Marilyn Waite | From Montego Bay to Belém: Mobilising private climate capital where it’s most needed

WHILE CLIMATE change presents an opportunity for collective wealth-building through mitigation activities, investment in climate solutions disproportionately favours the Global North. According to the Climate Policy Initiative, only 15 per cent of the estimated US$1.27 trillion in annual global climate finance reaches emerging markets and developing economies, excluding China.

This stark disparity underscores a critical financing gap, as the regions most vulnerable to climate shocks – yet where targeted investments could generate outsized benefits for communities and ecosystems – continue to be severely under-resourced in their climate efforts. SMEs in the Global South are particularly disadvantaged because they operate in capital-scarce environments, face limited access to concessional finance, and are often excluded from formal climate investment channels despite their critical role in local resilience and green innovation. Despite this growing awareness, there remains a massive mismatch between where capital is needed and where it is invested.

This financial gap persists even as the world acknowledges the urgent need for climate action on an unprecedented scale. According to the International Energy Agency, approximately US$4 trillion in annual investment is required by 2030 to keep global warming within the 1.5°C limit. Yet, current flows of climate finance remain far below this threshold.

The issue is not a lack of capital. Analysis by Sustainable Capital Advisors and Ernst & Young estimate that global financial assets, including retail savings, pensions, and institutional funds, are valued at more than US$450 trillion. As such, the real challenge lies in the misallocation and inaccessibility of these funds for climate-aligned investments in the regions that need them most.

STAKES HIGHEST

The stakes are highest in the Global South, home to the majority of the world’s population and projected economic growth. According to the United Nations Human Settlements Programme (2024), 75 per cent of the urban infrastructure expected by 2050 has yet to be built, with most of that growth projected in countries like India, Brazil, and Nigeria. SMEs in these countries have the rare opportunity to “build green” from the outset, and they require capital to do so.

Analysis by the Grantham Research Institute at the London School of Economics shows that existing climate finance mechanisms continue to marginalise low- and middle-income countries. Their report notes that while global clean energy investments reached record levels in 2023, more than 90 per cent of the increase since 2021 occurred in developed economies and China, leaving most low- and middle-income countries with only seven per cent of clean energy spending in 2022. Capital flows must, therefore, be reoriented. Not only will climate goals be missed without such a reorientation, but inequity and instability will deepen.

To begin reversing these trends, bold actions are needed – ones that incentivise private capital to cross borders for climate action. This was the central theme at the Global Climate Finance Forum (GCFF) 2025, held in Montego Bay, Jamaica in April. The forum convened roughly 50 investors, SME leaders, and policymakers from 17 countries to co-create solutions that move beyond Global North-led aid models toward equity-centred private investment.

Several practical and scalable solutions emerged from the GCFF, including:

• Tax incentives: Introducing tax benefits for institutional and retail investors to invest in Global South climate-aligned equities, climate-friendly bank and credit union products, and private funds.

• Regional investment vehicles: Developing local and regional finance structures with embedded local managers who are better placed to assess risks and opportunities.

• Transparency mechanisms: Creating public registries of investable Global South climate-focused SMEs to improve visibility and access to finance.

• Policy reform advocacy: Elevating Global South voices in international negotiations through collective statements ahead of the 30th United Nations Climate Change Conference (COP30).

VIABILITY

Case studies presented at GCFF underscored the viability of these reforms. Companies like Nunam, which repurposes used EV batteries in India; Grid Africa, which stabilises energy for critical infrastructure in the African Union; and Soleco Energy, which provides solar power across underserved areas in the Americas, show that climate-focused SMEs are ready to scale. These are not speculative ventures – they are operating businesses with measurable impact.

As the world looks toward COP30 in Belém, Brazil, the message from Montego Bay is clear: the time to act is now. Governments, foundations, companies, and investors must work collaboratively to:

• Incentivise private capital to invest and lend to climate SMEs, including through listed equities, fixed income products, and bank and credit union products;

• Partner with local investment firms who best understand risks, opportunities, and impacts;

• Enact and implement policies that facilitate equitable cross-border climate investments, including by investing in local currency;

• Support inclusive platforms that enhance investment discovery and transparency.

The climate clock is ticking, and the capital is there. What’s missing is meaningful action.

Marilyn Waite is managing director, Climate Finance Fund. Send feedback to columns@gleanerjm.com and marilyn.waite@climatefinance.fund