There’s a growing consensus that we are hitting the limits of the climate-finance playbook — the long-term pledges, the giant coalitions, and the initiatives. They did their job in putting climate on the business agenda, but we’re now bumping into the ceiling of those strategies.

From the lead-up to COP27 in Egypt to the run-up to COP28 in Dubai, the Middle East and North Africa (MENA) region was abuzz with net-zero pledges and climate alliances. Two years later, the appetite for funding a green transition has waned, and the region’s green-economy mood has cooled. Annual investment is less than half of what’s needed this decade for the region to stay on track for net zero by 2050.

“Over the past few years, we have seen a wave of public commitments across the region—from governments, corporates, and investors alike—all pledging to accelerate action on climate. Yet turning those promises into real climate finance at scale has been painfully slow. The truth is, momentum stalls when there is not enough pressure, transparency, or accountability to ensure follow-through,” says Jessica Robinson, Partner at Solve Strategies.

In the region, experts say, there is a gap between implementation and execution, and frustration over climate funding. “As of November 2023, MENA received only 6.6% of global climate financing and around $24.4 billion, including co-finance, far below regional needs,” says Alice Gower, Partner at Azure Strategy. 

She adds that funding is heavily concentrated in a handful of countries, leaving many without the resources to implement mitigation or adaptation plans. “Complex applications, long approval times, and the need to demonstrate strong institutional capacity disadvantage the least developed and conflict-affected states, where climate risks are highest, and frustration with access barriers is growing.”

Robinson adds that COP28 offered what could have been a breakthrough moment, a chance to turn ambition into actual funding for climate solutions. “But in practice, very few of those opportunities were seized.”

Climate impacts are worsening in the region, characterized by rising temperatures, unpredictable rainfall, and increasing water scarcity. 

Experts say it’s time to stop “greenwishing” and “greenwashing” and start thinking about the instruments that will enable the private and public sectors to channel more capital toward climate resilience and sustainable development.

UNEVEN ACCESS

Access to green finance remains uneven across the region, with stark country-by-country disparities in investment—especially in climate resilience and adaptation, which now require far greater attention and funding.

“Access varies considerably,” says Gower. 

Morocco, Egypt, Tunisia, and Jordan secure 86% of approved climate funding because they can access multiple funds, attract co-finance, and meet application requirements, largely due to their past experience and attractive clean energy projects. 

“Fragile and conflict-affected countries, including Iraq, Yemen, and Syria, receive the least support despite facing severe climate risks. Limited institutional capacity, absence of climate data, and unstable security environments restrict their ability to qualify for international financing, exacerbating regional inequality,” adds Gower.

“This is an issue that must be addressed, as many climate solutions and technologies will come from early-stage companies,” says Robinson. 

The region, she adds, is strong in supporting young businesses through accelerators and mentoring, but these firms ultimately need substantial capital to scale and deliver impact—and that is where the real bottleneck lies.

NEED FOR A NEW MODEL

The grand proclamations aimed at cutting emissions did help spark early momentum. However, unlocking the funding needed for real mitigation and adaptation now requires a new model — one built on tangible outcomes, not broad promises: scaling green hydrogen, expanding carbon-removal technologies, and driving substantial private investment into restoring nature.

“Existing climate finance systems are too complex, slow, and capacity-intensive for many MENA countries,” says Gower. “Multi-year approval processes, demanding co-financing requirements, and limited support for adaptation hinder access.”

A more suitable model, she adds, would streamline applications, strengthen region-specific financing channels, and expand innovative mechanisms that better align with the needs of the MENA region. “Such changes would help countries with limited institutional capability to secure timely and effective climate funding. There is a clear logic for a regionally administered and financed fund that could focus on these measures.”

We’ve solved the basics: the capital exists, the expertise exists, and the mechanisms to fast-track emissions-cutting investment are already in hand. 

What is missing, says Robinson, is not a new model of climate finance, but rather a recalibration of our financial markets.“We need markets that properly price in climate risk and recognize the immense costs of building climate resilience. These realities have yet to be fully understood—or worse, are being largely ignored.”

ALIGNING PUBLIC AND PRIVATE EFFORTS

As to how this might work in practice, it involves a more strategic and effective mobilization across the entire value chain, spanning policymakers, industry, development banks, and institutional investors, to develop specific solutions for funding green activities.

Experts say we urgently need the public and private sectors to align — not just in rhetoric but in real coordination — because climate finance only scales when governments set the direction and businesses deploy the capital.

However, Gower says, “Public and private interests align only partially.”

In the MENA region, most climate finance — 81% of GCF support — is allocated to private-sector, low-risk clean-energy projects. But wider priorities, particularly adaptation, draw only a fraction of that investment.

“A refreshed partnership model that mobilizes philanthropic funding, de-risks investment in lower capacity countries, and broadens incentives beyond highly bankable renewables would support more balanced climate outcomes,” adds Gower.

For now, while progress is being made in aligning public and private efforts — particularly around emerging technologies — a deeper structural disconnect persists. Robinson says, “Policymakers often expect private capital to take the lead without appreciating the complexities of investment decision-making, while investors hold back in the absence of clear and consistent policy signals.”

The result, she adds, is a stalemate. “Each side is waiting for the other to move first, and meaningful action stalls in between.”

According to Robinson, real-economy outcomes are modest — the region still underestimates the scale of the transition, and economic diversification is just getting started.

“The most forward-looking companies are already investing in the technologies and solutions that will form the backbone of the future economy. Likewise, some large institutional investors are starting to explore less familiar asset classes and projects–but for now, these efforts are still limited in scale.”

Collaboration is a competitiveness advantage — it strengthens climate resilience and drives economic gains. However, it works only when key players align around concrete, real-world economic goals. The countries that do this well, with clear strategies and solid institutions, are the ones pulling in the most climate finance for renewables.

“Coordinated action between governments, climate funds, investors, and technical bodies can accelerate the scale-up of technologies such as green hydrogen and renewable power, while also increasing private investment in underfunded areas like water security, agriculture, and nature-based solutions,” says Gower.