INVEST

USAID’s INVEST initiative works with the private sector to mobilize capital for development. It works through a network of approximately 600 private sector partners with expertise in investment and development.  

While INVEST was not designed as a climate finance mechanism, as of December 2023 it had mobilized $301.6 million for climate-related efforts—22 percent of the $1.4 billion it has mobilized in total. The initiative has undertaken approximately 30 climate finance activities in 25 countries—mostly in clean energy, followed by adaptation and sustainable landscapes.  

Addressing the climate crisis at the required scale demands the active involvement of a large and diverse ecosystem of investors. This task goes beyond the realm of impact investors and development finance institutions alone. To achieve true economic transformation, engaging all types of financial sources becomes imperative, including commercial banks, pension funds, venture capital, and other key players in the financial landscape. For INVEST, institutional investors have proven to be the most significant source of financing. 

INVEST has captured its experience in a series of learning resources aimed at donors and development professionals. Two of the most recent share lessons from INVEST’s catalytic support to financial vehicles and funds and use of transaction advisory services to bridge the gap between investors and investment-ready firms and projects. While these resources are not specific to climate finance, the approaches described are easily adaptable to climate activities.   

For example, INVEST worked with the CARICOM Development Fund to structure and launch a $100 million blended finance vehicle focused on growth and resilience in the face of climate change. The Fund will make investments in resilience-focused small and medium enterprises and critical infrastructure projects in the Caribbean.  

INVEST also provided transaction advisory services to a Tunisian company that converts waste from dairy farms into electricity and fertilizer. INVEST support helped the company secure $2.7 million in equity investment to support its growth. This investment will lead to a reduction of approximately 80,000 tons of CO2 equivalent emissions over four years.

Features

Transaction Advisory Services

Transaction advisory services help reduce barriers to investment by facilitating access to information, helping firms become investment-ready, and structuring deals that help bring about both financial gains and development impact. Through INVEST, transaction advisors have facilitated large-scale investments in critical areas.

Read the Learning Brief

Catalytic Funding

Catalytic funding is designed to mitigate risk and improve a fund’s overall viability to attract new investment for development goals. USAID can provide this type of support to an investment fund or financial vehicle to enable impactful transactions that may not have occurred without donor intervention.

Read the Learning Brief

Mobilizing Institutional Investment

Institutional investors can be a great match for certain types of investments in emerging markets. They possess long-term, patient capital and are not dependent on immediate returns, which fits well with the longer timelines in infrastructure investments, for instance. Many institutional investors have mandates to make investments that support climate action. But they also have specific requirements—for example, they will typically only make larger, low-risk investments—that may require assistance to align with the areas where they’ll have the greatest impact.

Read the Resource Guide

A Network Approach to Private Sector Engagement

INVEST’s network approach to relationship management has helped to engage a diverse group of private sector firms, many of them local entities and/or new to working with USAID. The Finance and Investment Network (FIN), with approximately 600 members, brings invaluable skills and expertise to USAID. 

Read the Learning Brief
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Catalyzing Private Finance for Climate Action: Learning Brief and Case Studies

This overview describes how USAID can build on its use of blended finance to continue mobilizing private investment for climate mitigation, adaptation, resilience, and enabling environment solutions. Eight case studies help build an understanding of the different blended finance tools and approaches that can be used for climate action—and the role of donors in supporting them.

View: Learning Brief 
View: Case Studies

The Action Plan for Climate and SDG Investment Mobilization

Developed in consultation with over 100 public, philanthropic, and private stakeholders, the Action Plan identifies how a small amount of public and philanthropic financial resources can act as a systemwide catalyst, combining strategically with multilateral development bank and development finance institution (MDB/DFI) investments and private capital to drive systemic change. 

View Action Plan
Learn what blended finance is and how it encourage private investment that achieves social and environmental results.
Blended finance is an innovative approach that strategically deploys public resources to attract private capital for social gain.
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We need a better approach to climate finance, one that centers on the people who live on and manage the world’s most precious resources.
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