Catalysing Sustainable Private Investments with De-risking Strategies
How can Risk Mitigation Mechanisms unlock private capital for nature and climate solutions in developing countries? This interactive Workshop will bring together experts to brainstorm on various de-risking tools, such as guarantees, contingency grants, blended finance, derivatives, and innovative insurance. The event aims to exchange ideas on these mechanisms and how they can be deployed, gathering insights from various professionals on challenges, key considerations and how to address them.
Framing this topic
This short section provides context for the event to ensure all participants, regardless of prior knowledge, are equipped to engage with the discussion.
Developing countries require an estimated $2-4 trillion annually to address climate change, yet high perceived risks often deter private investors. Risk mitigation mechanisms can help bridge this gap. Blended finance combines public and private funds to improve the risk-return profile of investments. It can be used in different ways, such as to provide first-loss guarantee, concessional capital (below-market-rate financing), or early-stage funding (e.g. pre-seed and seed). Guarantees act as insurance against specific risks, enhancing investor confidence. Contingency grants provide funds if certain risks materialise, reducing potential losses. This session will explore how these tools can be deployed to unlock private capital for sustainable projects in developing countries.