Extreme weather events – heatwaves, droughts, wildfires, storms, and floods – are accelerating across the world. Even with rapid emission cuts, existing greenhouse gases will continue to drive global warming, intensifying hazards and causing loss of life, damage to homes, businesses, and communities, and supply chain disruption.
World Bank research shows that 1.2 billion people globally are exposed to at least one climate-related hazard and are considered highly vulnerable.[i]
Nature loss compounds and amplifies climate risks – healthy ecosystems act as natural defences – for example, mangroves shield inland communities from costal storms and flooding. The combined impact of climate change and nature loss threatens global economic stability, public health, and social well-being.
These effects will not be felt equally across the globe.
Countries that have contributed least to global warming are expected to face the most significant impacts of climate change – chiefly South Asia, and sub-Saharan Africa.[ii] Limited infrastructure and economic inequality heighten vulnerability, with certain populations – particularly women and girls, people with disabilities, and communities heavily dependent on natural resources – being especially vulnerable.
Where does PIDG fit in?
Beyond the imperative to build global equity, climate vulnerability and inequality pose systemic risks to asset values and portfolio stability, ultimately threatening global financial stability and trade flows.[iii]
Capital must urgently and consistently flow into emerging markets and developing economies. Crucially, these investments should build resilience to climate change while protecting and restoring natural ecosystems.
With climate and nature at the core of our mission here at PIDG, we mobilise and multiply finance into climate-resilient infrastructure where it is most urgently needed, helping communities to reduce their climate vulnerabilities and develop the tools they need to adapt.
The investment opportunity
While precise figures differ, estimates around the adaptation finance needs of developing economies consistently show that by 2030, annual requirements will reach hundreds of billions of dollars. For instance, the CPI estimate an average annual need of USD 222 billion for adaptation between 2024 and 2030.[iv] In contrast, only USD 46 billion in adaptation finance flows were tracked for 2023 – meaning that less than one-fifth of the required funding need is currently being met.[v] Critically, for each year that this financing gap persists, adaptation needs continue to rise.
As global temperatures climb, the demand for adaptation solutions will only grow. Businesses that act early stand to benefit – a Boston Consulting Group (BCG) study found that early adopters of climate action strategies faced costs five times lower than those incurred by delayed action.[vi] Similarly, a World Bank study estimated that, whilst building climate-resilient infrastructure would cost around 3 percent more up front, such efforts deliver net benefits equivalent to a return of four dollars for every dollar invested.[vii]
Given the certainty that global warming will intensify, the large and growing adaptation finance need, the relatively low cost of action compared to the rising cost of inaction, and the multiple co-benefits, there has never been a more compelling time to invest in climate adaptation and resilience.
Developing climate resilient infrastructure
At PIDG, we have a long track record of developing and investing in infrastructure that expands access to essential services, creates jobs, and drives economic growth. We proactively assess all investments for current and future climate-related risks and design interventions to mitigate those risks that could affect the functionality or financial viability of our projects.
For example, when developing hydropower projects, we work closely with project developers to prioritise site selection and technical design choices that maintain power output during extended periods of drought, while also ensuring sufficient river flow to sustain ecological systems. Similarly, when developing and investing in solar projects in Madagascar, we prioritised a design with deeper pole foundations to help mitigate cyclone risk.
The wider financing package for Dakar’s Bus Rapid Transport system included upgrades to drainage systems along bus routes to manage flood risks and build resilience for local businesses. Similarly, for the Kigali Bulk Water project, project design measures included elevating control centres, revegetating riparian buffers to reduce erosion, and using submarine cabling to strengthen resilience against future flooding.
Scaling businesses and backing entrepreneurs
At PIDG, we recognise the financial and development impact opportunity presented by backing businesses and entrepreneurs that bring innovative adaptation and resilience solutions to market.
For example, our investment in SunCulture is helping to scale solar-powered irrigation systems for smallholder farmers, boosting yields, and improving food security, while reducing reliance on fossil fuels. We recently invested in Supamoto, whose clean cooking solutions lower household air pollution and curb deforestation, protecting health and natural ecosystems. Similarly, the PowerGen Renewable Energy Platform delivers off-grid solar systems that increase energy access and resilience in remote areas with limited grid infrastructure. Inspira Farms provides cold chain solutions that help small and medium agribusinesses cut post-harvest losses, strengthen food security, and safeguard their incomes against climate variability.
By supporting early-stage and growth-stage companies, we help communities adapt to climate impacts, strengthen livelihoods, and build a more resilient and inclusive economy. Our approach combines patient capital, technical assistance, and market development to unlock the full potential of adaptation and resilience entrepreneurship.
Mobilising institutional investors
We cannot meet the scale and urgency of the financing need alone. Through targeted guarantees and other blended finance instruments, we unlock private sector investment into infrastructure projects and businesses that build resilience to climate impacts and address systemic adaptation challenges.
Our guarantee for AquaOne supported the issuance of Vietnam’s first-ever verified green project bond in the water sector, and the country’s longest-tenor project bond to date. This investment helps close the gap in climate-resilient infrastructure, diversifies the city’s water supply, and addresses development challenges such as over-abstraction of groundwater, which contributes to drinking water contamination and land subsidence.
Similarly, our partnership with Arya, supported by a guarantee, brought private sector investment into a business that strengthens farmers’ resilience by protecting and enhancing incomes, reducing post-harvest losses, and offering tailored advice on farming practices, helping farmers better adapt to climate change.
Protecting and restoring nature
We recognise that the climate and nature crises are deeply interconnected, and that protection and restoration of nature is fundamental to the future prosperity and climate resilience of our target markets.
We assess the dependency of all our investments on critical nature related services, minimising any anticipated impacts. In 2023 we became an early adopter of the Taskforce on Nature-related Financial Disclosures (TNFD). In June 2025, we published our second integrated climate and nature disclosure which examines nature-related dependencies and impacts across our portfolio.[viii]
Beyond managing our impacts and risks, we aim to embed nature-based solutions into our core infrastructure proposition – building assets that not only meet immediate needs but also help communities and ecosystems adapt and thrive in a changing climate.
What next?
Over the next three years, we have committed to allocating 50–70% of new commitments to investments that qualify as climate finance.*
We will continue to deploy our capital into high-impact projects and businesses that demonstrate how infrastructure can move beyond simply minimising negative impacts to actively contributing to nature conservation, restoration, and regeneration.
The need for action is urgent, and the scale of the challenge is significant. Our collective success depends on our ability to collaborate in pursuit of a shared vision to build resilience in the parts of the world that need it most.
* In 2023 and 2024 this figure was 65% and 64% respectively. The framework used to classify an investment as climate finance can be found in our Climate and Nature Approach.
[ii] Open Knowledge Repository
[iii] UK_Systemic_Resilience_Report_2025[Web].pdf
[iv] Global Landscape of Climate Finance 2025 – CPI
[v] Global Landscape of Climate Finance 2025 – CPI
[vi] Investment Opportunities in the Climate A&R Market | BCG
[vii] https://openknowledge.worldbank.org/entities/publication/89bc5293-7879-40b1-a726-9782aa79c4a2
[viii] PIDG-2024-Sustainability-and-Impact-report-Final-Digital.pdf
