Private climate finance cannot be a substitute for direct public support, and adaptation in particular is likely to offer few commercially profitable opportunities for private financiers. Before the GCF considers the role of the private sector in meeting the climate finance needs of developing countries, it should first ask: what are the needs of the people living in those countries? Second, can private finance and support for the private sector help to equitably and effectively meet those needs, in accordance with the GCF Governing Instrument and the UNFCCC?

This report attempts to respond to these questions by de-constructing ideological notions of “leveraging” and “crowd- ing in” private finance and examining the track record of the private sector, private financiers and development finance institutions (DFIs) in developing countries. The report concludes that the GCF should approach private companies and financiers slowly and with a high degree of caution.