Challenges of parallel funding in climate projects

By being both an investor and a advocate for climate investments, one of the main paradox I struggle with is the Pipeline vs. Financing in Climate Deals one. Let me explain. There’s a growing dichotomy at the heart of climate finance: on one hand, we hear about a lack of bankable pipelines—high-quality, investable climate projects; on the other, we often point to a lack of financing as the main barrier. But what’s really missing—and what needs to happen between the two? 🔍 The Reality Check • A clear pipeline alone doesn’t guarantee capital—it needs standardized project structures, de-risking tools, matched timelines, and trusted verification. It needs offtaking agreements into place! And it also needs a way to navigate through all the mandates and actors that can provide financial resources. Not easy!! • Funding commitments fall short when projects lack financing readiness: technical feasibility, legal clarity, revenue certainty, ESG compliance, and clear impact metrics. COP30 is right around the corner. At SBCOP - Finance Working Group we are committed to bring a clear Action Agenda for Emerging & Developing Economies that could indeed bridge this gap. Some potential alternatives can include: 1. Pipeline Readiness Funds – Cover project preparation: feasibility, financial modeling, ESG review. 2. Risk Mitigation Schemes – Expand use of guarantees, insurance, blended capital to lower entry barriers. And that are adapted to the region reality! 3. Standardization & Market Infrastructure – Globally adopt model contracts, KPIs, certifications (like ICVCM, GCF standards). 4. Capacity Building – Fund local deal architects who can assemble bankable proposals. 5. Innovative Matchmaking Platforms – Use digital tools to connect projects with funders and match risk appetites transparently. 6. Anchor Deals by DFIs – Develop flagship projects that crowd in private finance and establish market precedents. COP30 must go beyond high-level pledges. We need a practical, resourced roadmap—not just more capital, but better-prepared pipelines and incentives that make private-sector commitments real. Emerging and developing economies deserve climate solutions that are not only financed, but truly achievable. Let’s connect the pipeline and the financing—and push for action at COP30. What ideas or models have you seen that close this gap? Let’s discuss! #SBCOP #COP30

One of the most overwhelming parts of building in #climate is constructing a "capital stack". Unlike building in SAAS, in #climatetech you need to fund physical "stuff" and returns on investments take longer-- this means you can't only rely on VCs and need to get creative. Daniel Kriozere put a panel together this week to demystify this, bringing together companies from across the stack: from where we at Streamline Climate sit with grants, to VC funding, to equipment financing with Luc Gerdes and Camber Road, etc.. ( 🧩 See the chart below for how it all fits together ) Having a full capital stack represented on a panel meant we could explore when and why each capital sources was relevant. A lot of climate tech is early and unproven, making traditional funding harder to access and you need to combine multiple. Financing these "first of a kind" #FOAK projects requires a larger risk appetite which fewer lenders have. Some of the key takeaways shared: 1) Match the type of capital to the specific business function. Ex: if you need expensive equipment, consider equipment financing rather than operating off of your balance sheet 2) These capital sources are not competing against eachother, rather they are collaborating. For example, the best time for Venture Debt is right after raising a VC round. 3) This is hard. There is no one-size-fits-all. --- 💚 Shoutout to the 9Zero Climate Innovation Hub for hosting us. They're bringing the sf climate ecosystem together - thanks for all the awesome work done by Matthew Joehnk and Duncan Logan

Alastair Marsh's recent thought-provoking piece in @Bloomberg highlights critical challenges with the current climate tech investing landscape Climate tech projects are capital-intensive with long timelines. Unlike software, much of climate tech requires massive upfront capital for R&D, pilot plants, and manufacturing before significant revenue. This demands longer development and deployment cycles (often 7+ years to scale) that exceed typical 5-7 year VC exit horizons. The classic VC model - built for rapid, asset-light scale-ups - often misaligns with the realities of many climate tech solutions, especially "hard tech." While there’s an abundance of early-stage VC capital for entrepreneurs, later-stage growth that bridges these projects from venture to infrastructure stage is basically absent—that’s called the missing middle. We need to adapt and supplement that approach by layering in other types of capital and bridge the "missing middle." A broader array of financing instruments is essential for climate tech to scale, including patient equity and growth capital, project finance, blended finance, and specialized debt models. Marsh’s piece lays out how family offices are uniquely positioned to be catalyzing players in this space. Their flexibility allows them to deploy capital across diverse segments, filling the gap and driving significant financial returns alongside impact. https://lnkd.in/gUf85Bwy