Catalytic capital is key to emerging markets badly in need of decarbonisation funding

BILLIONS of dollars are being raised to build solar plants and wind farms, but capital is flowing to where returns are highest – not where needs are greatest.

Catalytic capital is crucial to stemming this flow, and some market players say investors with lofty goals may be better off taking a commercial stance over a developmental one.

“A lot of people are investing in decarbonisation, but focused less on emerging markets because a lot of the time they carry more risk,” said Luke Edwards, managing director at Brookfield Asset Management’s renewable power and transition group.