Public, private and philanthropic money is proving to be a successful mix to accelerate climate action.

Synopsis: Every first and third Tuesday of the month, The Straits Times analyses the beat of the changing environment, from biodiversity conservation to climate change.

When it comes to climate action, financiers are increasingly turning to the Three Ps to find the cash they need: Public, private and philanthropic money.

With trillions of dollars needed annually to shift the world away from polluting fossil fuels, cash-strapped governments don’t have the financial muscle to do this. Much of the money needs to come from the private sector, with philanthropy providing a much needed boost.

This mix of money from all three, called blended finance, is designed to be cheaper concessional capital. It helps de-risk early-stage investments, especially in developing nations, and helps attract more investors. In 2023, climate blended finance totalled US$18.3 billion, up from about US$6 billion in 2015.

But while the amount is growing, it’s still a fraction of what is needed. Are there positive signs blended finance can be significantly scaled up? And is there a risk only certain types of projects will be attractive candidates for blended finance?