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Bending the Climate Change Curve by Blending Finance: What Is The Real Potential ValueAdded of Guarantees?

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  • Claessens, Stijn
  • Kapoor, Sony

Abstract

Guarantees are often presented as a powerful tool to mobilise climate finance in developing countries, yet their impact is frequently overstated. This paper argues that guarantees can play a much larger catalytic role, but only when they address specific market failures and are embedded within broader financing strategies. Real additionality requires simpler and more coordinated guarantee structures, stronger project pipelines, greater use of local-currency solutions, and closer integration with concessional finance and country-led investment platforms.

Suggested Citation

  • Claessens, Stijn & Kapoor, Sony, 2026. "Bending the Climate Change Curve by Blending Finance: What Is The Real Potential ValueAdded of Guarantees?," FDL Policy Notes 2605, CEPREMAP.
    • Handle: RePEc:cpm:notfdl:2605
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    References listed on IDEAS

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    Keywords

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    JEL classification:

    • F63 - International Economics - - Economic Impacts of Globalization - - - Economic Development
    • F64 - International Economics - - Economic Impacts of Globalization - - - Environment
    • F65 - International Economics - - Economic Impacts of Globalization - - - Finance
    • F68 - International Economics - - Economic Impacts of Globalization - - - Policy
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures
    • H81 - Public Economics - - Miscellaneous Issues - - - Governmental Loans; Loan Guarantees; Credits; Grants; Bailouts
    • H87 - Public Economics - - Miscellaneous Issues - - - International Fiscal Issues; International Public Goods
    • N5 - Economic History - - Agriculture, Natural Resources, Environment and Extractive Industries
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
    • O - Economic Development, Innovation, Technological Change, and Growth

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