Mobilizing private capital for climate-driven growth

Climate change is increasingly affecting agricultural systems worldwide, with small-scale farmers being among the most vulnerable. In 2022, KPMG Belgium contributed to the KLIMPALA project through a study on the accessibility of climate adaptation finance for small-scale farmers in Africa. The research found that while climate finance mechanisms exist, current funding levels remain far below what is required to meet the growing adaptation needs, resulting in a significant financing gap. At the same time, several structural barriers limit the effective mobilization and deployment of funding. These include financial and market constraints, political and regulatory uncertainty, institutional capacity limitations, as well as gaps in data, information, and technical knowledge that hinder the development of viable investment opportunities.

Addressing these challenges requires stronger enabling policy frameworks, improved access to climate and investment data, the development of financial instruments tailored to local contexts, and closer collaboration between public and private stakeholders to de-risk investments and strengthen project pipelines. The report also emphasizes the importance of mobilizing greater levels of private capital to complement public funding and help close the climate finance gap.

This call for greater private sector engagement is further explored in the global study From Risk to Reward: Unlocking Private Capital for Climate Growth, conducted by KPMG and the World Economic Forum. The report examines how private climate investment can be scaled in emerging markets by addressing barriers such as fragmented project pipelines, limited data transparency, and misaligned incentives, and outlines practical actions to reduce investment risk and strengthen project bankability.

These insights build on KPMG’s broader work supporting stakeholders in addressing barriers to climate investment and unlocking private capital.

Michael Wagemans

Partner, Head of Sustainability | Advisory

KPMG in Belgium

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Addressing climate change can help to support the economic development and long-term growth in emerging markets and developing economies (EMDEs). EMDEs require trillions of dollars to address climate change, yet only a fraction of this funding is currently mobilized.

Developing nations face significant barriers to accessing climate finance, including inadequate technology, insufficient data, and structural challenges such as fragmented project pipelines, regulatory uncertainty, and weak financial markets. These obstacles deter private investment and slow progress.

The consequences of insufficient climate finance are far-reaching: EMDEs continue to struggle with weather-related disasters, poor air quality, food insecurity, and limited access to clean water and energy. These challenges contribute to weak rural development, poverty, poor health, inequality, and declining productivity — further hindering economic growth.

To address this gap, KPMG and the World Economic Forum (WEF) conducted a global study, ‘From Risk to Reward: Unlocking Private Capital for Climate Growth,’ with the intention of identifying practical strategies to help to scale private investment.

The report outlines six priority actions and sixteen strategies designed to reduce risk, improve project bankability, and enhance data transparency, aligning incentives for both public and private stakeholders.

These challenges set the stage for understanding the systemic shortfall in climate finance and the urgent need for innovative approaches. Scaling private climate capital in EMDEs should be acted on directly. This roadmap by KPMG and WEF highlights the necessary interventions, which can bridge the finance gap and help unlock development opportunities.

In this KPMG International summary document, we outline the key findings from the WEF white paper, ‘From Risk to Reward: Unlocking Private Capital for Climate Growth,’ and showcase how KPMG firms have supported clients globally in addressing climate finance challenges.