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When the Paris Agreement was concluded with its famous 1.5°C target, it marked an unprecedented moment of global alignment, providing orientation, predictability and a framework for action. A decade later, the context has shifted considerably: geopolitical tensions are rising, climate-related disruptions are becoming more frequent, and economic growth prospects are weakening. As a result, translating climate commitments into concrete investment decisions has become both more necessary and more difficult. Lars-Hendrik Röller writes about his impressions of COP30 and how guarantees, as innovative risk-sharing instruments, offer a credible route from ambition to implementation.
In November, the world’s leading climate negotiators gathered for the thirtieth time at the Conference of the Parties (COP30) in Brazil, trying to agree on a shared plan to tackle climate change. With the United States having withdrawn from the Paris Agreement for the second time under President Trump and multilateral norms under increasing strain, the conditions for meaningful progress could hardly have been more challenging.
Brazil’s choice to host the COP in Belém was therefore strategic. Located on the edge of the Amazon rainforest, the location brought the negotiations into direct contact with a region profoundly shaped by global economic decisions. It served as a call for action that climate policy is not an abstract exercise but has real implications for development and prosperity.
In this setting, a recurring theme emerged across formal sessions and informal exchanges alike: the growing disconnect between climate ambition and available financing. Following the agreement at COP29 on a New Collective Quantified Goal of at least USD 1.3 trillion in annual climate finance by 2035, the discussion in Belém was less about defining objectives and more about identifying credible ways to deliver them—capturing the Brazilian Presidency’s vision of the conference as an “implementation COP”.
Public budgets are under increasing pressure as governments grapple with competing policy priorities and shrinking fiscal space across advanced economies and emerging markets alike. At the same time, private capital – while abundant globally – remains insufficiently mobilized for climate action. About 90% of green investments still go to developed economies, while emerging markets and developing economies (EMDEs) face the highest investment needs for the green transition.
Against this backdrop, the expectations placed on the private sector as a catalyst for climate action in EMDEs have never been greater. Yet many of the conversations in Belém circled back to the same obstacle: investment risks are perceived as too high. Projects that are technically sound, climate-aligned, and socially transformative often fail to reach financial close because risks cannot be structured at levels acceptable to private investors.
In discussions with my Co-Chair of the Green Guarantee Group (GGG), Faruk Yusuf Yabo, Permanent Secretary of the Nigerian Ministry of Solid Minerals Development, these challenges crystallize clearly. What is missing is not ambition or projects, but the ability to channel financing at scale and de-risk it sufficiently to attract global capital. This is not just a Nigerian story; it is one shared by many EMDEs.
At COP30, guarantees repeatedly emerged as one of the most powerful yet underused blended financing tools available to governments, development banks, and investors, helping the private sector gain confidence in investments in EMDEs.
The numbers speak clearly. According to the OECD, guarantees accounted for 23% of all private finance mobilized globally between 2020 and 2023, placing them among the top three leveraging mechanisms. In 2023 alone, guarantees mobilized USD 17 billion in private capital. Across markets, they have demonstrated the capacity to mobilize five to seven times their nominal value in additional investment.
In a world of limited fiscal space, guarantees offer a highly promising opportunity. They shift risk off balance sheets, create bankable project structures, and crowd in institutional investors who might otherwise stay on the sidelines. For countries facing high costs of capital, guarantees can thus be an enabler for climate action. This reality was broadly acknowledged with the Baku-to-Belém Roadmap, published by the Brazilian and Azerbaijani presidencies, explicitly recognizing guarantees as a key lever for mobilizing climate finance.
Despite their demonstrated effectiveness, guarantees are not yet widely used. Challenges surrounding political coordination, technical alignment, and the enabling framework conditions required for deployment remain major hurdles.
Against this backdrop, the Green Guarantee Group (GGG) has emerged as both a high-level political convening platform and a growing technical network. Jointly led by the governments of Germany and Nigeria, the initiative provides policymakers with concrete recommendations to improve both the deployment and effectiveness of guarantees. During COP30, the GGG launched the GGG Guarantee Directory, a practical matchmaking solution: the first publicly accessible, centralized database of guarantee products offered by public and private institutions worldwide.
These efforts signal a gradual shift from isolated pilot projects toward more coordinated approaches: regional platforms are standardizing pipelines, transparency is improving through new reporting mechanisms, and development banks are collaborating on joint risk-sharing structures. These are not minor tweaks—they are the foundations of a climate finance architecture capable of unlocking hundreds of billions of dollars in private capital annually.
My commitment through the GGG and the Berlin Global Dialogue is to help build exactly that: an ecosystem in which climate finance becomes more effective, more reliable, and truly global.
COP30 demonstrated that despite geopolitical tension and economic uncertainty, the international community retains the capacity and the will to rethink and redesign the climate finance architecture. If we are serious about meeting the targets set in Paris ten years ago, then we must finally mobilize finance at the scale required. Guarantees are no miracle cure. But they are among the most powerful levers we have to match ambition with action.
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