Why this conversation matters right now

Despite the growing trend in global climate finance, emerging markets and developing economies (EMDEs) face a structural gap that domestic capital alone cannot fill. Domestic financial markets in many EMDEs cover only around half of what the climate transition requires. The question the panel addressed isn’t whether private investors care about sustainability and impact, but rather why capital that flows freely in mature markets still hesitates when the same projects cross into EMDEs.

Five insights from the discussion

1. Capital deployment

There is no single "blended finance", instruments must match barriers. A recurring thread was the danger of treating blended finance as a catch-all solution. As Borja noted, the real skill lies in diagnosing the specific friction blocking a deal, whether that's political risk, currency mismatch, a thin project pipeline, or missing data, and then selecting the right instrument to address it.

The map looks something like this:

• Policy and regulatory risk call for guarantees or political risk insurance
• FX mismatches require local-currency tranches, pooled hedging, or swap structures
• Weak project pipelines need technical assistance and project preparation grants
• Data gaps need investment in measurement and reporting frameworks

"You don't have to lose return to drive impact. It took a while to prove but it can happen." – Shivani Arora, Citi Social Finance

Shivani's point was backed by 12 years of evidence at Citi. Working with philanthropy, balance sheet lending, trade finance, and local financial institution partnerships can be combined in ways that are commercially viable and impactful simultaneously.

2. FX risk

Currency risk is the silent deal-breaker that rarely makes headlines. Borja put it bluntly: the ability to lend in local currency is often the deciding factor for whether a deal works at all. Project revenues are generated in local currency; if the financing is in dollars or euros, depreciation can wipe out the economics. Commercial hedging is frequently unavailable or too expensive in frontier markets.

Ana added a practical nuance from Cygnum's experience: even when you've structured something carefully, hedging in dollars can still leave you exposed to returns that don't materialise if the currency moves. Local-currency solutions require deep relationships in-country, which is part of why physical presence and local expertise matter so much.

"International investors tend to overestimate the risk in emerging markets – that's actually an opportunity." – Jo Fry, British International Investment (BII)

3. Sector – Opportunity beyond energy

While energy systems dominate current emerging market climate finance flows, the panel pointed to several other sectors where the opportunity is growing rapidly.

Agriculture and food security came up repeatedly. Shivani described the depth of the value chain: from informal smallholder farmers to distributors to financers, with microfinance models that started in cattle farming and sewing now expanding into food security and healthcare. Borja pointed to World Bank-linked programmes supporting farmers and micro-financing institutions in small local-currency amounts at scale.

Water, mobility, and green buildings were highlighted by Jo, along with adaptation and resilience infrastructure which are sectors that tend to involve smaller tickets, making aggregation vehicles important.

Youth employment and job creation also featured: with an estimated one billion people expected to enter the global job market in the next 15 years, panellists flagged the intersection of climate finance and economic development as a defining theme for the decade ahead.

4. Market Building

The goal isn’t a single investment, it’s to build a market. Jo articulated a distinction that is easy to miss: BII's mandate isn't just to find good individual deals, it's to deepen capital markets in countries where they're shallow. Investments in EV manufacturing in India or safari tourism in Ethiopia matter not just for their direct returns but for the data, networks, and market confidence they generate.

Anchoring bond issues, helping countries develop climate frameworks, and investing in Nepal or Sierra Leone alongside more established markets – these are acts of market construction, not just capital allocation. The goal is to make the next wave of investors feel confident enough to follow.

Ana echoed this from Cygnum's angle: investors want to go into emerging markets but often don't know how. What unlocks them is a combination of training, policy explanation, data provision, and physical presence. Capital follows understanding.

5. The “ESG” Backlash

When the panel was asked about the current ESG backlash, the response was notably calm. Borja described a posture of "silent sustainability" where institutions continue to do what they've always done, without necessarily flagging it in external communications. The divergence between public and private sector approaches was noted: public institutions face more scrutiny and labelling pressure; private actors can be more pragmatic.

The underlying logic the panellists kept returning to is that clients in emerging markets don't need an ESG narrative. What they need is finance that supports the sectors their economies depend on. When those sectors overlap with climate or social outcomes, it's a consequence of the economics, not the branding.

Editor’s synthesis

1. The financing gap is structural, not cyclical. EMDEs need $3.9 trillion annually in mitigation finance by 2030. No political cycle resolves this, only sustained financial architecture does.
2. Think in instruments, not slogans. "Blended finance" and "impact investing" are umbrellas for dozens of distinct structures. The value of practitioners like these panellists lies precisely in knowing which tool fits which friction.
3. Currency risk deserves your attention. FX mismatch is often the invisible constraint on otherwise viable EMDE climate deals. Follow local-currency financing innovations closely.
4. Careers in this space are non-linear. Three of the four panellists moved through at least three institutions: commercial banks, DFIs, and multilaterals before reaching their current roles. Building breadth across transaction types matters as much as depth.
5. The action is in agriculture, water, and jobs as much as energy. Don't anchor too hard on the clean energy trade. The next decade's biggest sustainable finance opportunities may be in food systems, water access, and employment in high-growth demographics.

Graduate schemes & early-career pathways

Our panellists' organisations and close peers all run structured programmes for early-career professionals

British International Investment

BII Graduate Programme

Jo specifically mentioned BII's graduate scheme. BII invests across Africa, South Asia, and Southeast Asia in financial services, climate, and infrastructure. The programme gives early-career professionals exposure to deal origination, portfolio management, and impact assessment across markets that major banks rarely touch at analyst level.

World Bank Group

Young Professionals Program (YPP)

The World Bank Group's flagship early-career entry point for those with a Master's degree and under 32. Borja's trajectory: EBRD → BII → Citi → IFC → is one variant. The YPP offers rotations across investment, advisory, and economics divisions in emerging markets. Highly competitive; applications typically open annually.

Citi

Corporate Banking Graduate Roles

Shivani joined Citi over 12 years ago as the Social Finance team was small and pivoting. Citi recruits into Corporate Banking and Public Sector Banking through its analyst and associate programmes, with Social Finance being a niche but growing segment. Watch for openings in emerging markets lending and structured finance.

IDB Invest

Junior Professional Programme

The private sector arm of the Inter-American Development Bank, where Borja also worked. Focused on Latin America and the Caribbean, IDB Invest runs structured early-career entry routes for those interested in blended finance and private sector development in EM.