Millions in Climate Investments for Developing Countries Were Just Announced. It’s Not Nearly Enough.

Multiple donors and international organizations announced commitments to climate finance efforts directed at developing countries during London Climate Action Week, signaling growing attention toward emerging economies that nevertheless falls far short of the need.

London’s signature climate event, which ended Sunday, was an opportunity for environmental diplomacy. Business and political leaders announced hundreds of millions of dollars in investment, coupled with panels that highlighted equitable international funding to countries least responsible for—but most affected by—the climate crisis.

Bloomberg Philanthropies, for instance, pledged $285 million to help expand clean energy infrastructure across developing economies and counter a well-financed oil lobby. 

Patricia Espinosa, former executive secretary of the United Nations Framework Convention on Climate Change, said in a statement released by Bloomberg that the money aims to fill a financial gap in plans and implementation.

“The emerging economies driving global energy demand are also those with the greatest potential to power themselves with renewables,” Espinosa said. “Many of them have set ambitious clean energy targets, and there is no one blueprint for how the transition happens. It must be adjusted to the realities of each country, its companies, and its people. What they do share is a need for an effective enabling environment and the infrastructure to translate those targets into deployment at scale.”

But the combination of private and public investment only scratches the surface of what is needed, said Reimund Schwarze, an environmental economist with the Helmholtz Centre for Environmental Research in Germany. The U.N.’s 2024 and 2025 international climate summits set a goal of $1.3 trillion flowing to developing countries per year for climate mitigation and adaptation by 2035.

That amount should be divided between private investment and multilateral development banks, according to a November 2025 report released by the London School of Economics and Political Science.

But as the United States pulls back from international aid, development finance is “drying up,” Schwarze added, since international institutions like the World Bank are not making up the difference.

Some groups at London Climate Action Week were looking to change that, hosting roundtables about solar development, green industrialization and general investment in developing countries. And the week before the conference, an internationally backed capital pool known as the Climate Investment Funds pledged $250 million to Brazil and Mexico each, which its officials said would help trigger over $5 billion in private financing.

Developing countries often struggle to attract investor interest because they don’t have a “pipeline of bankable projects” that show credibility or viability, said Chuks Okereke, director of the Centre for Climate and Development at Alex Ekwueme Federal University, Ndufu-Alike, in Nigeria.

It’s a vicious cycle, he said: “One of the reasons that they need the money in the first place is that they don’t have the capacity, and the lack of capacity is affecting the ability to prepare the project.”

Okereke added that aid must come via grants rather than loans, which can trap countries in debt. But loans accounted for nearly 70 percent of international climate finance as of 2024, according to Oxfam International.

A new partnership aims, in part, to address that. Sustainable Energy for All (SEforALL), a U.N.-hosted energy group, and the nonprofit Global Climate Finance Centre signed an agreement during London Climate Action Week to build emerging economies’ capacity for sustainable projects, making them more attractive for investors.

“The amount of money that is required for the transition, it can’t be done by the public sector alone,” said Tamojit Chatterjee, a senior officer at SEforALL. “You need the private sector to come in at scale, and the job of the public sector is to make the environment conducive so that the private sector can come in and scale up things.”

Mikael Melin, SEforAll’s director of partnerships and development, said the partnership can “translate global ambition into concrete action,” creating a pathway to “unlock finance for those investments that are, to a large extent, missing in geographies like sub-Saharan Africa.”

Schwarze said the burden will ultimately fall on multilateral development banks to meet investment targets.

“This move from the billions to the trillions will mainly, at heart, be driven by what the multilateral development banks are doing,” Schwarze said.

Okereke added that developing countries rely on “blended finances,” combining various banks, private investors and direct international aid.

Chatterjee remains confident that renewable energy’s economic growth will unite with political interest to drive climate investment.

“This is a good moment because you have the technology policies, the political will, the innovation on business models and the investment side all coming together,” he said.