Financing the socio-ecological transformation

In 2025, the International Climate Initiative (IKI) once again focused on mobilising private funds to finance socio-ecological transformation.

Stock exchange board

The financial requirements for the global transition to a greenhouse gas-neutral world are estimated at between four and eight trillion USD. This figure clearly demonstrates that, in addition to public financing, an increase in private investments is also decisive for effective climate change mitigation and biodiversity conservation.

Financing the socioecological transformation is therefore an overarching focus of the International Climate Initiative (IKI) Strategy. It has set itself the target of leveraging at least EUR 1.5 billion in private capital by 2030. It is thus contributing to the new climate finance goal (New Collective Quantified Goal on Climate Finance NCQG). The NCQG envisages that by 2035, at least USD 300 billion per year should be made available for climate change mitigation measures in developing countries. Financing from public and private sources is to increase to at least USD 1.3 trillion per year.

The IKI not only works with traditional project funding, but also provides funds for innovative financing mechanisms via deposits in funds – including guarantee instruments for the reduction of investment risk and blended finance models, a mixture of private and public funding. As part of the IKI Invest funding instrument, the IKI made three deposits into new funds in 2025 or mobilising investment and raised its contribution to one fund. 

69,199,975 €

funding

was committed by the IKI in 2025 for projects and funds that support the financing of the socio-ecological transformation.

Green guarantees are an efficient and innovative instrument that has not yet been sufficiently exploited by private companies – especially in the Global South. The Green Guarantee Company (GGC) is the first global provider of guarantees and focuses solely on climate projects. The guarantees offered increase the credit standing of the transactions, encouraging private investors to board the project. In 2025, the IKI paid EUR 35 million into the Green Guarantee Group of the GGC.

With a deposit of EUR 13 million, the IKI is supporting an innovative financing instrument for the protection of tiger landscapes. Under the leadership of the United Nations Development Programme (UNDP) and in cooperation with the United Nations Capital Development Fund (UNCDF) and the Tiger Conservation Coalition, the Tiger Landscapes Investment Facility (TLIF) is an approach that funds companies and initiatives for the benefit of both nature and people in Malaysia and Thailand. TLIF mobilises investments in tiger landscapes, thus helping to conserve biodiversity, preserve habitats and strengthen local communities.

The IKI made a further deposit of EUR 23 million to the IKI-LAC Climate Private Sector Mobilisation Fund of the IDB Invest. Founded in 2024, the fund mobilises private investments in climate-neutral technologies in Latin America with a focus on the transport, energy and industry decarbonisation sectors. The total funding volume now amounts to EUR 46 million. 

Areal view of a large solar farm with multiple rectangular solar panels and several white containers
Through the Seed Capital Assistance Facility (SCAF), the IKI supported the construction of the Africa Ren solar park in Senegal.

Furthermore, the IKI specifically aims to promote the project development area. With a total of EUR 50 million, the IKI and the Mitigation Action Facility support the further development of the Seed Capital Assistance Facility (SCAF). The SCAF was developed to support private sector fund managers and project developers in developing their projects and ensuring their financial viability. The focus lies on the area of renewable energies in high-risk frontier markets in Southeast Asia and sub-Saharan Africa, but is intended to increasingly address the decarbonisation of the industry.

Leveraging private investments also played a key role at the COP30 networking evening in Belém, Brazil. Barbara Buchner, Global Managing Director of the Climate Policy Initiative, provided exciting perspectives on “Innovative Climate Finance” in her presentation and stimulated further discussion. 

Financing the socioecological transformation will remain an important component of IKI work in the future. For this reason, the funding programme sought promising ideas in this area in two priority topics as part of the IKI Compete funding instrument in its first IKI Large Grants Call 2025.

Project overview 2025

IKI Annual Report 2025

This article is part of the IKI Annual Report 2025.

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