As traditional sources of climate finance become increasingly constrained, dedicated green financial institutions have emerged as critical enablers of investment in low-carbon and climate-resilient infrastructure.

The State of Green Banks 2025 presents a comprehensive review of financial institutions designed to overcome key barriers to private capital mobilization for climate-aligned investments—commonly referred to as green banks—including high perceived risk, information asymmetries, and policy misalignment.

A collaborative effort by Climate Policy Initiative (CPI), the Natural Resources Defense Council (NRDC), the Green Finance Institute, and Bezos Earth Fund, this report draws on new data from 50+ public financial institutions across more than 20 countries. Of these, 36 are either based in or actively engaged with emerging markets and developing economies (EMDEs)—regions where the demand to increase fit-for-purpose climate finance is particularly acute.

The Role of Green Banks in Bridging the Climate Finance Gap

Building upon the foundational State of Green Banks 2020, the 2025 report offers new insights into the design, operation, and strategic deployment of green banks across diverse country contexts.

Overview of findings

• Global Landscape: Green banks are growing in number and influence. While standalone institutions are more common in developed economies, EMDEs have increasingly adopted alternative models such as green finance facilities within existing public development banks.
  
• Institutional Models: The report identifies four primary models for sustainable finance—standalone institutions, green public development banks, internal green windows, and country platforms—providing a practical taxonomy to guide new initiatives.
  
• Persistent Barriers: Despite progress, many green banks face constraints, including limited access to capital, inadequate regulatory frameworks, and capacity shortfalls. The report outlines approaches to address these challenges through innovative design and stakeholder engagement.
  
• Sustainability Frameworks: Green banks’ success depends on their ability to achieve financial, environmental, and political sustainability. The report presents a conceptual framework for integrating these elements into establishing and operating green banks.

Recommendations for Stakeholders

Informed by extensive stakeholder consultations, the report outlines actionable recommendations to enhance the role of green banks in accelerating climate finance. These include strategies for institutional design, product structuring, risk mitigation, and alignment with national and international climate priorities.

Additionally, the report proposes a green bank accelerator. Three implementation options were identified within the accelerator platform addressing the identified success factors.

1. Establishing a new green bank design initiative to offer technical and financial assistance.
2. Expanding an existing support platform, such as by integrating a dedicated green finance pillar within the Finance in Common Innovation Lab.
3. Building a coalition of existing initiatives to promote knowledge sharing and coordinated action across the green finance ecosystem.

A short summary, the Green Bank Design Guide, provides easy reference tables to the relative suitability of each of the four green bank types to country circumstances and options for the above recommended international support mechanisms for green bank development.

Read the full report State of Green Banks 2025