Sustainability Atlas
Policy, Standards & Strategy·13 min read··...

Playbook: adopting Public-private partnerships & climate governance in 90 days

A step-by-step rollout plan with milestones, owners, and metrics. Focus on implementation trade-offs, stakeholder incentives, and the hidden bottlenecks.

In 2024, global climate finance crossed a historic threshold: private sector contributions exceeded $1 trillion for the first time, representing over half of the $1.9 trillion in total climate finance tracked by the Climate Policy Initiative. Yet this milestone obscures a troubling reality—annual infrastructure investment must reach $6.9 trillion by 2030 to meet climate-compatible Sustainable Development Goals, leaving a gap that neither public nor private sectors can bridge alone. Public-private partnerships (PPPs) have emerged as the critical mechanism for closing this divide, with the World Bank publishing five new sector-specific Climate Toolkits for Infrastructure PPPs in 2024 alone. For organizations in the Asia-Pacific region navigating this landscape, the question is no longer whether to engage with climate PPPs, but how to do so effectively within constrained timelines and budgets.

Why It Matters

Infrastructure accounts for 79% of all global greenhouse gas emissions, with construction alone contributing 25% (World Bank, 2024). This makes the infrastructure sector both the largest climate problem and the most significant opportunity for decarbonization. Traditional public financing mechanisms cannot scale fast enough to address this challenge—developing nations face a $15 trillion infrastructure shortfall, and many require infrastructure investment equivalent to 4.5% of GDP annually just to maintain current development trajectories.

Public-private partnerships offer a structural solution by combining public sector regulatory authority and concessional capital with private sector operational efficiency and innovation capacity. The economic case is compelling: climate inaction carries catastrophic costs, with projections indicating a 15% GDP loss by 2050 under 2°C warming and 30% by 2100 under 3°C warming scenarios. The climate adaptation market, currently generating approximately $1 trillion in annual revenue, is projected to grow fourfold to $4 trillion by 2050, creating substantial commercial opportunities for early movers.

For Asia-Pacific organizations specifically, the stakes are particularly high. The region faces disproportionate climate risks—from rising sea levels threatening coastal megacities to intensifying monsoon patterns disrupting agricultural supply chains—while simultaneously housing the manufacturing and energy infrastructure essential to global decarbonization. Regional PPP frameworks are evolving rapidly, with Singapore launching the Future Industries Partnership in May 2025 to accelerate heavy industry decarbonization across Asia and the Middle East.

Key Concepts

Understanding climate PPPs requires familiarity with several foundational concepts that distinguish them from traditional infrastructure partnerships.

Blended Finance Architecture: Climate PPPs typically employ blended finance structures that combine concessional public capital (accepting below-market returns) with commercial private investment. The concessional layer absorbs first-loss risk, de-risking the investment for private partners. ALTÉRRA's $350 million commitment to BlackRock's Climate Finance Partnership in September 2024 exemplifies this model, with $250 million structured as anchor catalytic capital to attract additional institutional investors.

Climate Risk Allocation: Traditional PPP contracts assign risks to the party best positioned to manage them. Climate PPPs introduce novel risk categories—physical climate risks, transition risks, and policy risks—that require creative allocation mechanisms. Force majeure clauses designed for rare events prove inadequate when climate-related disruptions become routine. Leading practitioners now incorporate climate scenario analysis into contract design, with risk-sharing arrangements that adjust over multi-decade concession periods.

Additionality and MRV: Climate PPPs must demonstrate additionality—proving that emissions reductions or resilience improvements would not have occurred through business-as-usual investment. Measurement, Reporting, and Verification (MRV) systems provide the evidentiary foundation for climate claims. International concessional climate finance allocated 42% to mitigation and 36% to adaptation in 2022, with rigorous MRV requirements for both categories.

Governance Frameworks: The regulatory landscape is rapidly standardizing around disclosure-based governance. The EU Corporate Sustainability Reporting Directive (CSRD) became effective in 2025, applying double materiality requirements to companies with EU operations. The IFRS S2 climate disclosure standard, adopted by 582 companies in 2024, provides an internationally recognized framework. California's SB 253 and SB 261 mandate GHG emissions and climate risk disclosure for large companies operating in the state.

What's Working and What Isn't

What's Working

Sector-Specific PPP Toolkits: The World Bank's 2024 Climate Toolkits for Infrastructure PPPs provide actionable frameworks across five sectors: wind and solar energy, hydropower, transport, water and sanitation, and digital/ICT infrastructure. These toolkits embed climate considerations directly into project preparation, procurement, and implementation, reducing the ad-hoc nature of climate integration that plagued earlier initiatives.

Multilateral De-Risking Instruments: Development finance institutions (DFIs) have proven effective at catalyzing private investment through first-loss guarantees, political risk insurance, and concessional co-investment. Bilateral DFIs contributed 33% and multilateral DFIs contributed 30% of international concessional climate finance in 2022. The European Bank for Reconstruction and Development's Green Economy Transition approach (2021-2025) has mobilized substantial private capital for low-carbon investments across its geographies.

Public-Private-Philanthropic (4P) Models: Over 50 "4P models" combining public, private, and philanthropic capital have launched in the last two decades. Initiative 20x20 mobilized $2.5 billion in private capital for land restoration across more than 50 million hectares in Latin America, demonstrating the scaling potential of multi-stakeholder partnerships. Philanthropic climate funding increased significantly in 2023, outpacing overall philanthropy growth for the first time since 2020.

Corporate-Startup Partnerships: Corporate investors demonstrate higher success rates than pure venture capital in climate technology investments, particularly when investing strategically in their core sectors. Research shows 42% of transport corporation investments flow to transport startups, and 59% of agriculture corporation investments target agriculture startups, suggesting sector-specific knowledge transfers improve outcomes.

What's Not Working

Cross-Border Private Investment Barriers: Despite $210 trillion in global assets under management, over 90% of private climate flows remain within national borders. Risk perceptions, market failures, and the absence of standardized climate risk frameworks constrain international investment precisely where capital needs are greatest. Seventy-five percent of domestic concessional climate investment concentrates in Western Europe, with just 10% reaching emerging markets outside East Asia.

The Commercial-Ready Gap: Clean energy companies have attracted investment, but 75% of deals remain at Seed or Series A stages. Projects requiring $45-100 million for "first-of-a-kind" commercialization face a persistent funding gap. The "valley of death" between demonstration and commercial scale remains the critical barrier to translating innovation into deployed infrastructure.

Regulatory Fragmentation: While disclosure frameworks are converging, implementation timelines and requirements vary dramatically. The SEC's proposed climate rule faces ongoing legal challenges in the United States, while European requirements under CSRD impose more stringent obligations. This fragmentation increases compliance costs and complicates cross-border PPP structuring.

Climate Uncertainty in Contracts: Traditional PPP contracting mechanisms struggle to accommodate climate uncertainty. Long-duration concession agreements require revenue predictability, but climate physical risks are inherently difficult to quantify over 20-30 year horizons. Insurance products for climate-related events remain underdeveloped, and force majeure doctrines are being tested by increasingly frequent "unprecedented" weather events.

Key Players

Established Leaders

World Bank Group: Through its PPP Resource Center and Climate Toolkits, the World Bank provides foundational infrastructure for climate PPPs globally. The organization published Country Climate and Development Reports covering 72 countries by November 2024, creating roadmaps for national climate investment strategies.

European Bank for Reconstruction and Development (EBRD): EBRD's Green Economy Transition approach sets ambitious climate investment targets across its operational regions. The institution reviewed its Environmental and Social Policy in 2024, strengthening climate integration requirements for all financed projects.

Asian Development Bank (ADB): ADB serves as the primary multilateral development bank for Asia-Pacific climate infrastructure, with deep regional expertise and established country relationships. The bank's climate operations integrate with national development planning processes across member countries.

BlackRock Climate Finance Partnership: The world's largest asset manager operates a dedicated climate infrastructure platform, with ALTÉRRA's 2024 commitment demonstrating its ability to attract catalytic capital from sovereign wealth sources.

Emerging Startups

Third Derivative (RMI): An accelerator backed by the Rocky Mountain Institute, Third Derivative partners with corporations through initiatives like the Future Industries Partnership to accelerate hard-to-abate sector decarbonization.

Seabound: A Y Combinator-backed startup developing carbon capture technology for maritime shipping, targeting 95% CO2 reduction. The maritime sector's decarbonization requires novel PPP structures given its international regulatory complexity.

Phase Biolabs: Recipient of the Breakthrough Energy Fellowship, Phase Biolabs converts CO2 into solvents and fuels, representing the emerging category of carbon utilization startups that PPPs can help scale.

Key Investors & Funders

Breakthrough Energy Ventures: Bill Gates-backed fund investing in deep science climate solutions with gigaton-scale impact potential. The fund operates across stages and provides patient capital suitable for infrastructure timelines.

Energy Impact Partners: A utility-backed investor with deep grid, storage, and cleantech software expertise. The fund's industry connections facilitate corporate-startup partnerships and offtake arrangements.

P4G (Partnering for Green Growth and the Global Goals 2030): A grant-making platform that awarded $3.8 million to 14 climate startups in October 2025, focusing on emerging markets including Indonesia, Vietnam, Kenya, and South Africa.

Sector-Specific KPI Benchmarks

SectorPrimary KPITarget RangeMeasurement FrequencyData Source
Renewable Energy PPPLevelized Cost of Electricity (LCOE)$0.03-0.05/kWh (solar), $0.025-0.045/kWh (wind)QuarterlyIEA, IRENA
Transport InfrastructuretCO2e per passenger-km<50g for rail, <100g for bus rapid transitAnnuallyUNFCCC MRV
Water & SanitationEnergy intensity (kWh/m³)<0.5 for treatment, <0.3 for distributionMonthlyWorld Bank IBNET
Industrial DecarbonizationScope 1+2 emissions intensity>4% annual reduction from baselineAnnuallyCDP, TCFD
Climate AdaptationEconomic losses avoided>$5 return per $1 investedProject lifecycleGCA, UNDRR

Examples

1. Singapore Green Finance Centre: Launched as a partnership between the Monetary Authority of Singapore, Imperial College London, and Singapore Management University, the Centre develops climate risk assessment methodologies and green finance standards for the Asia-Pacific region. The initiative demonstrates how public-academic-private partnerships can establish regional climate governance infrastructure, training practitioners and creating standardized frameworks that reduce transaction costs for subsequent PPPs.

2. Vietnam Renewable Energy Auction Program: Vietnam's Ministry of Industry and Trade partnered with the World Bank and ADB to structure competitive auctions for solar and wind capacity. The program attracted over $10 billion in private investment between 2019-2024, rapidly scaling renewable deployment. Key success factors included transparent tariff-setting mechanisms, standardized power purchase agreements, and government guarantees for off-taker creditworthiness. The model offers a replicable template for emerging market energy transition.

3. Initiative 20x20 Latin America Land Restoration: This regional partnership mobilized $2.5 billion in private investment for restoring degraded land across Latin America. By aggregating restoration projects across multiple countries, the initiative achieved scale sufficient to attract institutional investors. Payment-for-ecosystem-services mechanisms provided revenue streams, while blended finance structures de-risked early investments. The initiative demonstrates how conservation and restoration PPPs can achieve commercial viability.

Action Checklist

  • Days 1-15: Landscape Assessment – Map existing climate policies, disclosure requirements, and PPP frameworks applicable to your jurisdiction. Identify potential public sector partners and their strategic priorities. Assess organizational readiness for climate governance requirements including CSRD, ISSB, or regional equivalents.

  • Days 16-30: Stakeholder Alignment – Secure executive sponsorship with clear climate governance mandate. Establish internal working group spanning legal, finance, operations, and sustainability functions. Engage potential public partners to understand their procurement timelines and partnership models.

  • Days 31-50: Structure Design – Develop preliminary PPP structure addressing risk allocation, financing mechanism, and governance framework. Identify appropriate de-risking instruments (guarantees, insurance, concessional capital). Draft term sheets for partner negotiations.

  • Days 51-70: Due Diligence and MRV – Conduct climate risk assessment using scenarios aligned with TCFD recommendations. Establish baseline emissions and develop MRV protocols. Engage third-party verification providers for additionality assessment.

  • Days 71-90: Documentation and Launch – Finalize partnership agreements with appropriate climate clauses and adaptive mechanisms. Establish governance committee with regular review cadence. Launch pilot activities with defined milestones and KPIs.

FAQ

Q: What distinguishes climate PPPs from traditional infrastructure PPPs?

A: Climate PPPs differ in three fundamental dimensions. First, they require explicit climate risk assessment and allocation mechanisms that traditional PPPs lack—physical risks, transition risks, and policy risks must be contractually addressed. Second, climate PPPs typically employ blended finance structures combining concessional and commercial capital, whereas traditional PPPs often rely solely on commercial terms. Third, climate PPPs require robust MRV systems to demonstrate additionality and track emissions impacts, creating ongoing verification obligations absent from conventional infrastructure contracts.

Q: How should organizations approach the fragmented regulatory landscape for climate governance?

A: Regulatory fragmentation creates both compliance burdens and arbitrage opportunities. Organizations should adopt a "highest common denominator" approach—structuring governance and disclosure practices to meet the most stringent applicable requirements (typically EU CSRD). This approach future-proofs against regulatory convergence while simplifying multi-jurisdictional operations. For Asia-Pacific organizations, monitoring Singapore's and Hong Kong's evolving disclosure requirements provides early indicators of regional trajectory.

Q: What are the critical success factors for PPP negotiations with government partners?

A: Government partners prioritize three outcomes: demonstrable climate impact, value for public money, and political viability. Successful negotiations require quantified emissions reduction or adaptation benefits aligned with national determined contributions (NDCs), clear additionality arguments showing private capital wouldn't deploy otherwise, and risk allocation that protects public balance sheets while providing reasonable returns. Building relationships with technical agencies (not just political principals) ensures continuity across electoral cycles.

Q: How can smaller organizations participate in climate PPPs typically designed for large-scale infrastructure?

A: Aggregation mechanisms enable smaller organization participation. Project finance structures can bundle multiple smaller projects into investable portfolios. Industry associations and chambers of commerce often serve as intermediaries, pooling demand across member organizations. The P4G model demonstrates how early-stage ventures can access partnership opportunities through grant-to-investment pathways, building track records that qualify them for larger initiatives.

Q: What timeline should organizations expect from PPP initiation to operational impact?

A: Climate PPPs typically require 18-36 months from concept to financial close, with significant variation based on procurement complexity and regulatory requirements. The 90-day playbook focuses on establishing partnership readiness and initiating negotiations, not completing transactions. Organizations should plan for multi-year engagement cycles, with interim milestones including memoranda of understanding, feasibility studies, and competitive procurement stages. Pilot projects with reduced scope can demonstrate proof-of-concept within 12-18 months.

Sources

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