COREDO’s practice confirms: successful climate projects in Asia and Africa are always built on a balance between environmental goals and economic viability. That is why climate investments are not only grants and subsidies, but also long-term private investments, loans, and government guarantees. Among the key sources of climate finance are the Green Climate Fund (GCF), Climate Investment Funds, as well as development banks (World Bank, EBRD, Asian Development Bank) and private venture funds actively investing in sustainable development.
| Source of funding | Type of financing | Key terms and requirements | Examples of organizations |
|---|---|---|---|
| International climate funds | Grants, subsidies | Alignment with climate goals, reporting | Green Climate Fund, Climate Investment Funds |
| Development banks | Loans, guarantees | Projects with high climate impact | World Bank, EBRD, Asian Development Bank |
| private investments | Long-term investments | ESG assessment, profitability | Venture funds, investment firms |
| Government programs | Grants, subsidies | National climate plans (NDCs) | EU programs, national agencies |
Thus, the diversity of sources and instruments of climate finance provides flexibility and resilience in project implementation across different regions, which is directly linked to the effectiveness of international cooperation in this area.
International Climate Finance: Mechanisms and Actors
International climate finance is regulated by a number of agreements and standards. The 2015 Paris Agreement enshrined commitments by developed countries to mobilize at least $100 billion annually to support mitigation and adaptation projects in developing countries. Nationally Determined Contributions (NDCs) have become a tool for integrating climate goals into national development strategies. The OECD and the European Union set standards for transparency, reporting, and assessing the effectiveness of climate investments.
COREDO’s experience shows that the largest projects in renewable energy, water supply, and sustainable transport are channeled through these institutions. International funds – the Green Climate Fund and the Climate Investment Funds – provide grants, subsidies, and guarantees, and also act as catalysts for mobilizing private investments. Among financial instruments, green bonds, climate loans, blended finance (mixed financing), and emission compensation mechanisms (carbon offsetting) occupy a special place.
Solutions developed by COREDO help clients build internal control systems that comply with international standards, significantly increasing their chances of obtaining financing.
Climate financing for businesses in developing countries
Attracting climate financing is a multi-stage process that requires preparation, transparency and strategic planning. The COREDO team has implemented dozens of projects where a clear structuring of the stages was a key success factor:
- Analysis of the project’s compliance with international and national priorities: the project must align with NDCs, sustainable development criteria, and have a measurable climate impact.
- Development of a business plan that takes ESG and climate risks into account: investors require not only financial calculations but also assessments of environmental, social and governance impacts.
- Selecting optimal sources of financing: adaptation projects often have access to grants and subsidies, while emission reduction projects can use loans and private investments.
- Preparing the documentation package for submission to funds, development banks or private investors: COREDO supports clients at all stages, from preparing applications to undergoing Due Diligence.
To reduce risks, instruments such as insurance, hedging and monitoring of climate threats are used.
Scaling climate projects in Asia and Africa requires flexible strategies: partnerships with local authorities, integration of innovative technologies (for example, IoT, blockchain for emissions tracking), as well as diversification of financing sources. COREDO’s experience has shown that successful projects are often built on blended financing and active engagement with international and regional institutions.
Legal support for climate investments
The specifics of registering legal entities for climate projects in the EU and Asia are determined by both national legislation and the requirements of international funds and development banks. For example, registering a company in Singapore, the Czech Republic or Estonia requires not only the standard set of incorporation documents but also justification of the activities’ compliance with ESG criteria, as well as disclosure of beneficiaries within AML compliance.
Legal support for climate investments covers issues of intellectual property for climate technologies, contractual relationships with contractors and investors, as well as compliance with disclosure and reporting requirements.
COREDO’s experience has shown that transparency and compliance significantly accelerate the financing process and increase trust from international partners.
Transition to the next section:
At the same time, despite progress in regulation and support for climate initiatives in developed countries, significant barriers remain in a number of developing countries to attracting and effectively using climate finance.
Challenges of climate finance in developing countries
Despite the growth of international climate finance, entrepreneurs and leaders in developing countries face a range of barriers:
- Financial: limited access to long-term capital, high collateral requirements, lack of credit history.
- Institutional: complex registration procedures, lack of transparent rules, shortage of qualified personnel.
- Political: instability, risks of legislative change, weak interaction between the state and business.
Economic factors: high debt burden, currency volatility, inflation, also constrain the development of climate investments.
The COREDO team helps clients build partnerships with private and public investors, allowing them to diversify funding sources and reduce risks.
Climate finance: innovations and prospects
In recent years, new instruments and technologies have been appearing in the climate finance market: green bonds, sustainable credit lines, crowdfunding, platforms for tokenizing climate assets. The integration of ESG criteria is becoming a mandatory element of long-term investment strategies, and sustainable financing: a standard for international projects.
The impact of climate financing on the economic development of regions is becoming increasingly noticeable: new jobs are being created, the technological level is rising, and resilience to climate risks is being strengthened.
The successful integration of such solutions into business processes becomes a competitive advantage for companies operating in the international market.
To effectively utilize these opportunities, companies should focus on advanced approaches and adapt their strategies to changing market requirements.
Recommendations for entrepreneurs and executives
COREDO’s experience allows formulating a step-by-step guide for businesses seeking to secure climate financing in developing countries:
- Strategic planning: integrate climate goals and ESG criteria into the business model, take into account national and international standards.
- Legal preparation: choose the optimal jurisdiction for company registration, ensure a transparent ownership structure and AML compliance requirements.
- Financial modeling: prepare a detailed business plan taking into account climate risks, assess ROI and the long-term sustainability of the project.
- Investor engagement: choose relevant sources of financing (funds, development banks, private investors), prepare a package of documents that meets their requirements.
- Monitoring and reporting: implement internal control systems, ensure regular reporting on climate and financial indicators.
Key mistakes to avoid: underestimating compliance requirements, insufficient consideration of ESG and climate risks, lack of transparency in ownership structure and financial flows.
If you plan to implement a climate project in the EU, Asia or the CIS and are looking for a reliable partner for strategic support: COREDO’s experience and our team of experts are ready to offer solutions that work in practice.