Your excellencies, colleagues and friends.
Let me start with a simple truth we all know only too well: We cannot meet our global targets on climate and nature unless we close financing gaps under the UN Framework Convention on Climate Change (UNFCCC), the Convention on Biological Diversity and the UN Convention to Combat Desertification (UNCCD).
These gaps are significant. An annual biodiversity financing gap of US$700 billion per year until 2030. Internationally mobilized climate finance for developing countries is at around US$200 billion per year. Yet, in accordance with the COP29 outcomes, we are aiming for US$1.3 trillion a year by 2035.
These gaps cannot be closed by public finance alone. We need public grants, philanthropic capital, and private investment all mobilized at far greater scale.
Blended finance seeks to leverage public finance for a much broader private investment. This blended finance is not a panacea. But it is a critical lever one that can trigger large-scale low-carbon and nature-positive transitions, create green jobs, and generate broader societal and economic co-benefits.
I welcome the GEF-9 aspirational target of putting 25 per cent of GEF resources towards projects blending public and private sector finance. But there is still a long way to go. Blended finance for climate reached only US$15.5 billion in 2024. Flows to the countries that need it most are moving in the wrong direction: climate blended finance in Least-Developed Countries fell from 23 per cent of the market in 2023 to just 5 per cent in 2024.
Friends, increasing blended finance can only be achieved by focusing public finance on unblocking private finance.
Global public debt reached over US$100 trillion in 2024. This means that public finance is constrained. That is precisely why blended finance matters: small, strategic amounts of public capital can de-risk and crowd in far larger flows of private investment.
To better blend finance, countries need to focus on building their enabling environment. Through long-term policy and regulatory stability aligned with Nationally Determined Contributions and long-term net-zero strategies. Through sectoral pathways aligned with national policies. Through overall policy coherence, including the removal of incoherent subsidies. Through green taxonomies, enhanced coordination between ministries and with Multilateral Development Banks and national development banks. Through increased technical capacity of public and private actors to structure and execute transactions. And more.
Country platforms are gaining prominence as a vehicle for building these foundations. They bring together governments, financial institutions and development partners around shared investment agendas, ensuring policy coherence and investment alignment with national net-zero and nature positive strategies. They can also develop bankable project pipelines aligned with policy aims. However, country platforms are not a silver bullet. We need to go broader and deeper, and build the national enabling environment.
Friends, UNEP is supporting countries to build that enabling environment.
UNEP works with both national governments and the private financial sector to create the enabling conditions for scaling up private investment.
For instance, as lead of the US$100 million GEF-8 Net Zero Nature Positive Accelerator programme, UNEP is supporting 12 countries to create long-term policies, promote policy coherence, strengthen interministerial coordination, link investors with bankable pipelines and build market confidence. these projects support governments to build country platforms without calling them such.
Another example comes with UNEP GEF-financed projects supporting African countries in building market conditions for electric mobility. Based on those successful projects, the African Development Bank is now taking forward a US$13.5 million GEF project called Green Mobility Facility for Africa (GMFA), which will blend GEF funds with co-financing of US$170 million. I would like to thank my friends at the African Development Bank (AfDB) for this partnership and hope it is one of many. It was only by UNEP supporting countries to build the enabling environment for electric mobility that the AfDB could then step up.
On supporting the private sector to come to the table, UNEP, through the UNEP Finance Initiative, works with over 550 banks and insurers to catalyze industry norms and best practices for integrating sustainability into governance, strategies, decision-making and ultimately financing. These actions support the private sector to get ready for blended finance.
Taken together, these actions aim to support the needed scale-up on blended finance and private investment more broadly.
Friends,
To scale up blended finance, we need to support developing countries to build the foundations for system-wide transitions into sustainable, resilient economies. GEF-9 resources can make a transformative difference by resourcing the enabling function, ultimately multiplying the catalytic value of GEF grants.
