted the importance of aligning public-sector support with private investment requirements, particularly in emerging markets where regulatory uncertainty, weak institutional capacity and project risks can undermine investor confidence.
For development finance institutions, instruments such as guarantees, risk-sharing arrangements and early-stage project development support can help address these constraints and improve the commercial viability of climate investments.
The financing challenge is particularly significant for emerging economies, which need substantial capital to expand renewable energy, modernise infrastructure and strengthen resilience to climate change, while competing for investment with markets perceived to carry lower risks.
The OPEC Fund’s COP31 programme is seeking to bring public and private-sector stakeholders together to address these financing constraints and develop partnerships capable of converting climate priorities into investable projects.
The central challenge remains moving climate finance beyond commitments and institutional pledges to projects capable of attracting capital, generating sustainable returns and delivering measurable development outcomes.
