Public/private partnerships
They are widely used to support infrastructure projects and represent a viable tool for financing climate-relevant activities, especially given the need to engage both the public and private sectors in climate change mitigation.
Climate risk insurance:
Insurance is a very important but significantly underutilized solution to help structure a climate change financing solution that can be incorporated into a broader financing solution to help make it economically viable. This includes sovereign risk insurance and technology risk insurance products.
“Transition and sustainability bonds:
These are used by companies in carbon-intensive industries, such as oil and gas or heavy industry, as green bonds may not be available due to certain criteria.
Islamic finance:
Climate change mitigation strategies are consistent with the principles of Islamic finance. Islamic finance offers a wide range of instruments that can be used to mitigate climate change and, importantly, attracts very different investment partners.
“Green loans:
“Green loans are loans aimed at improving environmental sustainability and are essentially similar to green bonds. Separate principles for green loans have now been developed.
Achieving targets for reducing emissions and green transformation of economies will require unprecedented levels of investment. “The green bonds and green investment funds that already exist in some countries are unlikely to provide this level of funding. That is why we should expect the emergence and rapid development of a number of new green financial products.
So, we are likely to see some or all of these products increasingly used to raise investment capital to combat climate change. We expect more sophisticated versions of these products to emerge over time.