Beyond Green Finance: How Development Banks Can Turn Finance and Policy Engagement into Systemic Green Change

As multilateral development banks scale up green finance, the central question is shifting from how much green finance they provide to whether that finance changes markets, institutions and investment behaviour. This panel brings together strategic and project-level evidence from two EBRD evaluations to examine what is required to move beyond volume targets towards credible systemic impact.

The evaluation of EBRD’s Green Economy Transition 2.1 Approach shows that a clear green-finance target can powerfully influence investment and institutional behaviour. EBRD exceeded its objective of making more than 50 per cent of annual business volume green by 2025. Yet financing volumes alone could not demonstrate whether investments were producing the intended physical outcomes or systemic change. The evaluation identified a gap between the ambition to transform markets and the metrics, incentives and data used to assess performance. It also highlighted persistent constraints in adaptation finance, including a limited pipeline of bankable private-sector opportunities and the need for clearer strategic direction and stronger incentives.

The evaluation of the Terna Rachoula Wind Farms operation in Greece brings these strategic questions to the transaction level. EBRD financing refinanced operating wind farms and released sponsor equity for further renewable-energy investment. The sponsor subsequently invested substantially more than the equity released, but weak specification and monitoring of the reinvestment commitment limited the evaluation’s ability to establish the financing’s catalytic effect. Separately, but within the same renewable-energy and wind-sector context, sustained engagement with the Greek authorities enabled EBRD to contribute specialist expertise to the country’s offshore-wind regulatory framework, with the technical work closely reflected in legislation enacted in 2022.

Together, the evaluations show that development banks can contribute through both capital and institutional expertise, but credible claims of transformation require a clear results chain. The panel will explore how climate targets can be connected to market-level outcomes; how finance and policy engagement can reinforce one another; how reinvestment commitments intended to generate catalytic effects can be made precise, binding and verifiable; and what these lessons imply for harder-to-finance priorities such as adaptation. The discussion will offer practical lessons for development banks, evaluators, policymakers and climate-finance practitioners seeking to demonstrate not only the scale of green finance, but the change it enables.

Panel objectives

• Explore what it takes to move from scaling up green finance to achieving systemic green impact, including the role of institutional strategies, targets and incentives.

• Use evaluation and project-level evidence to test how catalytic impact happens in practice, and what enables individual investments to generate effects beyond the project itself.

• Examine the role of policy dialogue and the enabling environment in translating investment outcomes into wider market and systemic change.

• Discuss how systemic green impact can be better defined, measured and tracked, including through results frameworks, monitoring systems and outcome indicators.

• Identify practical lessons for strengthening future climate-finance approaches, including how institutions can better address underfinanced areas such as adaptation and nature.