
At the close of COP29 in Baku, Azerbaijan, world leaders announced the new ambition to mobilise $1.3 trillion annually by 2035 to enable the scaling up of financing to developing countries. This will come from both public and private sources to address climate change and support the more affected nations. Known as the New Collective Quantified Goal on Climate Finance (NCQGC), or the Baku Finance Goal, it includes a central commitment to channel $300 billion each year toward developing countries, which is a significant increase from the original $100 billion target established under the Paris Agreement and from the $250 billion originally proposed during the conference. This financing agreement seeks to mobilise the much-needed capital for emerging markets from developed countries, to be able to close the financing gap and meet the SDGs and Climate Objectives.
At the outset of COP29, the Multilateral Development Banks (MDBs) issued a joint statement to further support the implementation of the Paris Agreement. MDBs play a crucial role in providing financial support to emerging markets, with their financial flows being counted towards the achievement of the $300 billion annual investment. With decades of experience, extensive local knowledge, and robust safeguards in place, they are uniquely positioned to partner with private investors seeking both impact and returns. In this joint report, MDBs have estimated that their annual collective climate financing for low and middle-income countries will sum up to $120 billion annually, related to their own finance. To this figure they have also added the aim to mobilise $65 billion from the private sector, an essential element to close the financing gap.
ILX, with a delegation composed of Manfred Schepers, CEO and Founder, and Victoria Walker, Associate Sustainability Officer, actively participated in various senior level COP29 panel discussions, emphasising the vital role of MDBs and Development Finance Institutions (DFIs) in addressing the estimated $2.4 trillion annual climate finance gap as per HLEG. ILX’s strategy is based on co-investing alongside these institutions to direct private capital towards emerging markets, focusing on B-loan participations in SDG-aligned investments. Sitting between the public and private sphere, ILX mobilises European’s pension fund capital leveraging the experience of MDBs to achieve both impact and return.
Business models such as ILX are a good example of how MDBs can boost mobilisation from the private sector. Further efforts are needed to underscore the significance of efficient, scalable approaches to mobilising private capital without relying on additional guarantees or concessionality. Such approaches are essential to minimise the misuse of blended vehicles, which should only be reserved for high-risk scenarios.
The commitments made at COP29 mark a significant step toward addressing the global climate finance challenge. However, further collaboration and harmonisation between public and private finance will be essential to bridging the funding gap, achieving the SDGs, and meeting international agreements.


