[15] The public and the private sector have to work hand in hand to overcome these challenges and to scale up green finance. The IMF (International Monetary Fund) recently mapped out several ways for the public sector to take on parts of the investment risk through blended finance. One avenue for the public sector could be to take an equity position in climate projects.
[16] This would make these projects more attractive to private investors. Multilateral development banks – like the European Investment Bank – will play a major role in blending public and private finance to fund green energy projects. [17] In a nutshell: Establishing mutually beneficial partnerships between Europe and developing economies and emerging markets is an important factor for the green transition.