{
  "id": 9332746,
  "title": "Climate finance needs an overhaul",
  "url": "https://urgent.news/2026/09/23/climate-finance-needs-an-overhaul",
  "topic": "business",
  "section": "Business",
  "published": "2026-09-23T11:48:45.000Z",
  "source": {
    "name": "Semafor",
    "slug": "semafor",
    "url": "https://www.semafor.com/article/09/23/2026/climate-finance-needs-an-overhaul"
  },
  "original_language": "en",
  "account": "The world is pouring an unprecedented amount of money into clean energy technologies in developing nations: nearly $400 billion is available for investment in 2025, more than double the sum from five years ago. However, this surge in climate finance is not enough. In 2035, countries pledged to reach $1.3 trillion in annual clean tech investments, a goal still far from being met.\n\nA key reason for the shortfall is that clean tech is now cheaper than ever before, offering greater returns for every dollar spent. Moreover, recent studies on lending from development banks to private enterprises in emerging economies since 1994 have shown an average default rate of 3.5%, comparable to that of advanced economies. This indicates that the risk associated with these investments has significantly decreased.\n\nHowever, the real challenge lies in ensuring that the increased capital translates into tangible benefits such as lower poverty rates and reduced emissions. Tariye Gbadegesin, CEO of Climate Investment Funds, a World Bank-backed pool of concessional capital for clean energy, acknowledges that while there is a lot of good intent, more needs to be done to convert this into concrete outcomes. She believes that climate finance investments are most effective when coordinated with a country's finance ministry rather than energy or environmental officials, which has traditionally been the case.\n\nGbadegesin emphasizes that development banks should not merely fund individual clean tech projects but instead collaborate with developing countries to improve their energy market regulations, making them more attractive to private investors. She also points out the need for greater financial innovation to mitigate the risk of losses arising from the use of US dollars for imported hardware, while energy prices are set in local currencies.\n\nJonathan Berman, CEO of the Shell Foundation, adds that more attention should be given to consumers' budget constraints. Diverting more climate finance towards engineering and manufacturing improvements to reduce the cost of clean tech is crucial. He warns that assuming new clean energy systems will automatically drive demand is misguided, especially as household budgets become increasingly unpredictable due to factors like the fallout from the Iran war.\n\nLastly, Berman suggests that micro-lending and other financial products designed to make clean tech more affordable for low-income households may not work in a world where daily uncertainties are the norm. He argues for driving towards minimal or no financing for many use cases, as the unpredictable nature of today's world demands it. Despite development banks' record-high climate funding last year, the World Bank has been scaling back on some of its key goals.",
  "summary": "For developing countries, more green tech capital doesn’t always translate to a cheaper and cleaner energy system.",
  "key_points": [],
  "editors_take": null,
  "illustration": null,
  "coverage": {
    "outlets": 1,
    "also_reported_by": []
  },
  "ai_generated": true,
  "disclaimer": "Summaries, key points and the editor’s take are written by software from other outlets’ reporting and may contain errors — always check the linked original."
}