$102 Billion in Climate Finance Beyond the “Usual Suspects” Reveals a Growing Multipolar Reality
The new collective quantified goal (NCQG) for climate finance sets a target of $1.3 trillion annually by 2035 to support climate action in developing countries. Reaching this number will require a significant increase in all sources of existing finance and new sources, too.
One possibility: Countries that are traditionally not considered contributors under the UN Framework Convention on Climate Change (UNFCCC), but from whom investment nonetheless flows.
In the 1990s, countries agreed to a list of countries rich enough to have an obligation to provide finance to help poorer nations develop along low-emission, resilient pathways. Since that time, many countries not on that list have achieved higher levels of economic development. These countries have started to invest in climate action in developing nations — but their investments have until now not been included in official accounts of international climate finance, such as those put out by the Organisation for Economic Co-operation and Development (OECD) and Standing Committee on Finance.
Examining 14 of the largest economies outside the traditional contributors, we found that voluntary climate finance totaled roughly $102 billion from 2013 to 2023. Emerging markets and developing economies (EMDEs) were responsible for $86.2 billion in these flows, averaging $7.8 billion per year.
Moreover, funding has risen rapidly since 2020. In 2023, the most recent year in our sample, flows totaled $17.1 billion, more than triple the 2013 figure. In addition to their substantial size, these flows were different from one another and from traditional providers’ finance, reflective of these countries’ strategic engagement in a changing world.
This data provides a baseline for recipients as well as new and traditional providers to understand and act on the potential of nontraditional countries’ climate finance in reaching the $1.3 trillion.
Calculating the Baseline
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Drawing on the accounting framework developed by the OECD to track developed countries’ progress toward the previous $100 billion commitment (a goal replaced by the NCQG at the 2024 COP29), we tallied:
- bilateral public finance from state institutions
- multilateral public finance from institutions such as multilateral development banks and multilateral climate funds, which receive funds from multiple countries
- export credits provided by official export credit agencies, including export credit loans, guarantees and insurance
- private finance mobilized by public finance, such as when blended finance investments from bilateral institutions garner additional investment from the private sector
This involved applying the OECD markers to individual projects financed by public authorities across these four channels, as well as shares in multilateral institutions.
Because this methodology is designed to account for public efforts, it does not measure private financial flows that were not mobilized by public finance. However, the $1.3 trillion cannot be achieved without private finance at scale, including increased cross-border private finance from EMDEs. Our data also does not include state-owned enterprises.
We looked at 14 major economies outside Annex II: Argentina, Brazil, China, India, Indonesia, Israel, Mexico, Russia, Saudi Arabia, Singapore, South Africa, South Korea, Turkey and the United Arab Emirates. These include the 13 largest economies outside Annex II, plus South Africa, the largest economy on the African continent.
While all 14 countries are large economies, they vary in economic, geographic and political contexts. The International Monetary Fund classifies Israel, Singapore and South Korea as advanced economies, whereas the rest are considered EMDEs; in the World Bank’s income classifications, all are upper-middle or high-income except for India, which is lower-income. Some are likely to continue to receive climate finance through the NCQG.
The countries in our study do not directly report what they have invested in developing countries for climate action. Available data therefore remains fragmented. Since the data, framework and country set are incomplete, the actual scale of finance is likely larger than estimated.
What Does a $102 Billion Baseline Really Tell Us?
Reading into the $102.38 billion we found mobilized between 2013 and 2023, we offer five critical insights for the future of climate finance:
Climate finance is already multipolar
The $102 billion identified in our analysis shows that non-traditional providers are not just a potential future source for the $1.3 trillion climate finance goal. They are active, established pillars of global climate action today.
Flows are concentrated by source and channel
The top four countries — China, South Korea, India and Brazil — accounted for 72% of the total estimated flows, reflecting their economic scale and growing institutional capacity. Multilateral public climate finance — mostly provided by multilateral development banks (MDBs) but also multilateral climate funds, with the outflows attributed back to the respective contributing countries — accounts for most of these contributions, reaching almost 80% in 2023. This category has grown consistently over the past decade, a period during which MDBs were rapidly scaling up their climate operations and EMDEs were increasing their capital contributions and even starting their own alternative MDBs, the New Development Bank and the Asian Infrastructure Investment Bank.
Flows vary qualitatively from country to country
Because every dollar in this $102 billion baseline can be traced back to a specific transaction or shareholding, we can begin to understand why capital is flowing.
These flows reveal a wide range of financial and diplomatic approaches, from South Korea’s model of widely issuing numerous small grants to China’s capital-intensive infrastructure transactions through its export credit agencies.
Hundreds of transactions in our database can be traced to South Korea’s foreign aid model, which is geographically dispersed and includes many grants. In contrast, China made fewer but larger transactions, especially through the China Eximbank, which was involved in 29 of the 30 largest transactions in our sample. India followed a similar trend. China suggested in 2021 a pivot to support “small but beautiful” projects, so the model may evolve going forward.
Other themes and priorities were evident. More than half of Saudi Arabia’s transactions concerned resilience and reconstruction after disaster, such as distributing food baskets and building homes in Pakistan after the devastating 2014 floods.
Diverse approaches sometimes work together. When ACWA Power wanted to build a solar PV plant in Benban, Egypt, the Saudi-headquartered energy and water giant turned to financing from both China (through the Industrial and Commercial Bank of China) and the European Bank for Reconstruction and Development (whose shareholders include not just the countries of Europe but also non-Annex II countries such as India, Israel, China, the UAE, South Korea and more). It is also supported by the Multilateral Investment Guarantee Agency, part of the World Bank Group, as a guarantor — illustrating that not just different sources but different instruments are needed.
On a related note, compared to Annex II countries, the investments from our sample are less likely to reach the world’s least-developed countries, which have some of the starkest need for assistance in climate action. Only 8% of the finance in our sample went to least-developed countries, and nearly half of that went to Ethiopia.
Reporting gaps aren’t evidence of inaction
Fragmented reporting currently obscures the true scale of South-South cooperation. Ultimately, this baseline shows the need for a more inclusive global architecture that recognizes, counts and leverages the distinct ways these billions are already moving.
Addressing this challenge cannot fall solely on EMDEs. Comprehensive reporting is resource-intensive, and places a heavy administrative burden on nations with limited institutional capacity. While advanced peers like South Korea offer a strong blueprint for granular tracking, replicating these systems requires dedicated international support. The global community should invest in targeted capacity-building and streamlined reporting frameworks to help EMDEs accurately track and report their climate finance flows.
For example, Total Official Support for Sustainable Development (TOSSD) already captures South-South cooperation, with seven major non-Annex II economies (Argentina, Brazil, Indonesia, Israel, Mexico, Saudi Arabia and Türkiye) and the New Development Bank using it for project-level reporting. Yet many climate-related TOSSD projects report zero commitment amounts, and the framework lacks OECD-style climate tags. Whether by improving TOSSD or building alternative approaches, targeted technical support is essential for transparent climate finance data—which in turn will help practitioners identify and scale solutions.
Unlocking the Voluntary Climate Finance Potential
While the $7.8 billion of climate finance annually by EMDEs is substantial, the potential is far greater — particularly when it comes to mobilizing private finance from EMDE investors. This is where a far greater contribution to the $1.3 trillion is possible. Realizing this potential requires leveraging the diverse ways EMDE investors operate.
One way to do so is to scale triangular partnerships. These involve not only EMDEs, but also advanced economies and multilateral institutions (often in a South-South-North or multilateral configuration, where one partner is from a developed country or multilateral institution). By collaborating with established entities, EMDE investors can leverage technical expertise and risk guarantees, particularly during early-stage project preparation. Blending South-South capital with multilateral support can make projects more attractive and financially viable for EMDE investors.
The Zorlu Energy Wind Farm in Pakistan (56.4 megawatts) showcases this model. As the country’s first internationally financed commercial wind development, it required a coordinated financial structure to reach viability. Türkiye’s Zorlu Enerji served as the developer, providing 30% of the $147 million project cost as equity. The remaining debt structure was filled through a trilateral partnership: the Asian Development Bank and International Finance Corporation supplied $36.8 million and $38.1 million in senior debt, respectively, alongside $20 million from the regional ECO Trade and Development Bank and local commercial capital. By integrating these institutional strengths, triangular partnerships resolve the capacity and risk barriers that often stall cross-border projects.
In addition to triangular partnerships, other strategies will be needed to mobilize more private finance from EMDEs. Reaching the $1.3 trillion target will be impossible without significantly scaling up private finance, including from EMDEs. To fully realize the potential, more deliberate mobilization efforts are required. By deploying targeted de-risking mechanisms, institutions like development finance institutions (DFIs) and ECAs can collectively absorb the political and macroeconomic frictions that otherwise hold back EMDE investors from deploying climate capital across borders.
For example, the China Export Insurance Corporation (SINOSURE), a Chinese ECA, provided buyer’s credit insurance to a $145 million deal leading JA Solar to manufacture 300 megawatts of solar panels for Enel in Brazil. This 2017 project was the first solar PV financing from Sinosure, but not the last, and they have also expanded into wind, demonstrating how EMDE-led export finance can mobilize capital for green transitions.
The World Bank’s Multilateral Investment Guarantee Agency (MIGA) has a $1.48 billion framework agreement with AMEA, a growing private renewable developer headquartered in Dubai. This is to provide guarantees of up to 23 renewable and energy storage projects, in Africa, the Middle East and Central Asia. To align with the lengthy 15-to-20-year lifecycles typical of solar and wind power purchase agreements, MIGA’s guarantees provide up to 15 years of robust political risk mitigation. This safeguards AMEA’s investment against host-country vulnerabilities, for instance, currency inconvertibility and capital transfer restrictions.
A Multipolar Reality in Climate Finance
The global climate finance system has shifted into a multipolar reality.
Non-Annex II countries are active providers of climate finance. Their contributions, though voluntary and often underreported, are growing and becoming increasingly important to achieving global climate goals. Building a more inclusive climate finance architecture requires recognizing and integrating the rich diversity of institutional models and approaches through which non-Annex II countries engage with climate finance.