Unlocking Climate Finance: Overcoming Barriers to Private Investment in South Asia

This paper examines the challenges of mobilising private capital for climate finance in South Asia as the paucity of financial resources exacerbate the regions capacity to counter the persisting climate change issues. Although public funding has traditionally accounted for the majority of climate-related investments, but it remains insufficient to satisfy the region’s NDCs and its resilience objectives. The study looks into institutional, structural, and regulatory impediments that prevent private investment, such as inconsistent policies, fragile financial markets, a lack of data, and geopolitical risks. The study uses a mixed-methods approach to evaluate the existing situation and outline future directions by combining regional statistics, policy reports, and case studies. In order to counter climate concerns and involve private stakeholders, it highlights the potential of blended finance, public-private partnerships, and cutting-edge instruments like green bonds and credit guarantees. In order to promote sustainable financial flows, the paper also emphasises the importance of institutional reforms, strong climate information systems, and regional cooperation. The paper makes the case that enabling private investment is essential for fulfilling South Asia’s economic aspirations and ameliorating its current climate action efforts. In order to facilitate increased contribution of private stakeholders, the paper argues for a paradigm shift towards cooperative, market-responsive climate governance.